Media budget will continue to shrink in 2017, Chief Executive Officer of MediaFuse Dentsu Aegis, Emeka Okeke, has said.
Okeke, who was one of the guest speakers at the recently held Advertisers’ Association of Nigeria (ADVAN) Stakeholders Forum in Lagos, insisted that the media budget will continue to decline because there was no money in the system.
“Spend will continue to shrink. I disagree with my friend who said by mid-2017, advertising spend is going to be up. Media spend is going to be restricted because there’s no money in the system,” Okeke said.
A number of agency executives including Feyi Olubodun CEO at Insight Publicis and George Thorpe, Founder of MediaReachOMD, have earlier predicted that the economy would pick up before the end of the year and this would encourage businesses to raise their marketing budgets. Their projection was based on International Monetary Fund (IMF) and World Bank declarations that Nigeria’s economy would bounce back in the third quarter of 2017 with about 1.7 percent growth.
This prediction has been premised on the turnaround in the performance of the non-oil sector. The Federal Government has said that the non-oil sector is performing better than ever before and has become a major contributor to growth in Gross Domestic Product (GDP).
As at June last years, 70 percent of over N500 billion raised for the Federal Accounts Allocation Committee, FAAC, was from the non-oil sector according to the Federal Inland revenue Service. The non-oil revenues are estimated to contribute N2.8 trillion to the 2017 budget.
Nigeria’s economy slipped into recession for the first time in 24 years in the three months to end June when GDP shrank by 2.1%, mainly as a result of fallen global oil prices. And despite government’s optimism that the recession was going to be a short one, the economy has continued to defy all solutions.
And just like in every other sector, the marketing communications industry has been hit hard by major cut in marketing budget leading to loss in revenue and job cuts. But there is now hope of a possible turn around in the third quarter according to global economic watchers.
What is not clear however is whether this projected growth is enough to bring able the needed multiplier effect in the economy and encourage businesses to do more advertising. According to Okeke, that is not a likely scenario.