Winning in the news marketplace – How media organizations can respond to convergence and the young news-consumer in 2019
According to the Holmes Report, global Strategic Communications and PR industry’s growth rebounded to 7% in 2016, up from 5% growth in 2015, hitting the 15 Billion Dollars in total spend, with the likes of BlueFocus, Webber Shanwick, Golin and Ketchum out performing industry average. While the global industry recorded growth, same could not be said of Nigeria PR firms in 2016. This state of affairs was driven largely by currency volatility, macro-economic shocks and policy issues with big spenders like MTN, Airtel, Glo and Etisalat (now 9Mobile) in the Telecom sector, the Unilevers. the Dangote’s BUA’s, and the P&G’s in the FMCG and the big spenders in the Financial Services sector crawling back with consequent squeeze on the local PR industry in 2016.
The year 2017 opened with a host of foreign multi-nationals downgrading Nigeria and centralising their PR businesses in South Africa and Kenya. This was due largely to prevalence of foreign currency volatility which saw a great gap between official and black market rates and created a tough operating environment for businesses as they were not able to access dollars at the official rate. Under this context, 2017 opened on a bleak note for most PR practices given the impact of macro-economic shock on marketing spend and by implication, the PR share of that spend. However, following Nigeria’s exit from 5 consecutive quarters of negative growth in the 2nd quarter of 2017 with the economy recording a positive but fragile growth of 0.72% (revised from the earlier quoted 0.55% based on improved Oil earnings), we saw a restoration of confidence in the market. This confidence saw a limited rebound in PR activities as foreign and local businesses hoping to cash in on the prospects of a full recovery began to raise their spend, albeit cautiously.
So in terms of the knock-on effect of the recovery on the PR industry, it is still largely marginal given the fact that the non-oil GDP elements are not growing as fast as required for a big effect on marketing spend, at least not yet. The reason why the effect of this recovery are not yet visible are not therefore contestable; I did say earlier that while Oil GDP expanded considerably in the second quarter of 2017, non-oil GDP only grew at 0.45 per cent, down from 0.72 per cent in the preceding quarter and -0.38 in the corresponding period in 2016. In quarter 3 of 2017 GDP grew by 1.4 % showing sustained momentum. However, quarter 3 GDP results also showed that the nation’s economy is still exposed to the risks especially on the real sector side, as only two out of 10 sectors grew during the quarter. While the oil and gas sector grew by 25.89 percent, the non- oil sector from which a larger pool of marketing spend is obtained contracted by 0.76 percent. Under this context, it does not take rocket science to see that the PR industry did not grow last year.