Holiday season advertising is experiencing a slowdown, negatively impacting the sector as businesses tighten their budgets due to economic challenges.

Advertising and business sector players revealed to The PUNCH in separate interviews that while some brands were making efforts to promote seasonal sales, the volume of campaigns pales in comparison to previous years.

The President of the Association of Advertising Agencies of Nigeria, Lanre Adisa, described the current advertising landscape as “understated” compared to the usual festive period vibrancy.

Adisa said, “(Advertising) agencies who work on different clients’ businesses have their plans for the year as expected anyway. And at this time of the year, the last quarter, which happens to be the quarter with the Christmas season and the New Year, they expect will be a bit busier, perhaps the busiest in some instances. So, we are seeing a little bit of that, but it is not comparable to what we have seen in the past.

“I’m sure you also can see that in terms of how the economy is shaping up. Expectedly (there are) a couple of promos, but not as many promos as you’ve probably seen in the past. So, there is that consequence of inflation or stagnation as some people have called it.”

The Noah’s Ark Communications boss attributed the decline to the prevailing economic realities, noting fewer promotional campaigns and reduced seasonal advertisements.

 “We can see that in the marketing communication space by the number of adverts that are speaking to the season; just celebrating the season or just offering things for people to take advantage of in terms of promos and stuff like that.

“So, it is a little bit understated, let me put it that way. It is not as loud, as vibrant as years gone by,” he asserted.

Earlier this year, a report from PricewaterhouseCoopers in collaboration with multiple stakeholders showed that the advertising industry was valued at N605.2bn in 2023 and contributed 0.7 per cent to the Gross Domestic Product during this period.

According to the Chairman of the Multiplier Study Committee, Femi Adelusi, “The study estimates that for every N1 spent on marketing communications in Nigeria, the nation’s GDP increases by a staggering N16.5 – a multiplier effect that highlights the industry’s substantial value contribution.”

However, industry trends shadow the advertising sector’s potential, including the PwC study’s projections its GDP contribution could rise to 1.08 per cent by 2028.

Advertising players are hopeful for a turnaround in the coming year.

Adisa stressed the importance of advertising agencies’ innovation and resilience in navigating the tough economic terrain, stating, “We are growth partners for our clients. We see ourselves in their shoes and we don’t wait for them to even send briefs on some occasions.

“We see opportunities and pursue them on their behalf. We get proactive. And of course, talent is very important. We do our best to inspire our talent and let them be at their best more than anything else.

“Yes, it is a very challenging time as far as the economy is concerned, but also a time that if you channel yourselves and your team very well, can bring out the best in you.”

Meanwhile, small businesses, usually eager to capitalise on the holiday shopping frenzy, also are feeling the pinch.

The President of the Association of Small Business Owners of Nigeria, Dr Femi Egbesola, remarked, “Unlike before, our budget can’t support extensive adverts because many businesses suffered losses or low profitability, thereby, shrinking our finances so heavily.”

He was optimistic that sales might improve as he highlighted a shift in business owners’ priorities to clearing out overstocked warehouses.

“Businesses eagerly look forward to festive periods as they mean more sales and profit,” the ASBON president noted. “This time like others, we in the business space are bracing up with high expectations that sales will naturally improve with the season. We are still very optimistic.

“However, rather than bracing up production capacities and employing more staff, as it was in the past, we are rather praying that our overstocked stores and warehouses can now be emptied.”

The PUNCH reports how small businesses face declining patronage, restocking and expansion challenges, among others.

Egbesola added “This time, most businesses are struggling not for profitability but survival. It is that serious.”

Despite the challenges, some industry leaders maintained that there would be increased sales in the holiday season.

The Director of the National Association of Small and Medium Enterprises, Eke Ubiji, expressed cautious optimism, saying, “There will be sales, no doubt about that, especially for basic needs like food, clothing, and shoes, because Christmas is Christmas. The only thing is at what rate. The percentage people used to do before will be drastically reduced.”

Ubiji affirmed that businesses would spend on advertising but on a more restrained scale, adding, “Companies will always want to advertise their products competitively to convince buyers, but the times are hard.”