THE INFLUENCE OF ADVERTISING ON NIGERIAS’ GDP AND GVA.
Advertising is an important media constituent of an economy, it is universal and also a powerful tool of competition that helps the economy function smoothly. It provides valuable information about products and services, keeps prices low and facilitates the entry of new products and firms into the market. (Arrow & Stigler 1994). Nigeria is one of the fastest growing economy in Africa.
Advertising is driven by economy, the growth of an economy leads to the increase in advertising budgets. Nigeria is the most populated country in Africa with approximately 189 million people according to the latest United Nations estimates (2016) and a gross domestic product (GDP) of 481 billion US dollars in 2015 (World Bank). Unfortunately advertising is not recognised in the Nigeria GDP but it contributes to the economy greatly through brand equity.
Top products that generates advertisement in Nigeria are: telecommunications, personal paid announcements, beer, entertainment, banking/finance and religion. These categories contribute to the economic growth with telecommunications been the largest advertiser in Nigeria. As the economy grows and the market matures the spending on advertisements will grow.
Nigeria has its own fair share of foreign consumer products and services which gave room for foreign advertising companies to practice in the country. The products advertised often targeted the elites that could afford the products and this also encouraged internet advertising in the country.
In the case of a foreign advertising company wishing to come into the Nigerian market, I for one think the best approach would be the acquisitive growth which includes merging with already existing and established local agencies or purchasing it.