The Nigerian economy is undoubtedly passing through turbulent times. The integrated marketing communication sector is equally experiencing its share of the turbulence. Although many marketing professionals would want to argue that the sector is currently under siege the level of stress among the segments in the sector cannot be the same. Even as marketing professionals continue to lament their situation brought about by the misguided notion among non-professionals that expenditure on marketing is optional and capricious, the wailing in the Out-of-Home (OOH) advertising segment has reached alarming proportions.
From east to west and from south to north, the incidence and preponderance of vacant billboards that greet the eye signpost the state of affairs in the Nigerian economy as advertisers no longer possess the wherewithal to launch OOH advertising campaigns. Obviously, the effect of an unstable economy coupled with the current undulating foreign exchange is telling more on OOH advertising than any other segment in the integrated marketing communication industry.
Investigations showed that virtually all the agencies specialising in OOH advertising in the country are reeling from the effects of so much uncertainty in the nation’s economy, and the decision by brands to stay away from outdoor advertising following cut in their adspend is adding more salt to the injury.
Last year, SBI Media released a report entitled Nigeria’s Marketing & Media In 2016. The report stated that the uncertain hiatus in business and economic direction of the country after the birth of the new APC Party government ravaged the entire marketing communication landscape. Because of its soaring rates and opaque process of systems, major advertisers who had axed their budget saw OOH medium as a scapegoat.
The report also stated that in the face of dwindling revenue, Lagos (the biggest OOH market with 55 per cent of total billing) under a new government became bullish by revising taxes for all OOH hoardings. The report warned the OOH sector to prepare for a tough year ahead.
Now that practitioners are grappling with debilitating consequence of a battered economy, industry watchers say the situation is also being compounded by the latest high handedness of various regulatory agencies in many states across the country due to their perception of the OOH advertising sector as a cash cow.
It is interesting to note OOH advertising had posted impressive adspend over the years until 2014 when it dipped to N20.5 billion from N23.2 billion it achieved in 2013.
Corroborating the Outdoor Advertising Agencies of Nigeria (OAAN)’s figures, MediaReach OMD, a media planning, buying, control and inventory management services company in its 2016 Mediafacts for West and Central Africa stated that N23.2 billion spent on the outdoor advertising in 2013 dropped to N20.5 billion in 2014, and also dropped further in 2015 to N20.1 billion. This shows a reduction in adspend for OOH sector.
Practitioners’ position
Industry players recently acknowledged that OOH advertising in the country is passing through a turbulent period which needs urgent solution. According to them, stakeholders in the industry must come together and chart a new way for the practice of outdoor advertising in the country.
Speaking recently at a press conference organised by OAAN in Lagos, Femi Ogala, publicity secretary of the association said, “the presence of vacant boards in the country is an attestation to the fact that all is not well in the industry.” He said over regulation and double taxation are the two major problems militating against the growth of the business.
Also at the recent OAAN Quarterly Forum held in Lagos, the association took it as a priority to deal promptly with many challenges confronting the sector by keeping members abreast of latest developments.
Although the forum also dealt with other issues including welfare, project, education, research and events, it was the assessment of the association’s relationship with government that attracted concern of all the practitioners in terms of harmful effects of debts and taxes that they were being subjected to, most especially the conflict between operators and regulatory agencies.
The failure to settle the bills of more than 70 outdoor companies contracted to handle President Muhammadu Buhari and Governor Akinwunmi Ambode’s campaign billboards in Lagos by the Lagos State Signage and Advertising Agency (LASAA), a proxy of the All Progressives Congress (APC), also took the discussion to another level. The debt owed outdoor practice was at the instance of Save Our Soul agreement with some operators on behalf of the APC to rally support for its candidates both within the state and at the federal level through the provision of sites for adequate exposure.
However, more than one year after the operators responded positively to the SOS, the APC-led government has yet to pay the agencies, a development that has financially crippled some of the outdoor agencies involved. OAAN has waded into the matter and is now leaning on LASAA to pay debts totalling more than N1 billion owed its members.
Worried about this development, Babatunde Adedoyin, President of OAAN, said the outdoor advertising sector is passing through a critical economic situation. He noted that the present strangulating economic situation in the country has equally left clients with no option but to cut their advertising budgets.
“The economy is in a recession. In a situation like this, there is no way it would not affect our industry. As we speak, about 70 per cent of our billboards are redundant. Clients are cutting budgets. Some are not sure of what they want to do this year and some can’t even access foreign exchange to bring in raw materials. Since they do not have raw materials they can’t produce, and therefore, they can’t advertise.
“For the first quarter of this year, there are no media orders from most companies. Some of them are still trying to put things together because of the uncertainty that we are facing today. That is the basic truth. Some even owe for the last two quarters of last year. I am talking about multinationals,” the OAAN’s boss said.
Typical example of hardship the industry is facing is the recent cancellation of all Glo Out of Home billboards advertising contract amounting to the tune of N78million mainly in the West, East, South-South, Abuja and North-West.
The affected outdoor advertising agencies include, Invent media, New Crystal Media, Optimum Exposure, Executive Options Media, CBs Outdoor, Fulham Nigeria, Capital Media, Adgozo and Mkpoko Ikenga, among others.
Efforts Made
To confront these problems, OOAN is taking drastic measures to insulate member-companies from the current daunting challenges facing them.
One of such effort is OAAN’s concerted attempts to compel LASAA to pay member-agencies whose boards were used to promote the campaigns of President Buhari and Governor Ambode of Lagos State.
Apart from this, OAAN is also fighting battles on different fronts as other regulatory agencies across the country are hell-bent on restructuring OOH advertising in their states. For instance, some state governments have declared that they would sanitise the industry by reducing billboards cluster that have made a mess of many state capitals and other urban areas.
Industry watchers say the exercise will adversely affect member-companies if the state governments are allowed to accomplish their plans. Already, the outdoor regulatory authority in Kaduna State is set to dismantle billboards after giving practitioners some weeks to remove their boards and hoardings.
Also, information emanating from the South East zone is not pleasant as operators are experiencing a turbulent situation in Abia State. According to Churchill Nwagwu, chairman, South-East zone, practitioners are finding things difficult as the state regulatory agency has increased the rate of 48 sheets from N250,000 to N1.2 million.
“In Aba, the local governments are resting on the shoulders of the government to make things very difficult for us to thrive in that city. The association and those operating in Aba have succeeded in filing a protest letter in the office of the commissioner,” he said.
Conclusion
Given the array of challenges confronting the practise of outdoor advertising in the country, practitioners have no choice than to dialogue with state governments and their regulatory agencies. In fact, it is believed that this is the time when OAAN should swing into action and enlighten governments and brands about the efficacy of OOH advertising as well as its contributions to the national economy. Analysts are also of the opinion that the association should, as a matter of fact, educate regulatory agencies across the country on the adverse effect of over-regulation to the growth of the outdoor advertising business in the country.
Abiodun Shobanjo, doyen of advertising in Nigeria and Chairman of Troyka Group recently advised OOH practitioners to also embark on merger and acquisition instead of having small outdoor agencies in a turbulent economy. Shobanjo believes that this will enable OOH agencies to become stronger and be able to stand the test of time.