Setting Nigeria’s outdoor advertising industry free
In spite of the enormous potentials in the Nigeria’s out-of-home advertising industry, the business is going through excruciating times. It was this that jolted stakeholders in the advertising industry to take a critical look at the industry and how to release it from the shackles holding it down, reports Daniel Obi.
The size of the Nigerian economy and its enormous potentials have thrown up conscious efforts by players in various sectors to ensure they tap into the opportunity that has presented itself.
Nigerian economy is the largest in Africa and this is attracting global investors. The out-of-home advertising industry is therefore positioning for, not only shaking off the barriers to survival, but tapping into the opportunity and resolving to accelerate the industry growth.
This buoyed determination brought advertising experts and other communication stakeholders together in Lagos recently, under the auspcises of Lagos State Signage and Advertisement Agency (LASAA), where they took a critical assessment of the industry, especially the outdoor segment of the sector, and charted a growth path for the advertising sub-sector.
Speakers at the conference were unanimous that the potential in the outdoor industry was enormous and the future was bright, but these were being frustrated by various factors. These include lack of data, violation of contractual agreement by clients to out-of-home agencies, regulation and multiple taxations – major factors likely to take some of the media agencies out of operations.
“Perhaps, due to the growing need for economic survival, the relationship between outdoor advertising agencies and their clients has been in decline, especially in the area of the clients keeping with their contractual obligations, especially payments of invoices,’’ the president of Outdoor Advertising Association of Nigeria (OAAN), Charles Chijide, said, in what looked like a stock taking for the industry.
“Consider a situation where an agency has to bear the financial burden of acquiring permit over a location, purchase and install display panel/board, pay levies and taxes… and at the end of it all, the client declines in keeping with the payment plan. To say the least, such is simply bad,” Chijide said in his paper.
Taking a critical look at the industry, Chijide, who is also the president, West African Federation of Out-Of-Home Advertising, said the violation of contractual agreement by the clients had been one of the major reasons many agencies could not keep to regulators’ demand. “Unfortunately, the banks will not honour our hoardings as collateral for loans (because the hoarding permits do not have Certificate of Occupancy – which should have supported such negotiations) and the client won’t agree to pre-payment, leaving the outdoor advertising agency to bear the burden alone.”
The Nigerian experience is one in which clients’ indebtedness rises to millions of naira in any given year, within the last 10 years, he said. It has taken the intervention of the Advertising Practitioners Council of Nigeria (APCON), Outdoor Advertising Association of Nigeria (OAAN) and the individual negotiation of outdoor agencies to get most clients’ indebtedness paid over the years.
On taxation, he said the tax regime(s) lays a heavy burden on businesses, and especially outdoor advertising. It becomes much more worrisome when tax regimes are poorly regulated, resulting in multiple taxation. According to him, many outdoor advertising practitioners have been finding it difficult to break even as a result of inappropriate and multiple-taxation. It is from our little rental that various rates, area boys (Omonile), levies and taxes, are paid to local government, state government agencies, and federal agencies, he said.
Assessing the challenges of electricity on out-of-home business, Chijide said the cost of fuelling generators that power billboard was much. While asking for steady electricity supply, he called on stakeholders and government for necessary support, such as a review of the tax system and issuance of temporary certificates of occupancy for member sites to enable them use it to procure facility from the banks.
In his assessment of the industry, the CEO of LASAA, George Noah, who organised the conference to deepen the industry and prepare it for opportunities, recognised that the industry had a healthy potential, but this was impeded by lack of data, competition by TV and social media marketing.
Noah, who was convinced on the future of the industry, advised the stakeholders to take away the resolutions from the conference capable of transforming the industry. He noted that the coming of LASAA had changed the face of out-of-home advertising in Lagos State, which controls over 60 percent of the industry business.
Convinced on the future of the industry, he said, despite the challenges, the out-of-home advertising accounted for over N50 billion turnover, and Lagos State with a population of about 22 million accounted for 60 percent of Nigeria’s total advertising market.
Breaking down the performance of the industry in figures, Noah said while outdoor media buying agencies generated about N8.6 billion, fabricators make N1.5 billion; installers, N382 billion; large format printers, N8.27 billion. Also, outdoor specialist agencies generate N21.9 billion; outdoor protection services, N370 million; adverts N1.25 billion, while other areas account for N8 billion.
The industry also employs over 100,000 people in Lagos alone. According to him, there are 100,000 signs and 800 outdoor structures in Lagos presently.
Still on the way forward, Akeem Adeniji, director of commerce in the Lagos Ministry of Commerce and Industry, who represented the commissioner, Olusola Oworu, asked outdoor practitioners to key into the Lagos State Development Plan (LSDP), which is in four parts – Economic Development; Infrastructural Development, Social and Security Development, and Sustainable environment.
Stating that the state government has listening ears, he called on all operators who had issues with the state government to make government aware of such gray areas through the right channels
In his speech, Governor Babatunde Fashola of Lagos State, who was represented by commissioner for the environment, Olatunji Bello, challenged the outdoor operators to think outside the box in repositioning the sector and making the out-of-home advertisement sector a vibrant platform. He believes in doing so, the industry needs data to support media buying. He said the issue of electricity could be
mutually resolved if operators look inward and re-apply themselves to resolving the peculiar challenges to their businesses.
Jimi Awosika, managing director of Insight Communications, relating poor outdoor advertisement to an actor with a minor role (waka pass) in the thespian world, said in a world of “democratised noise,” only an advert with a telling presence, creatively conceived and delivered would be remembered in the crowd.
He challenged admen to always thrive to ensure that key factor they bring into the marketing mix was insight into the understanding of motivations that make consumers buy.
“There are no restrictions to thinking and concepts, and so it cannot be one poster fits all. The demand on creativity today is to ensure that ads are engaging. People want to engage; to participate in the story. What creativity requires is for us to have clarity about the message to be delivered and then go ahead to execute it literally so that the consumers can co-create the meaning of the brand from the demonstration of the brand promise that they have seen,” Awosika said.
The conference attracted key industry stakeholders like Advertising Practitioners Council of Nigeria (APCON), Outdoor Advertising Association of Nigeria (OAAN), Association of Advertising Agencies of Nigeria (AAAN), Media Independent Practitioners Association of Nigeria (MIPAN), and the Advertisers Association of Nigeria (ADVAN).
In addition, outdoor regulatory agencies from Ondo, Kano, Ogun, Edo, Cross River and Kwara states took part. Similarly, LASAA’s counterparts from Cameroon and Kenya were in attendance.