Upping the ante in outdoor advertising

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WHEN the Advertising Practitioners Council of Nigeria, (APCON) organised a town hall meeting on outdoor advertising in Nigeria last year, the various comments from a good chunk of the participants showed that they were not happy with the regulations in the sector. For many of the practitioners, agencies and clients in the outdoor sector of the advertising industry, who were at the forum, it was probably an opportunity to express the grievances they had bottled up in the past couple of years.

As they took turn to talk, they maintained that the present trend of regulation and control was not sustainable, as it may soon run them out of business and in no long distance, the economy will also suffer. This, to them, is why something should be done urgently because the trend is not something encouraging whether for operators or advertisers.

Setting the tone for the day’s discussion then, the Chairman of APCON, Mr. Lolu Akinwunmi, in justifying the reason for the choice of the topic and the focus on outdoor, succinctly enunciated the position of many of the stakeholders when he said, “Outdoor is a major component of the advertising practice which in recent years has suffered some decline especially as a result of various regimes of regulation at various levels resulting in high costs of operations for the practitioners, making the hoardings too expensive for clients who have gradually been investing their budgets in other media.”

The President, Outdoor Advertising Association of Nigeria (OAAN), Mr. Charles Chijide, in his paper, also re-echoed some of the positions of the Chairman of APCON.

In conveying the position of his association about the state of things at the forum, he said, “Let me confess that I am touched and impressed by the choice of this year’s theme, as nothing would have been more appropriate at this time when outdoor advertising is enmeshed in the quagmire of statutory regulations and controls. It is indeed like swimming in sharks-infested, highly troubled water. There is no contesting the fact that issue of regulations and control is obviously a universal phenomenon as no social organisation or business environment survives in an atmosphere of indiscipline, disorder and anomie.”

Expressing the downturn in business as a result of state regulation, control and monitoring of the outdoor business driven mostly to increase Internally Generated Revenue by most states, Chijide disclosed that over 70 per cent of operators’ hoardings are now vacant while many agencies had reduced their staff strength by over 50 percent.

Besides the local, state and federal governments levies, he said the challenge of street urchins or miscreants had become a great threat and dangerous development to the outdoor advertising practice, “because most times not less than twenty thousand naira are paid to the area boys when his members need to put up something on their hoardings,” he lamented.

Displeasure hallmarked the tone of the speech, gestures and manner of presentations which was re-enforced when one of the state regulators spoke.

Before the era of regulations by state government agencies came on board, there was little or no central supervision on outdoor advertising in Nigeria, whether at the local, state or federal level. However, if there should be any supervision, it should be by local and federal governments.

When LASAA was created by the Lagos State Government, it was to have a central body in the state to regulate and collect levies instead of each local government in the state which has the primary responsibility to do so as well as ensure a better environment friendly outdoor advertising in the state. Immediately, LASAA came on board, virtually all the states in the federation copied the LASAA style. Some have said that what most of the states did was to take the document setting up the Lagos state agency to insert the name of the state agencies where LASAA was in the document for the formation of the state outdoor advertising agencies.

To many, this has created multiple problems for the practitioners as there are other agencies by both the state and federal government collecting one form of tax or levies from the practitioners.

Recently, in a chat, the President of Advertisers Association of Nigeria, (ADVAN), Mr. Kola Oyeyemi, vividly captured the scenario playing out when he said that there is urgent need to review governmental control in the outdoor industry because the present regime of regulation is gradually strangulating the industry.

“There is overbearing regulatory regime, in multiples, and practitioners will be compelled to pass on the cost and when they pass the cost to advertisers, advertisers can absorb but only so much but ultimately they will pass it out. And when they pass it on, who loses, the consumer loses, and all of us are consumers and ultimately we are punishing ourselves.

“I have always said that the time has come for us to sit down around a table, Advertising Practitioners Council of Nigeria (APCON), Outdoor Advertising Agencies of Nigeria (OAAN), government agencies, to say exactly, how to move forward and eliminate the multiple taxation and regulations that are strangulating the industry.

“And when you drive people off outdoor, they go into something else and you kill an entire industry. We can only raise the issue that apart from the fact that we would be affected, the consumers would ultimately be affected because nobody is in business to die. You are in business to make profit but if the regulatory environment is making it impossible to make profit; you find something else to do.

“But what happens to the hundreds of people that are employed in that industry? You throw them into the unemployment market? What happens to the families and organizations that are connected to that industry? We need to look at these, how to ensure sanity without constraining the growth of the industry.”

However, the prediction of the ADVAN President may have come to past with the report of a recent survey released by Mediafacts, an annual publication of MediaReach OMD, which disclosed that Nigeria’s advertising industry’s expenditure on Above-the-Line (ATL) advertising activities dropped by 10.6 per cent to N91.846 billion in 2012 as against N102.755 billion in 2011. This was revealed in its 2012 edition of the publication. The decrease, according to the publication was due to reduced media investment of 43.9 per cent on outdoor advertising and 41.7 per cent on press. It also revealed that while Outdoor expenditure was N17.692 billion in 2012, which is less than N28.142 billion spent in 2011. This implied that the spending dropped with about 37 per cent.

Though most of the state regulators were not present at the forum then, the Senate Committee Chairman on Information, Senator Enyinnanya Abaribe, who chaired the forum, promised to look into the grievances. But one year after, have things changed in the sector in terms of regulation and collection of fees by agencies of state and federal government.

It seems these state agencies are more interested in the regulation because of the revenue as one of the state regulators at the launch of the association of experiential marketers in Lagos said at the programme that they are there to collect the money.

The Managing Director of Lagos State Advertising and Signage Agency, (LASAA), George Noah, in a chat, however denied the claim that there are too many regulations or collection of levies and taxes in the sector. For him, there was nothing like double taxation in the sector as the process in the industry is in line with the best practices around the world.

“If you go to a place or somebody wants to put a billboard in your house, you charge them, the same way that Ministry of Environment will charge you for wanting to use the roundabout because they maintain the roundabout. LASAA will charge you for the advertising that you are doing. So people are doing different functions.”

According to the LASAA boss, if the practitioners put a billboard in a private individual premise, they pay for such space. “But if it is a government’ agency these practitioners take offense if they are asked to pay. Perhaps we should find out in details from them what they mean by this double taxation thing.

“If they use people’ premises, don’t they pay, except they are saying government people should not tax them for coming to use their premises to conduct business. If you put something in federal agencies, you pay them. If you go to Navy or Police, you pay, does this amount to double taxation? My understanding of double taxation is that you pay for something twice. But these are different levies. The charges by LASAA are statutory. When you put a billboard or signage, you have to pay for the advertising and it is a standard practice all over the world and it is same if you want to use somebody’s premises for business, you pay.”

Noah also cleared the air on a regulator competing with the practitioners in the market place saying that all the billboards by LASAA are used by the state government and organisations who partner it on programmes and projects. He claimed that the partners are not charged to use such space to publicise the partnership.

Attempts to get the Registrar of APCON to comment were not successful, he said the questions be sent to his mailbox but did not reply the mail. After he was called two weeks after, he sent a text message saying he was in South Africa.

The President of ADVAN, Mr. Kola Oyeyemi, however noted that one year after, his association is still waiting for that big change adding that if there is any change, things had gone worse

“We are not there yet because the level of transformation we expect is not there yet. We would not be judging until a time when we feel nothing is moving, which would give room for worry. But for now, we are still waiting for that transformational strategy that will show that there has been a major movement from where we were to where we want to be.

“If what has happened in the last couple of months is anything to go by, I think the government intervention in the process is still the same way, if not worse, because we now have more states also developing their own equivalent of LASAA. And the implication is that it gives more room for a lot more regulations and demands from advertisers. We have not seen a shift, we have seen the intension but it has not been transformed into action. We are still waiting.”

Culled from The Guardian