Influence of Advertisement on Banking Sector Performance in Nigeria

Abstract

The objective of this study is to assess the influence of advertisement on banking sector performance in Nigeria. To achieve this objective, relevant data used spanning from 2010-2021 were sourced from Zenith bank annual report and account for the period under review. The study adopted Descriptive statistics, ADF Unit root, Johansen Co-integration test and Ordinary Least Square (OLS) from E-Views 9.0 as the statistical tool for this study. The variables used were the log of the amount spent on the advertisement (LOGAD) as the independent variable; while Return on asset (ROA) proxy for banking sector performance in Nigeria as the dependent variable. The variables were stationary at their respective levels; The result of Johansen co-integration test confirm the existence of co-integration among the variables. Using the ordinary least square technique, the result shows a positive relationship between advertisement and return on asset which implies that a unit change/increase in the advertisement will lead to an increase in return on asset by 2.346560% which is the financial performance of the banking sector in Nigeria. R² = 0.606602 implies that about 60.66% of the total variation model in the specified was explained by the independent variable; There is a significant relationship between advertisement and return on asset, since the P-value of 0.0028 for LOGAD is less than 0.05 chosen level of significance (0.0028 < 0.05); Durbin-Watson statistic of approximately 1.70 showed the presence of autocorrelation; The F-statistic of the regression output stood at 15.41957, which implied that the regression plane was statistically significant; The study, therefore, concluded that advertisement has a great influence on the performance of banks in Nigeria. The study recommended that banks should embark on aggressive marketing communication strategies especially advertisement to improve/boost their performance, which will lead increase in customers' patronage as well increase in the economic growth of the country.