Nigeria’s Out-of-Home industry groaning under heavy levies – Optimum Exposures CEO

Bayo Adio, managing director of Optimum Exposures who has cut his teeth in Nigeria’s  Out- of- Home advertising industry favours healthy  competition as he wants players to work together to lift  the industry especially in this age of digital. In this interview, Bayo who listed challenges confronting OOH operators, told Daniel Obi that his company that owns one of the largest billboards in Africa located in Ijora will not stop innovating,  ensure it gets to the  market on time, engage  customers, advertisers and partners in order to reach the consumer who is key. Excerpts

How would you describe outdoor advertising business in the first quarter of 2016?

The first quarter was a period of dearth in the industry. Our business is seasonal. First quarter is usually when the advertisers, the clients plan their business. It is a period that the advertisers are gauging the mood of what is happening. If you juxtapose that with what is happening in the Nigerian economy, the quarter was not a very rosy time for the OOH. We are not grumbling because we are looking in to the future of the business. Advertisers were tightfisted, assessing the economy. In addition to that the 2016 budget has not been signed for implementation and that has affected the industry.

If you are not grumbling, then what gives you confidence?

The reason we are here is the reason we are not grumbling. This is because we have projection to grow our share in the market. As we run along in to the year, some of our new product offerings will be coming to space.

Are you therefore saying that innovation is the strategy to navigate through the hard times?

Sure. Innovation and product differentiation are strategies of staying ahead. In addition is the speed to the market which is also very important.

If you compare first quarter of 2016 and 2015, what picture do you see?

First quarter of last year was a period of political campaign. It was a time politicians patronized the OOH medium and then the medium embraced the patronage. There is also another side of that patronage which we are living with now. It is story for another day.

OOH is going through a lot of challenges including double taxation, what are other challenges

These include taxation and multiple levies. In addition to that there are issues with regulation. In Lagos there is stable regulation but in other states, there is strict regulation, pulling down OOH operators’ assets within short notice. Also there is delay in payment for services rendered which is key area of this challenge in our business. Presently, that challenge is being faced head-on by OAAN to broker a meeting between MIPAN, OAAN and ADVAN to manage the situation.

When the industry is tough like this, some players resort to unethical practices, do you see this happening in OOH industry?

It cannot be ruled out from this industry but Optimum Exposures does not involve in such unethical practices. What I can say is that naturally the reaction of average person is that if the regulatory agency is demanding for regulatory fees for exposures that the client has not paid for, invariably  that leads the operator to either discount  payment on some of those platforms in order to break even.

Do you see the challenges pushing out agencies from operation or mergers?

There was a clamour for consolidation of agencies in the past. But with the advent of multinational players coming in to the business from outside, may be agencies would re-consider coming together to have a competitive power. Some foreign agencies are already here with us. In order to give them good competition, we need to perhaps merge.

Apart from innovation and perhaps mergers, what other growth strategies for OOH players

The customer is key in all what we do. We mentioned innovation, differentiation and reaching the market quickly, we need to ensure we engage the consumer on all our platforms. We built platforms that are interactive, connects to the consumer.

Looking at your industry in W/ African market, how do you situate it?

The Nigerian OOH market is evolving. We have come from the plank and plywood to steel and we are now going in to the digital platforms. Looking at OOH spend in Africa from 2013 to 2018 projection, the S/African spend is higher than Nigeria but Nigeria spend is higher than Kenya. For 2014, Nigeria OOH spend was about N20 .5 billion.

With the economic challenges, do you see that figure dipping in 2016?

With the rate of occupancy we have seen on the OOH space, the data is not yet out but there is likely to be a dip in the spend. Currently investment in OOH is high but there is a squeeze in advertising spends. Apart from delay payment, advertisers are cutting spend.

To what extend do you see the emergence of digital advertising threatening OOH and other traditional media?

One of the greatest challenges of OOH now is distracted audience. A distracted audience is the audience that is busy with their mobile phones when they are shuttling in transit. We know that about 50 percent of the population of this country is under 25 and that forms the bulk of students who engage on this platform. A challenge is also put on the OOH practitioner to ensure that mobile phones are connected to OOH platforms, therefore when an individual is transiting, he/she can see nearby OOH platforms through the mobile phones.

Having painted a good picture of the OOH industry, what roles do you think government at various levels can play to keep the industry alive?

Federal and state governments should provide a very good conducive environment for the OOH business. We are a part of the environment and we create ambience in the environment. We equally do some CSR for government agencies and therefore we are appealing that the taxes on us should be reduced because we are groaning under payment of levies.

What do you mean when you say that your Elephant platform in Ijora is going live?

The Elephant at Ijora is being upgraded from a static to a digital platform. It is the smartest board around here and it is not just a board but an intelligent board. It is going live and we encourage leading brands to come on board. We are partnering with a leading manufacturer of LED in the world. When we say live on a digital board, we mean that digital adverts will begin to stream on the platform.

How would that help brands grow?

Some brands are already showing interest as we plan for the live streaming. It is going live from May 12, 2016. We are always raising that bar in the industry and what this gives you is dominance and brands that come on it have edge of connecting with consumers.