Ask most people what they think drives Nigeria’s economy and they’ll probably say oil. However, while oil still accounts for a large proportion of the country’s international revenues, its actual role in Africa’s largest economy is increasingly small.
In fact, oil now accounts for just over 6% of Nigeria’s GDP, with technology now playing a much bigger role. This shouldn’t come as that much of a surprise, Nigeria has a robust and competitive telecommunications space, and is home to many of the continent’s technology unicorns (start-ups with valuations in excess of US$1 billion).
Technology is however not a single-edged sword, it has other roles to play in the economy as well. Take the country’s booming fintech sector, for example. Of Africa’s seven unicorns, most operate in the fintech space, and five are Nigerian. Those fintech’s have also helped bring businesses online by making payments simpler and more efficient. As a result, as connectivity becomes cheaper and more ubiquitous, technology has intertwined itself with many significant aspects of the economy, including advertising.
In fact, digital advertising, which is today worth $179.20 million, is set to play an increasingly significant role going forward. That’s true not just for the country’s advertising sector, but also for the economy as a whole.
Primed for growth
In order to understand how influential digital advertising will be on the Nigerian economy, it’s important to provide some context surrounding exactly how primed the digital industry is for growth.
At present, there are around 109 million active internet users in Nigeria, that’s already a significant market for online advertisers, but this still only represents 51% of the total population. Thus, that number will only keep growing. In fact, it’s estimated that an additional 35 million Nigerians will come online by 2026. For context, that’s equivalent to the whole of Angola, for example, coming online in just four years. Not to mention, these internet users will also have increasingly high-quality connections. According to data from the Nigerian Communications Commission, the number of Nigerians with access to high-speed broadband internet grew 108.39% between March 2018 and March 2022.
Based purely on the maxim that advertisers need to be where their customers are, this is the kind of growth that simply cannot afford to be ignored.
Narrowing in and expanding beyond borders
When it comes to economic growth, however, it’s important to remember that digital advertising offers advantages that go significantly beyond reach and numbers. More so than any other form of marketing, digital advertising allows businesses to target people with highly personalised messages, catering to their individual needs.
With the right approach, businesses are therefore able to extract maximum value from any ad spend, enabling them to expand and grow, and this is not only the case for domestic growth either. With the right amount of platform related investments, including the likes of Facebook, Twitter, Instagram, Snapchat, TikTok, LinkedIn, and Spotify, Nigerian businesses can propel their products and services to the next level, into new markets, and beyond country borders.
Besides, the ability to bring in external revenue will only serve to further catalyse growth in the economy, and as the world slowly weans itself off oil, these foreign revenues will become more important. Thus, digital advertising will become critical to enabling growth.
Leveraging the necessary skills
Finally, it’s worth mentioning that the digital skills needed for a robust digital advertising market will also have a positive knock-on effect for the Nigerian economy. With initiatives like Aleph’s Digital Ad Expert Academy, more people are learning how to professionally navigate the online space, and therefore the number of people who understand not only the power of platform investments, but also the necessity of it, will increase. It’s an extremely symbiotic and interesting ecosystem that’s developing at a really high pace.
With a growing number of financial options, improved digital access, and available education initiatives people are becoming more digitally savvy than ever before. As a result, when reaching the stage of employment, they already have a strong entrenched appreciation of platform advertising for businesses, thus increasing investments, leading to yet further economic growth, and so the cycle restarts and continues.
Moreover, the professionals equipped with these skills will not only be able to guide domestic businesses through their digital marketing transformations, but also to become significant players on the global digital stage. Some may even go a step further, using these digital marketing skills as a jumping-off point for exploring other digital technologies. From there, they can put themselves in a good position to help foster the next wave of Nigerian digital innovation.
Embracing a digital future
It is therefore undeniable that digital advertising has a significant role to play in the Nigerian economy, both in helping businesses to grow, as well as driving additional expansion and innovation. But, in order for it to have the maximum impact, it’s critical that this process is fully embraced by all, and that businesses partner with industry experts who understand how to help them reach the right audiences, on the right platforms, at the right time.