Value of advertising industry rises to 605.2 billion Naira, multiplier effect at 1 billion Naira

A new report commissioned by the Advertising Regulatory Council of Nigeria (ARCON) and funded by industry associations highlights the advertising sector’s contribution to the country’s gross domestic product (GDP), revealing its value and multiplier effect.

Presenting the Price Waterhouse Coopers (PwC) report, ARCON Director Dr. Olalekan Fadolapo expressed optimism about the industry’s recent progress, which includes the launch of an audience measurement initiative.

He thanked industry associations including the Experiential Marketers Association of Nigeria (EXMAN), Association of Advertising Agencies of Nigeria (AAAN), Outdoor Advertising Agencies of Nigeria (OAAN), Media Independent Practitioners Association of Nigeria (MIPAN) and Broadcasting Organisation of Nigeria (BON) for funding the study.

Fadolapo stressed the need to quantify the size and impact of the industry as an economic factor, stating: “We cannot continue to estimate the size of the industry. This report lays the foundation for us to be able to evaluate the advertising space and its multiplier effect on the economy every year in the future.”

He added that the report’s findings underscore the industry’s paramount role as a catalyst for consumer demand, business expansion, employment and innovation across all sectors.

As part of the steps ARCON has taken to drive the growth of the industry, he said that apart from measuring viewership and reporting on GDP multiplier effect, the apex regulator will also hold an event on the bold project of redesigning Brand Nigeria, which it has embarked on among other projects as part of the resolutions from the National Advertising Conference communiqué.

Chairman of the National Advertising Conference, Tunji Adeyinka, explained the context behind the study. He explained that the 2022 conference highlighted a gap in understanding the industry’s contribution to GDP, which led to the decision to engage PwC to provide a credible assessment. He further said that the report examined two key aspects: the advertising industry’s direct monetary contribution to GDP and its multiplier effect – the amplified impact of advertising investment on overall economic output.

In his presentation, the Chairman of the Multiplier Study Committee, Dr. Femi Adelusi, highlighted the profound impact of Nigeria’s marketing communications industry on the country’s economic growth.

He said: “The marketing communications sector has become a huge economic engine. The study estimates that for every Naira spent on marketing communications in Nigeria, the country’s GDP increases by a staggering 16.5 Naira – a multiplier effect that underscores the significant value contribution of the industry.”
According to the study, total marketing communications spending reached an impressive 605.2 billion Naira in 2023, growing at a remarkable compound annual growth rate (CAGR) of 18.7% over the past six years from 216 billion Naira in 2018.

This trend is forecast to continue, with spending expected to reach 893 billion Naira by 2028, contributing a significant 1.08% to Nigeria’s GDP (compared to 0.7% in 2023).
Analyzing industry segments, he found that the top three marketing communications spenders between 2018 and 2023 were cable television (25.5%), digital media (18.5%), and creative and content production (13.4%).

Industry leaders present at the event included the President of EXMAN, Mrs. Tolulope Medebem; the Vice President of MIPAN, Mrs. Brenda Nwagwu; the President of AAAN, Mr. Steve Babaeko; Kenny Ogungbe of BON and the President of OAAN, Mr. Sola Akinsiuku, among others.
In her opinion, the results of the study have indeed caused great excitement in the industry as those involved have recognized the immense opportunities that lie ahead.