ARCON Reforms: Dissecting Fadolapo’s Blitzkriegs Reshaping Nigeria’s Advertising Industry

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Dr Olalekan Fadolapo, DG, ARCON

The Advertising Regulatory Council of Nigeria (ARCON), the apex body regulating advertising in the country has been on full accelerations to deepen Nigeria’s advertising in the last few years. 

The present leadership of ARCON led by Dr. Olalekan Fadolapo has been introducing different reforms and initiatives poised to raise the bar of regulation and profile of the country in the League of Nations practicing advertising in line with global best practices.

Fadolapo had assured practitioners during the last National Advertising Conference held in December last year that the industry would be redefined in 2024. His words: “Though we have started enjoying some of the benefits of the reform, it will be total from next year”

Recently, while addressing journalists at a press conference in Lagos, the agency rolled out a broad framework articulating the government’s urgent priorities and action plans to reposition the advertising industry. The new regulatory framework aims to strengthen regulation, build capacity, ensure financial stability, create a stronger industry, create more employment opportunities, and promote the use of local talent and resources within the sector.

The framework is also “In line with Federal Government policy of economic recovery, inclusive growth, development of local talents, and the directive of the Hon. Minister of Information and National Orientation, Alhaji Mohammed Idris on the need to strengthen the Nigerian Advertising Industry regulatory framework and reverse the negative trajectories currently plaguing the industry.”

Dr. Fadolapo, at the press briefing held at Protea Hotels, Lagos on February 6, 2024, called for the support of all stakeholders in the agency’s efforts to sanitize the Nigerian advertising industry and create a better ecosystem.

 He also outlined the elements within the new regulatory framework that would guide advertising practice.

Insurance Cover

There is now a mandatory N1 billion professional indemnity insurance that sectoral groups like AAAN, EXMAN, MIPAN, and OAAN must provide for their agencies 

According to Fadolapo, “As part of the ongoing advertising industry reform and the need to strengthen advertising agencies service delivery, build capacity as well ensure long-term stability in the industry, each sectoral group, is to provide N1B (One Billion Naira) professional industry insurance cover for its members. This covers professional indemnity for members of their association as part of the corporate license requirements.”

He added that this is part of corporate licensing requirements is coming into effect on April 1, 2024.

 Working Capital Threshold

ARCON is also reviewing minimum capital and working capital thresholds for agencies in consultation with industry stakeholders. 

Dr Fadolapo explains: “There is an urgent need to review the capital structure and working capital requirement of the advertisement agencies in line with economic realities and capacity building programs of ARCON. ARCON is currently in talks with the Heads of Advertising Sectoral Groups (HASG) and other relevant stakeholders on the minimum capital requirement for registration and license as an advertisement agency. Regulatory guidelines will be issued as soon as a position is taken on this”.

Payment Terms

On the critical issue of payment terms, the DG revealed that ARCON is collaborating with the EFCC, NBC, and others to enforce a maximum 45-day payment cycle for ad services. “Any organisation that offers payment threshold outside 45 credit policy will be tagged an economic saboteur of the Nigeria advertising industry. Such an organisation will be flagged and reported to other government agencies for further investigation and necessary punitive actions,” Fadolapo warned.

Explaining further, Fadolapo said. “Globally, the payment threshold is a policy in the advertising industry. Some stakeholders have been offering Nigerian media and other service providers a 120-day payment circle, thereby impoverishing the Nigerian advertising industry. These same stakeholders prepay foreign media houses operating in Nigeria for media services. Some had insisted on old practices that have led to industry debt and exploitation of media owners. We can no longer allow this to continue.”

 Foreign Models And Voices

ARCON is still insisting on restricting the use of foreign talent models and voices in adverts targeting Nigerians.

The ARCON chief emphasized that Nigerian advertising should primarily utilize local professionals. “ARCON will continue to insist that Nigerians should be considered as primary in all advertisements targeted at the Nigerian market.

“Use of foreign models and voices are banned except where it is inevitable. In this case, the application for variation should be formally addressed to the Director General with a detailed explanation of the rationale for the use of the foreign talent. Approval is not automatic. If you are selling your product to Nigerians, use Nigerians in your advertisement,” he said.

Comprehensive Data Bank

ARCON is also conducting a nationwide audit of advertising agencies to build a comprehensive data bank. Fadolapo announced that only licensed agencies will be allowed to engage in business, and a directory will be published after the audit for the utilization of the local and global business community.

Media Rates Deregulation

Media rates deregulation is yet another reform that should put smiles on the faces of the Nigerian media.. Across the country at present, media rates are now fully deregulated, with no regulation allowed. He explained that Nigerian media houses are to be accorded the same business respect as foreign entities.

Engagement And Disengagement As Stated In AISOP

Another revolutionary reform is the engagement and disengagement procedures outlined in the Advertising Industry Standard of Practice (AISOP). The DG of ARCON explains further  “All stakeholders are requested to adhere to the engagement and disengagement procedure as stated in the Advertising Industry Standard of Practice (AISOP). ARCON has commenced full implementation of the AISOP framework. Where an agency is disengaged without proper reconciliation of financial matters before engaging another agency on the same account, and ARCON is petitioned. The new agency and engaging organization will be investigated, and where they are found culpable, they will be adequately sanctioned.”

Register Of Advertising Professionals

ARCON revealed that it will also soon publish a register of approved advertising practitioners after completing a membership review. “ARCON has been battling with issues of exposure of unapproved advertisement, illegal advertising practices, and damaging actions of unregistered persons claiming to be advertising practitioners among other challenges. Sequel to the above, ARCON will publish its membership register as soon as the ongoing membership review exercise is concluded. A notice has been issued in this regard by the Registration Directorate of ARCON.”

It emphasised that it is committed to stopping the act of going out of the country to produce advertisements meant for the Nigerian market.

“ARCON will continue to insist on the production of advertisements in Nigeria, stop the capital flight and development of other economies by some Nigerian organisations’ attitude of going out of the country to produce advertisements meant for our market. All commercials to be exposed to Nigerians should be produced in Nigeria. We need to create jobs for the Nigerian youths, help grow and develop the support service sector of the industry, and circulate funds within the Nigerian advertising ecosystem. Where advertisements are produced outside Nigeria, such advertisements will be heavily taxed. Consequently, the variation rate will be reviewed upwards shortly.”

National Workshop On OOH 

ARCON said it is collaborating with stakeholders in the out-of-home advertising industry to organise a national workshop on the OOH advertising business that will help reposition the sector.

Fadolapo explains: “A Committee chaired by the Director General of ARCON has been set up to plan and organise a national workshop on OOH advertising business. ARCON is collaborating with States’ Signage Agencies and OAAN on the need to formulate a broad base OOH Advertising regulatory framework for the industry. We will seek input from all relevant stakeholders and ensure industry participation in the framework. A Committee has been set up to work on this.”

Online Vetting Fees

Last year, the agency released vetting rates for digital media with a timeline of 7 days as N7,500, an 8-hour vetting process (1 day) for 15 concepts costs N100,000 while 16 working hours (2 days) for 10 concepts costs N70,000 to regulate advertising on digital platforms to eradicate unacceptable and unethical practices capable of undermining the morality and integrity of the profession.

The Director-General of ARCON, Dr. Olalekan Fadolapo, said that sanctioning influencers putting out advertisements of any kind on social media, as well as other digital platforms without pre-exposure approvals from the regulatory body is necessary to discourage non-compliance with the law.

He noted that most of the advertisements exposed by this group are not only unethical with unverified claims and misinformation but also in violation of the Nigerian Code of Advertising Practice. 

Committee Brand Nigeria

ARCON also unveiled a Brand Nigeria Committee led by the President of the Association of Advertising Agencies of Nigeria (AAAN), Steve Babaeko. According to Fadolapo, “The Brand Nigeria Committee is the initiative of the industry to take a look at Nigeria as a brand and come up with a campaign. As an industry, this is part of our activities for the 2023 National Advertising Conference to build our dear Nigeria and build communication for it.” It seems this committee is yet to take off as most persons who sent in suggestions and contributions are yet to be acknowledged.

Contribution Of Advertising To The GDP

ARCON has equally set up a committee with the responsibility of determining the size of the Nigeria Advertising Industry and its contributions to the GDP. The committee, according to Fadolapo is chaired by Femi Adelusi, President of the Media Independent Practitioners Association of Nigeria (MIPAN), and will work closely with other representatives from sectors of the industry.

The committee will also determine the contribution of the Nigerian Advertising Industry to all areas of the economy and the multiplier effect of the contribution of the Nigerian Advertising Industry to the Nation’s GDP, using a qualitative approach in line with the best global practices.

One thing stands out from the body language of the Advertising Regulatory Council of Nigeria (ARCON) and its leaders. There is no going back on the current blitz that is churning out revolutionary reforms for the advertising industry, and the agency is not ready to succumb to any blackmail, intimidation, or propaganda from any stakeholder aimed at distracting it from its noble duties.

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