To survive the new reality of advertising budget cuts by both local
and multinational companies, Nigerian marketing communication firms are
equally cutting their contract agreement charges for their clients.
This new move, according to a source, is to give the agencies that
are desperately looking for businesses opportunity to be attractive to
the budget-friendly clients.
“Though it is tight, but agencies are accepting to manage clients’ advert budgets at low figures”, the source said.
This is not new in Nigeria as report from India showed that big
agencies are also towing the line of “betting big on creating strong
ideas which require less production costs and media spends to grab
eyeballs”.
As business also shifts to below the line marketing, some other
agencies are plotting to launch experiential marketing arm as a way for
survival.
Recently, the CEO of 3TM Ideas, Steve Babaeko, told BusinessDay that
what has happened is that the business landscape has changed a bit
because of the budget cuts.
“Clients have become wiser; the budget has reduced yet they want more
impact. Clients are now asking agencies to do a rethink and it is not
about been able to spend big budget but with the little budget what can
the agencies do for them?”
According to him, agencies that used to do pretty good in the past
because they had big budgets to manage, now find it difficult because
the client is demanding so much with little budget.
“You have to be more strategic and think outside the box. In fact,
these days there are no boxes anywhere.
Agencies that cannot adapt to
the new reality of the day will definitely feel the negative impact of
the new reality”, he said.
Recently, business reported that the first half of 2013 was
challenging for marketing communication agencies in Nigeria due to a
combination of advertising budget cuts by organisations, elongated
payment for jobs executed, insecurity and other mix of infrastructural
difficulties.
Some professionals in the industry, who confirmed to BusinessDay the
difficult first half year, said that feedbacks on operational
performance from a lot of operators within the industry is not
encouraging as advertisers who pay the agencies’ bill embarked on
marketing communication budget cuts due to low sales.
“The economy was a bit slow in terms of giving every marketing
communication industry the kind of leverage it could have had. The year
started with lull of business activity”, Bunmi Oke, the managing
director of 141 Worldwide, who is the president of Association of
Advertising Agencies of Nigeria (AAAN), was quoted to have said.
source: businessday
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