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Nigeria’s advertising
industry is worth over N25bn
By ADEWALE SANYAOLU
Monday, November 30, 2009
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•Abioye
Photo: Sun News Publishing |
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Inspite of the global financial meltdown which has led to a drastic
cut in advertising budgets of most organizations, especially those
operating within the financial services industry, the advertising
industry in Nigeria is still said to be worth over N25 billion.
The figure according to the Managing Director of Rosabel Advertising,
Mr. Tunji Abioye represents the real value of the industry and not
the potentials, which he said, experts have valued to be in the
range of about N50 billion.
Abioye who is our Chief Executive officer of the week, during an
exclusive interview with Daily Sun explained that the current value
of N25 billion of the advertising industry has the capacity of rising
above that level if all loose potentials are well harnessed.
Specifically, he said everyone has somehow underestimated the power
and size of the Nigeria economy, noting that if only the country
could get its power supply problem right, all things concerning
realization of the full potentials of the industry would be fully
achieved.
Besides, he said the opportunities available within the nation’s
economy are actually enough to accommodate all the players in the
advertising and marketing communications support environment, only
if things are properly put in place.
“There are a whole lot of brilliant talents all over Nigeria
who have one great idea or the other that requires some bit of pushing,
selling and pitching in the Nigerian market. But because there are
so many dysfunctional elements in our infrastructure and society,
it is difficult to harness these talents and ventilate their thoughts,”
he said.
Also, the Rosabel boss argued that inspite of all the challenges
plaguing the economy and by extension the advertising industry,
there still exist great opportunities for those who are capable
of combining the power of foresight and fresh thinking, saying such
people will continue to reap the benefits inherent in such concepts.
The advertising expert posited that a lot of the nation’s
economic problems have to do with the broad macro polices of government,
coupled with the stiff environment that such attendant effects has
created, adding that no economy can grow without adequate infrastructure
in place, because the players don’t operate in isolation.
On huge debts advertising agencies owe the media, Abioye was quick
to fault the claims of some media organizations, saying some of
the claims have been largely exaggerated because when most of the
media houses were asked to provide data, evidences and documents
to back up their claims, the figures provided never had a corresponding
link with the initial amount claimed.
According to him, the industry is still to some extent governed
by some understanding of credit regime that is permissible. This,
he said, happens because sometimes jobs executed for clients are
not paid for immediately. And this, to him, accounts for why credit
financing cannot be totally removed from advertising practice.
“What everybody is asking for is a bit of decent credit regime
of ensuring that debts are not allowed lingering on for too long”
he noted
In this regard, Abioye also berated the attitude of some media organizations
that do not send the appropriate evidences of performance in time,
stressing that sometimes three months after a campaign, certification
would yet to be carried out. And even when it is eventually done,
there could be errors or misjudgments.
“Though some agencies too could be a bit reckless because
atimes you discover that a client who has actually paid the agency
for service or campaign and the money used for another purpose other
that that it was meant for. And again, clients sometimes hold back
on payment unnecessarily even when such campaigns would have been
over for close to two years,” he revealed
Abioye graduated with a Bachelor of Arts degree in English (2nd
Class Upper) from Obafemi Awolowo University and also obtained a
Masters Degree in Managerial Psychology from the University of Ibadan.
He is an alumnus of Africa’s best Business Schools (LBS &
WBS).’TJ,’ as he is fondly called by colleagues and
admirers, is a multi-culturally trained and exposed marketing practitioner
and strategist. He has spent close to two decades tendering some
of the best brands in the world.
He is a passionate learner, entrepreneur and scholar. In this interview,
he explores the Nigerian advertising world, its strengths and weakness
and the impact of the global financial crisis on the advertising
industry.
Excerpts
Financial crises and impact on advertising
Well, I guess you mean the current global financial meltdown. And
if you want to localize it, that is the current reforms that is
going on in the Nigeria financial system, especially with the banks.
We have been affected like every other player in the global economy
to the extent that once there is some element of squeeze/financial
incapacity; naturally all the people who play in the economic environment
gets affected one way or the other. And I think that we are playing
a crucial role as far as marketing communication function is concerned
and we in that sector have had our own fair share of the challenges
that the meltdown has created.
But as I say to people always, I think it’s a scenario that
presents great opportunities for those who can learn, restrategize
and reposition in a way to ensure that they even come out of the
crises stronger. And that’s our own position to all these
financial restructuring that is going on around globally.
Largely, a number of clients and players have cut down on their
budgets. And some are delaying activities. So, in a sense, I think
it slows things down broadly. But I think it’s also a learning
period for all of us, especially those of us who play crucial roles
in economic activities, because it will help us to learn to do things
in a more creative sense. Weathering the storm
Well, we have been able to weather the storm by challenging old
paradigms. One of the things we have looked at significantly is
to look at the paradigms that advertising practice has been built
on.
For strings of income; what we have done is to challenge the streams
of our income/revenue base and then evolve new streams. We at Rosabel
have always believed in evolving new strategies.
Cutting down on advertising budget
I think for most institutions and many brands, especially at a time
like this, when making additional income seems to be a sort of challenge,
what some organization do is to try to say, if we can’t make
more money, lets try to cut down on cost, to be sure that we remain
viable as a business.
Though, it may seem to be a strategy that is attractive in the short
term but in the medium or long term, it could be very costly. The
wise brands know that in the middle of crises, you don’t necessarily
focus on cutting cost, budget or pulling back on marketing communications
activities that ordinarily have been set out to support the brand.
The reason why this strategy seems not to be advisable is because
once the crises are over, the organizations who have remained steadfast
to their marketing communications support plan will be the ones
who would have an edge.
I don’t know if it is a wise strategy but I know that many
brands use it as some kind of strategy to keep afloat so that they
don’t get under and get consumed by the crises. But really,
it is a time to redefine your campaign communications and intensify
it, such that when the crises are over, you are still among those
that are still standing firmly footed.
So, ideally, this is the time for organizations to actually reinforce
their marketing communications strategy rather than pull away from
it altogether.
Challenges associated with marketing communications
There are different challenges; some are general while some are
peculiar to us. But let me start with the broad; which is the general
challenge that the industry is facing now. There is a growing need
to discover new talents because we have become an industry that
is prone to poaching.
As soon as you discover some new set of talents, you find people
from banks, FMCG’s and telecoms coming to take away those
bright talents. Today, very many of the marketing functions in the
established telecom firms, FMCG’s and banks are manned by
people who have left advertising agencies. So, there is that huge
challenge of constantly rediscovering new talents.
Again, there is also the issue of power. And this takes us back
to the infrastructural challenges that Nigeria has come to live
with over a period of time.
If I tell you how much we spend on diesel, its awesome. I mean unbelievable.
And in our system, you can’t afford any downturn because we
do a lot of work with IT as a backbone. And as such we need constant
power to be at real service delivery.
There is also the issue about clients seeming encroachment into
areas where ordinarily in the past advertising companies have perfected
some exclusive areas.
These days you find some clients going to talk to media houses and
throwing to them the options of barter arrangement. I also think
that the seeming rapid sense of aggressive competition in the industry
which is good in a sense is also an issue of concern. But I think
some agencies have also learnt to begin to undercut some other agencies.
And this I think, also presents its own challenges. And of course,
some clients feast on it.
So, in a sense those are some of the challenges that I can pick,
which many agencies are currently battling with.
Huge advertising debts owed by agencies
At a recent exercise championed by the advertising practitioners
council of Nigeria (APCON), it was revealed that some of these allegations
are spurious. Based on the outcome of the exercise, it was discovered
that some of these claims have been largely exaggerated.
When many of the media houses were told to provide data, evidences
and documents to buttress all the claims that have been made in
the media about indebtedness to them by agencies, you will be amazed
to discover what the figure were showing.
So, by and large and as other people have said in the past and lately,
a number of those claims have been unduly exaggerated.
To the debt issue proper, the industry in some sense is still governed
by some understanding of credit. I mean credit regime that is permissible.
But sometimes, when you do work for clients, it is not every of
such service that you carry out that is pre-paid for. The reality
is that some of those things are done based on an understanding
that they pay under a particular period of time, say for instance
after 30 days or 40 days. In total, you cannot remove the bit about
credit financing from the advertising practice. What everybody is
asking for is some decent regime of ensuring that debts are not
allowed to linger on for too long.
Sometimes, media houses are also very culpable; they don’t
send the appropriate evidences of performance in time. You do a
campaign and then you are waiting for two to three months before
certification is done. Even when they are done, there could be errors
or misjudgments. Sometimes, you also discover that some agencies
are a bit reckless. A client could pay for a service for a campaign
and the money is used for something else. I also think that some
clients also hold back unnecessarily on payments. There is one or
two clients that we have worked for who for about two years are
still holding back on some of the payments that are due to us for
campaigns that have since ended way back.
So, these are some of the issues that you find in the industry;
one, a bit about the role of the media owners not being able to
provide appropriate data as at when due. Again, there is also the
culpability of agencies by way of a client paying for campaign and
the money diverted to something else.
APCON and regulation of the industry
The Advertising Practitioners Council of Nigeria (APCON) has celebrated
its twentieth anniversary. And some people have asked me that question
concerning my view on APCON. I think the industry has been better
of with the role APCON has played thus far. I mean, without APCON,
it could have been worse. So, that credit of APCON playing the role
of a regulatory body and filling the space must be acknowledged.
But still, it could have been better in terms of policy, guidelines,
and regulations. Those things in a broad sense can be said to have
laid a virile framework.
However, the interesting thing about APCON is that it has not given
too much room to dynamism, freshness, creativity and new thinking
as much as one would have expected in an industry that is governed
primarily by these concepts mentioned earlier.
So, if there is going to be a governor over an industry that is
driven by creativity and innovation not by old energy or thinking,
but by constantly reinventing, then you must be up to the task.
APCON, with due respect as regards what it has been able to achieve
over time, is a government institution. And of course, we all know
that government institutions are not the most vibrant when it comes
to reinvention that you can find around, especially in our own environment.
Rather, the industry is one that derives its energy, power from
relevance in creativity. So, you see some elements of anti-thesis
within APCON and the industry that it is governing. But in order
to bridge this gap, APCON would need to increase its capacity for
self-reinvention. And that’s one area where I think there
is a lot of room for improvement and about every other thing.
Also, how often and constantly do we challenge some of the regulations
that have been in place over a period of time? How often do we challenge
the paradigm that governs vetting of advertising materials before
they are published? How widespread, for example, is APCON? If advertising
is done pan Nigerian, what is the role of APCON for example on the
digital communication level that is evolving. What is its contribution
towards that? What role is it playing and would continue to play?
So, those are all the issues that APCON will need to attend to so
that it is not only there as a governor, but it’s a governor
that is also filled with fresh ideas.
LASAA as regulator, competitor
Yes, Lagos State Signage and Advertisement Agency (LASAA) has been
accused of many things. But, I would like to look at the baby and
the birth water. The truth of the matter is that people have said
variously that the idea of LASAA through some terms competing with
outdoor contractors is not proper. And I think that’s true.
You cannot be a judge in your own cause. It’s only fair that
if you are going to have a regulator, that regulator must be an
unbiased regulator. A regulator that is free from partisan interest.
And I agree with that totally.
However, I think some level of sanity has been brought to bear on
outdoor advertising in Lagos. If you look at the days before LASSA
and the motley of outdoor hoardings that you find around, some of
them almost competing for space within a short radius alongside
the lack of regulation, order and decorum in the way outdoor advertising
has been done. And now, looking at what we have today, inspite of
what those complaints are, there have0 been some elements of progression,
sanity, and order. And I think that is the least anyone could ask
for.
So, I would think that it may seem that there has been some complaints
about why should we have a regulator that is competing with the
players in a sector where the regulator is supposed to be the guardian
of such industry. That may truly seem to be unfair. I think it is
only fair that you have an impartial regulator. And that can only
come if such a regulator does not have self-interest.
Advertising and growth of the economy
My response as to whether or not advertising has contributed to
the growth of the economy would be an emphatic yes. And the way
to validate that is to look some 25 to 40 years back and examine
the number of brands that have been created in that span of time
and value the impact of those brands on people, society, economy
and employment. Only then will you be able to gauge properly what
the impact of advertising has been, I am aware that the success
that a number of the brands in telecoms, banking and FMCG’s
or in any of the major segment of the Nigerian economy and indeed
the global economy has been quite enormous. The advances that some
banks have made can be linked to the power and strength of marketing
communications, chief of which is advertising. Where will great
brands like, TomTom, Bournvita, Glo, MTN, Indomie Noddles and Always
Sanitary Pad be without advertising.
So, brands relevance have really, really been established. And the
contributions of those brands even to the performances of the owners
of the companies that churned them out are awesome. I think it’s
even beyond any doubt that advertising has played its role as far
as the fundamentals of the Nigerian economy are concerned.
When advertising does its job as they say, other people are able
to keep theirs. I don’t have any doubt in my mind that advertising
will continually be relevant to the growth and sustenance of internal
relevance of brands.
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