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24 % of Consumers Ignore Brands Online

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  • 24 % of Consumers Ignore Brands Online

Nigerian consumers are turning their back on branded content as 24 per cent ‘actively ignore’ social posts or adverts from brands, a report by a global research consultancy, Kantar TNS, has revealed.

The report said brands struggle to get people to engage them as many consumers feel bombarded by local brands on social platforms, with 34 per cent of them saying they feel ‘constantly followed’ by online adverts.

In the report, which covered over 70,000 consumers, there is a global scepticism on purchasing brands online, with 57 per cent of respondents from Scandinavian countries (the highest), such as Sweden and Denmark, recorded, adding that they ignore content from brands.

At the other end of the scale, 15 per cent of those in Saudi Arabia and 19 per cent of Brazilians avoid branded content.

China and South Africa sit closer to the global average with 24 per cent and 26 per cent of respondents expressing cynicism.

Meanwhile, the popularity of Instagram and Snapchat has soared in the last two years globally as people seek out real, personal and ‘in-the-moment’ content.

Accordingly, about one out of five, representing 16 percent of Nigerian internet-users, are on Snapchat, an increase from 12 percent two years ago.

Instagram has also seen a surge in popularity, with local use jumping to 41 per cent, up from 16 percent in 2014.

Kantar TNS Global Director, Michael Nicholas, said: “The rise of Instagram and Snapchat taps into people’s desire for instant, entertaining content from friends, peers and influencers, often enhanced by fun filters and editing.

“There is a real opportunity for brands to tap into this trend by creating “personalisable” and shareable content, such as videos and stories. The challenge is how to focus the right content to the right people, on the right platforms and at the right moments.

“Some brands are getting it spot on; in the past year, we’ve seen the likes of Disney, Starbucks and McDonald’s use Snapchat’s filters to engage consumers in a way that doesn’t feel intrusive.This is key to overcoming many people’s fundamental negative perceptions of brand activity online.”

However, the study found that influencers and celebrities hold the key to swaying people’s views of brands, especially the younger generation of Nigerians.

Accordingly, two out of five (43 per cent) of 16 to 24 year olds said in the survey that they trusted what people say online about brands more than ‘official’ sources, such as newspapers, brands’ own websites or TV adverts.

While young people are the biggest social media users across all platforms, the rise of the ‘Instagram’ is also gaining momentum.

The report stated that 34 per cent of Nigerian internet users age between 55 and 65 use Instagram, a 35 per cent jump since this time last year.

The appeal of in-the-moment photo-sharing is also growing in this group with 17 percent of those aged 55 – 65 on Snapchat, up from nine percent last year.

The firm stated in the study that the rise in users of all ages spells opportunity for brands that can create engaging and shareable content.

However, with 29 percent of Nigerians objecting to the idea of their online behaviour being tracked by adverts, they need to tread carefully.

“Younger people are more influencer-oriented than ever before, trusting bloggers and peers rather than information from brands. The older generation’s ‘influencer network’is still primarily friends and family, but considering this group’s adoption of other trends, we may very soon see them going online for inspiration and information,” said Nicholas.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Crude Oil

Oil Prices Decline on Rising India COVID-19 Cases, U.S Inflation Concerns

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Global oil prices extended a decline on Friday following a 3 percent drop on Thursday as coronavirus cases rose in India, one of the world’s largest oil consumers.

Brent crude oil, against which Nigerian oil is priced, declined by 35 cents or 0.5 percent to $66.70 a barrel at 5 am Nigerian time on Tuesday while the U.S West Texas Intermediate (WTI) fell by 28 cents or 0.4 percent to $63.54 per barrel.

The commodity super cycle rally just hit a hard stop and the energy market doesn’t know what to make of Wall Street’s fixation over inflation and the slow flattening of the curve in India,” said Edward Moya, senior market analyst at OANDA.

The crude demand story is still upbeat for the second half of the year and that should prevent any significant dips in oil prices,” he added.

Prices dropped over a series of key economic data that stoke inflation concerns and forced experts to start thinking the Federal Reserve could raise interest rates to curb the surge in inflation.

An increase in interest rates typically boosts the U.S. dollar, which in turn pressures oil prices because it makes crude oil more expensive for holders of other currencies.

This coupled with the fact that India, the world’s third-largest oil consumer, recorded more than 4,000 COVID-19 deaths for a second straight day on Thursday, dragged on the oil outlook in the near term.

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Brent Crude Rises to $69 on IEA Report

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Oil prices rose after the release of the International Energy Agency’s (IEA)  closely-watched Oil Market Report, with WTI Crude trading at above $66 a barrel and Brent Crude surpassing the $69 per barrel mark.

Prices jumped even though the agency revised down its full-year 2021 oil demand growth forecast by 270,000 barrels per day (bpd) from last month’s assessment, expecting now demand to rise by 5.4 million bpd. The downward revision was due to weaker consumption in Europe and North America in the first quarter and expectations of 630,000 bpd lower demand in the second quarter due to India’s COVID crisis.

The excess oil inventories of the past year have been all but depleted, and a strong demand rebound in the second half this year could lead to even steeper stock draws, the IEA said yesterday, keeping an upbeat forecast of global oil demand despite the weaker-than-expected first half of 2021.

However, the upbeat outlook for the second half of the year remains unchanged, as vaccination campaigns expand and the pandemic largely comes under control, the IEA said.

Moreover, the global oil glut that was hanging over the market for more than a year is now gone, the agency said.

“After nearly a year of robust supply restraint from OPEC+, bloated world oil inventories that built up during last year’s COVID-19 demand shock have returned to more normal levels,” the IEA said in its report.

In March, industry stocks in the developed economies fell by 25 million barrels to 2.951 billion barrels, reducing the overhang versus the five-year average to only 1.7 million barrels, and stocks continued to fall in April.

“Draws had been almost inevitable as easing mobility restrictions in the United States and Europe, robust industrial activity and coronavirus vaccinations set the stage for a steady rebound in fuel demand while OPEC+ pumped far below the call on its crude,” the IEA said.

The market looks oversupplied in May, but stock draws are set to resume as early as June and accelerate later this year. Under the current OPEC+ policy, oil supply will not catch up fast enough, with a jump in demand expected in the second half, according to the IEA. As vaccination rates rise and mobility restrictions ease, global oil demand is set to soar from 93.1 million bpd in the first quarter of 2021 to 99.6 million bpd by the end of the year.

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OPEC Expects Increase In Global Oil Demand Raises Members’ Forecast on Crude Supply

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The Organisation of Petroleum Exporting Countries (OPEC) yesterday lifted its forecast on its members’ crude this year by over 200,000 bpd and now expects demand for its own crude to average 27.65mn bpd in 2021.

This is almost 5.2mn bpd higher than last year and around 2.7mn b/d higher than an earlier estimate of the group’s April production.

According to the highlights of the organisation’s latest Monthly Oil Market Report (MOMR), OPEC crude is projected to rise from 26.48 million bpd in the second quarter to 28.7 million bpd in the third and 29.54 million bpd in the fourth quarter of the year.

The report also indicated a fall in Nigeria’s crude production from 1.477 bpd in February to 1.473, a difference of just about 4,000 bpd before rising again in April to 1.548 million bpd, to add 75,000 bpd last month.

OPEC stated that its upward revision of members’ crude was underpinned by a downgrade in the group’s forecast for non-OPEC supply, which it now expects to grow by 700,000 bpd to 63.6mn b/d against last month’s report’s projection of a 930,000 bpd rise to 63.83mn bpd.

The oil cartel projected that US crude output would drop by 280,000 bpd this year, compared with its previous forecast for a 70,000 bpd decline.

On the demand side, OPEC kept its overall forecast unchanged from last month’s MOMR, stressing that it expects global oil demand to grow by 5.95 million bpd to 96.46 million bpd this year, partly reversing last year’s 9.48mn bpd drop.

Spot crude prices fell in April for the first time in six months, with North Sea Dated and WTI easing month-on-month by 1.7 percent and 1 percent, respectively.

On the global economic projections, the cartel said stimulus measures in the US and accelerating recovery in Asian economies might continue supporting the global economic growth forecast for 2021, now revised up by 0.1 percent to reach 5.5 percent year-on-year.

This comes after a 3.5 percent year-on-year contraction estimated for the global economy in 2020.

However, global economic growth for 2021 remains clouded by uncertainties including, but not limited to the spread of COVID-19 variants and the speed of the global vaccine rollout, OPEC stated.

“World oil demand is assumed to have dropped by 9.5 mb/d in 2020, unchanged from last month’s assessment, now estimated to have reached 90.5 mb/d for the year. For 2021, world oil demand is expected to increase by 6.0 mb/d, unchanged from last month’s estimate, to average 96.5 mb/d,” it said.

The report listed the main drivers for supply growth in 2021 to be Canada, Brazil, China, and Norway, while US liquid supply is expected to decline by 0.1 mb/d year-on-year.

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