A researcher, Akinbowale Sileola Adebusola, has urged the Securities and Exchange Commission Central Bank of Nigeria (CBN) and Nigerian Exchange (NGX) to strengthen regulation of digital marketing and social media activities in Nigeria’s capital market to protect investors and promote transparency.
Adebusola, who conducted a doctoral investigation at Babcock University,said the rapid growth of social media marketing, influencer campaigns and digital investor relations was reshaping how listed companies communicate with investors and the public, creating regulatory challenges that existing disclosure frameworks may not adequately address.
The researcher based the study on a census of 392 senior management executives across 22 listed service entities, recording a 98.5 per cent response rate. The study instrument recorded Cronbach alpha values ranging from 0.87 to 0.95, indicating high internal consistency.
According to the findings, social media marketing and investor relations jointly accounted for 71.7 per cent of the variance in value creation, with an adjusted R² of 0.717, while the explanatory power rose to 74.7 per cent after controlling for firm size.
Adebusola said the findings demonstrated that digital communication was no longer merely a promotional tool but had become an important factor in corporate value creation and investor perception.
The researcher, however, warned that the growing influence of digital marketing could create opportunities for undisclosed promotional activities, digital hype and potentially misleading communication if appropriate regulatory safeguards were not introduced.
Adebusola called for the SEC and NGX to mandate listed companies to provide quarterly disclosures of their social media advertising expenditure, including platforms used, attribution metrics and fees paid to digital agencies.
The researcher also urged the SEC to introduce an influencer marketing code requiring individuals who discuss listed securities or companies on social media to disclose relevant financial or commercial relationships.
Adebusola also called on the CBN to establish binding digital communication guidelines for deposit money banks, payment service providers and listed financial institutions, particularly to guard against the dissemination of unverified claims.
The researcher also recommended that the Financial Reporting Council of Nigeria (FRCN) strengthen corporate governance requirements by giving board audit and risk committees greater oversight of companies’ digital communication strategies.
Adebusola said the regulatory measures were necessary amid growing social media influence on investment decisions and corporate reputation.
The study identified influencer activity as having a positive and significant effect on market capitalisation, with a beta coefficient of 0.314.
The researcher argued that the regulatory framework should evolve alongside digital communication technologies, noting that existing provisions under the Companies and Allied Matters Act (CAMA) 2020 and relevant SEC rules largely focus on conventional corporate disclosures and may not sufficiently address emerging practices such as influencer contracts, automated advertising expenditure and algorithm-driven sentiment campaigns.
Adebusola cited regulatory developments in other jurisdictions, including the United States Securities and Exchange Commission’s integration of social media into its Regulation Fair Disclosure framework and European regulatory efforts addressing digital platforms and market abuse.
The researcher said Nigeria’s capital market needed to anticipate the risks associated with the growing intersection between digital marketing, investor relations and investment decisions.
Adebusola urged regulators to balance innovation with investor protection, stressing that stronger disclosure requirements would improve transparency and enable investors to distinguish between genuine corporate communication, paid promotion and potentially manipulative digital campaigns.
The researcher said coordinated action by the SEC, CBN, NGX and other relevant regulators would be critical to ensuring that Nigeria’s rapidly evolving digital financial ecosystem remained credible and investor-friendly.
