Out Of Home Business And Battle For Survival | Independent Newspapers Limited
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Out Of Home Business And Battle For Survival

Posted: Jul 6, 2016 at 2:55 pm   /   by   /   comments (1)



Out of Home is currently going through some challenges, which if not carefully managed could signal its death in the nearest future, Olamide Bakare reports.

 Perhaps if the Outdoor advertising agencies of Nigeria, OAAN, had knew that the business session organized as part of the programmes to celebrate this year Poster award, an event to applaud creativity and innovation in the out of home business, would be a moment for sober reflection, it is most likely that  members including the planning committee would have consider seeking another alternative particularly in the choice of Biodun Shobanjo as guest speaker. Indeed it was a moment for deep reflection and thorough diagnosis of the state of the out of home industry as the advertising czar made some frank submissions on issues affecting the industry at large. At the event held in Lagos recently, which was witnessed by practitioners including past and president of OAAN, AAAN and LASAA from both the advertising and out of home divide, Shobanjo hinted that though  out of home have come a long way, the industry was still struggling with many issues, which he said had held it down for so many years. Shobanjo, though a fringe player, took members on a memory lane on what has changed between now and 2006 when he spoke to the same gathering as he stressed that there was no disputing any fact that the industry needs urgent reawakening.

In his opening remarks, The President of the association, Mr. Tunde Adedoyin, while commending practitioners, both within its own constituency, and other sectoral groups said the reality of what is happening in marketing communication industry vis a vis the revolution of technology is a clear sign that indeed the business of outdoor has come to stay.

While admitting the fact that the business had gone through many metamorphosis in its life cycle, Shobanjo on its part opined that it was unfortunate that the outdoor business had not continue in the pace and manner  in which it was growing some years ago due to some protracted challenges.

The guest speaker, who spoke on the theme: ‘The Indices of a Vibrant Economy: Outdoor Advertising as a Catalyst’ at the decade anniversary of the award, highlighted that it was strange that the industry which used to contribute immensely to ad spend in Nigeria was fast losing its grip on the market. For the most part of the session, one issue however took centre stage over others. In fact, more than anything else, the issue of the regulator dominated the discourse as stakeholders made their position known on the activities of regulators alike. Although Shobanjo saluted the courage of the Lagos state government for initiating a regulatory authority at a time when the environment was confronted with utter disorder and insanity which were brought about as a result of indiscriminate citing of billboards and other outdoor materials in the metropolis, he said the activity of the regulatory authority, LASAA in recent time had remained a cause for concern.

Shobanjo, however, condemned the proliferations of agencies saying that it was obvious that entry into the industry deserved a second look as it increasingly becoming clear that the entry barrier into practice is quite low. Among other issues, the advertising czar said the plunge at which billings for the industry had taken in the last six years  is something every practitioner should worry about. Warning governments in various states against taking draconian decisions that may harm the industry, Shobanjo said beside the indiscriminate act of the regulator which had constituted a serious harm,   members owe a duty to work together in building a virile and respectable profession. He said a situation where the profession is being derided on daily basis need to be guided against as each one needs to do his best to improve on its image. Commenting on the financial burden being created by the regulator, Shobanjo said that the association has a lot of responsibility on its shoulders to ensure that a dialogue is established between it and the regulator with a view to finding ways to determine how much it arrived at in calculation of site.

He said: “Before anyone can regulate a profession or an industry, that regulator needs to understand how the industry works. Right now, the regulator is killing the industry. The discussion shouldn’t be about how much you pay. It’s about how LASAA arrives at the charges they place on practitioners. I know this should be the responsibility of the local government but LASAA has taken it over. I remember 10 years ago, the state government said ‘the local government mandated us to do this on their behalf.’

LASAA needs to educate the stakeholders on the determinants of the charges. They impose taxes that they can’t justify. LASAA needs to understand the cost input of putting a site in place. It needs to consider the cost of getting the job done for the client before charging stakeholders.”

Making his contribution on the discourse, the registrar of the Advertisers Practitioners Council of Nigeria, (APCON), Alhaji Bello Knakarofi, said rather than demanding that rates be cut by the regulator, practitioners should be more concerned about the needed infrastructure and enabling environment that would help defray whatever cost that may likely go into operations of the business. To him, there was nothing wrong if government imposes charges on outdoor business provided it is not way beyond what it can afford.

He said, “Discussion shouldn’t be about the rates, we should talk about other facilities. The regulator should address the issue of water, roads, and beautification. Why should agencies pay for some of these things? It is our constitutional right as a citizen to have access to these basic facilities.

Lending her voice, The former president of Association of advertising agencies of Nigeria, AAAN, Mrs. Bunmi Oke, said what remains key for not only outdoor but the entire gamut of marketing communication is the need to collaborate in delivery value and meeting the need of clients. Oke who held a different position on the activities of regulator said it lacks any basis for government to benchmark its billings on what operates in the international market considering the fact that economy and purchasing power differ.

Oke said, “Convergence is important. Collaboration is important too. We need to sit down and re-invent ourselves because things are changing everywhere. On the issue of the regulators, Makanjuola talked about the rates but said regulation is not about money. If you want to regulate, let’s look at the environment. We are not operating in an international environment, so, don’t put an international bill on a locally developed environment.”

A representative of Managing director of Lagos state Advertising and Signage Agency, LASAA, who identified himself as Dickson, said it was erroneous for practitioners to assume that our efforts are targeted at killing the industry, emphasizing that no one, not even government, has any intention to kill the business but rather to create a win-win situation that would benefit practitioners while also generating revenue for the environmental development of the state. Asked to comment on how it arrived at its rate, Dickson said the agency do apply charges on the basis of per square meter. He, however, used the opportunity to implore practitioners to consider focusing on local areas as against saturated areas like Victoria Island.

He said: “As for how we arrive at the rates, we charge per square meter. Agencies should look into local areas on the mainland, and not the saturated island. We use our boards for CSR without charging. We also pay ‘area boys’ for our locations.”

“As for collaboration, we had a meeting with the chairman of OAAN this week where we formed a committee comprising lASAA and OAAN members on the way forward. We understand the economy crunch and that is why we are coming together to sort it out. I assure you that though digital technology adverts are there, but outdoor will not die.”

A lawyer for the association, Mr. Emeka Odenigbo, who added his voice, noted that the Lagos based regulatory agency was fast becoming a monster which need to be tamed before it gets out of hand. Odenigbo, who believes that the preponderance of agencies has not helped matter growth wise argued that time had come for agencies to bury their ego by coming together in order to form a formidable player that can compete globally.

He said: “LASAA has become a hydra-headed monster in this country and we need to take them to court and fight up to the Supreme Court level. LASAA has given birth to terrible children across different states in the country.”

“Merger is key in this industry. Most of the things killing Out of Home industry emanates from the law. LASAA is doing what the local government should be doing under the fourth schedule, item 1 paragraph 1 of the constitution. We need to involve the attorney general of the federation on this issue.”

“Regulators like to promise their state governments of the ability to generate huge amount of revenues and the only industry you attack with bogus fees, are the Out of home. You demolish billboards that clients have paid for and you don’t compensate the people. You charge for vacant sites. And you tell me the government is doing something right, I think that is called ‘executive recklessness’. We need to fight LASAA to the Supreme Court to get the final judgment. This is a legal issue. We are dealing with several issues around the law.”

Pioneer managing director of LASAA, Mr. Makanjuola  Alabi, said no one can discountenanced the immense role the regulator had played in creating sanity and worth for the business. He reminded participants that the essence of having such agency was to put a check on and regulate the activities of professionals, saying that what is operational in Nigeria also hold sway in developed markets.

Perhaps as a way of showing support for the regulator even when he has pending questions to answer on the management of the agency during his tenure, Makanjuola however recommended the need to cut down on practitioners as against cutting down the rates or fees being charged.

He said: “I believe with LASAA, the Out of Home today has better value for their boards than it were. Let’s have in mind that regulation is key in any country and that’s what keeps the sanity in such professions. What has helped Outdoor today is that the entry level is not such that anyone can just apply and erect a board. It is because a regulatory agency is in place, that’s why there’s sanity in Lagos. Instead of saying cut-down the rates, I would rather say cut-down the number of practitioners in the OH industry.”

“The local and state governments signed an agreement to manage the regulation of OH on their behalf. I can categorically tell you that local government gets 65% revenue of advertising generated by LASAA within their area.”

“LASAA has been able to support in putting in place street lights, over-head directional signs which you wouldn’t find anywhere in the country. In Africa, apart from SA and Egypt, no other country has the kind of directional signs Lagos has.”

Beyond the issue of regulation which was spotlighted at the award ceremony, Shobanjo enunciated on the lopsidedness that abound in the industry as well as the excruciating effect which a shrinking economy like ours has on marketing communication business. According to him, each time there is a shrinking economy, one major casualty that suffers the most is the market support operation, a component of which is advertising. He said further that for an economy that is not vibrant, it would be hard to have a vibrant advertising terrain. To this end, this explains why many outdoor sites are vacant. Commenting on the lopsided nature of the industry, he said it was strange that Lagos accounts for 54% of revenue spend in outdoor while South West, South South and South East take a paltry 15%, 14% and 17% respectively, an indication that outdoor were mainly concentrated in the South. Bemoaning the regulator further, he pointed out that if report by the acclaimed global outdoor agency was anything to go by, the chance of survival of outdoor business in Nigeria is bleak. According to a report by FEPE which was issued and released in May, regulation is killing the industry. Shobanjo who drew the attention of players to the role of technology in modern times, said it was necessary for practitioners to sieze the moment by deploying initiatives to engage their audience through smartphones and other gadgets. Urging practitioners to up their game in the face of threat from foreign intrusion, Shobanjo said time has come for players to build a good and less expensive outdoor agencies that can compete globally. Suggesting ways out of the many challenges confronting it, Shobanjo listed them to include redefining itself by way of raising its entry barrier and merger, increasing level of sophistication and creativity in line with global standard, paying urgent attention to client brief as well as encouraging apprenticeship in the business

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