Panic is sleeping across the Nigerian integrated marketing communication (imc) industry since the announcement of second recession in five years in Nigeria. Both clients and agencies have begun to restrategize in order to battle the long tough marketing environment occasioned by the worst recession in Nigeria history in 33 years. .
In economics, a recession is a business cycle contraction when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending.
This, imc experts believed that in a recession, consumption recedes, purchasing power dwindles and company incomes shrinks and marketing budget shrinks.
Speaking on the impact of recession on imc activities, the Group managing Director of Insights Redefini, Dr. Ken Onyeali Ikpe, said “Recession impacts all businesses and no sector will be spared. Good nemesis is that it is going to be the second wave in 3 years.”
Therefore, he said, “Companies that are well run will know how to trigger the control measures that should normally protect and future-proof their businesses. Tighter governance, stricter cost management and control and balancing resource cost to yield ratios and expansion of production and revenue lines are required at this time.”
Mrs. Elo Iyayi, Chief Executive Officer of AdTraders Media believed that when there’s an economic downturn; clients tend to cut back on their advertising and communications budget, in spite of the fact that this has adverse effects on their brands in the long run.
“The IMC in Nigeria suffers its fair share of these budget cuts, which has led to a downward review of salaries and working conditions” Iyayi said.
The Managing Director of Nitro 121, Mr. Lampe Omoyele, who believed that IMC Businesses would need to review their business models if they will see post recession said that agencies should cut down expenditure; diversify; seek to own revenue-generating platforms.
Though Omoyele had believed that imc activities had experienced slowdown during the COVID-119 pandemic said, “The recession will elongate the slowdown in IMC activities and spend experienced as a result of Covid-19 pandemic.
On what imc businesses should do during recession, Onyeali Ikpe said managing imc is not different from other kinds of businesses. The principles are basically the same.
He advised agencies to move away from being communication partners to business partners. “There is need to move away from being communication partners to business partners, meaning that their configuration of talent and resource must change to quickly move from the downstream of advertising to the upstream of solution.”
Agencies will need to deal with the issues and challenges around product quality, service delivery and agility.
In a recession, consumption recedes, purchasing power dwindles and company incomes shrinks. So, the marketing budget shrinks and it impact is usually on the imc budget. Therefore, if you are not going to be part of the solutioning, then you will be dispensed with.
According to Mrs. Iyayi,” the first thing to do is to keep a lean but very fit organization. This will help cope with cuts in client spending. The next thing will be to ensure you deliver real value, in an economic downturn; no one wants to gamble with their hard-earned money. As such, there will be pressure on us to deliver more for less.”
Speaking on the possible period imc industry may experience surge again, then AdTraders Media CEO believed that the industry may pick up in Quarter 2 in 2021.
“I am optimistic that there will be a recovery in the coming year. Activities should pick up in Q2 2021,” she said.
Meanwhile, Dr. Ikpe said marketing activities never ceases so, it is continuous but only for those who have unique and adaptable propositions to sell. “Only the generic producer of service suffers and will think of another cycle of reasonable productive season.
“I will suggest that Agencies continue to charge and discharge strategies for survival projecting that the recession will not go away in a foreseeable future,” he advised.
Marketing activities will continue during recession, even if spend might reduce. Brands need to keep engaging with consumers to drive revenue and market share. “My advice to brands is not to stop marketing activities but reframe to be more cost-effective,” Omoyele stated.