• Monday, June 24, 2024
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Struggling Outdoor Ad industry tasked to redefine business, consent to M & A

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Courage of the operators in the struggling Out- of-Home advertising industry in Nigeria to keep the industry alive in the face of deep challenges confronting the sub-sector has been strengthened by Biodun Shobanjo, the chairman of Troyka Holdings, who motivated them to rethink, redefine the industry, fight their course and create mega firms through mergers and acquisitions.

According to the communication expert, it is only through the critical reassessment of the industry, including raising the entry barrier for operators that the multibillion naira industry can forge ahead, tackle threats and stand the text of time. “An industry whose entry barrier is very low will only struggle to make an impact”, he said.

Shobanjo who spoke at the Organisation of Advertising Agencies of Nigeria, OAAN, 10th poster award in Lagos last Thursday on ‘Indices of a vibrant economy – Outdoor advertising a catalyst for growth’ underscored his message 10 years ago at the same  industry award when he advised them to be firm in their struggle and also innovate or lose the industry.

He specifically told the operators in the industry where 70 percent of revenue is generated in South West including Lagos, to form bigger firms by merging in order to withstand storms. “When an entrepreneur owns two billboards, he or she probably feels that it is good for him or her. Imagine if 10 of such people were to merge. They therefore don’t need 10 CEOs. Some of them can go and do something else while they get their dividend every year”, he advised.

Shobanjo believed that it is due to the plethora of one-man business in the Outdoor industry that sometimes advertisers feel they are doing the agencies favour, when it should be the other way round.

On various challenges confronting the industry, including state government actions which tend to frustrate the industry, Shobanjo tasked them to rise up and fight their course. “I am amazed to see people who cannot fight for their rights regretting that OAAN unfortunately belongs in this category”.

Assessing the threats the industry is faced with, Shobanjo wondered how the operators are staying afloat in the troubled waters saying that for the fact that operational challenges remain the same in Nigeria, no global Outdoor firm worth its name will want to practice in this country.

He said global Outdoor organizations are unfamiliar with powering their sites with generators, putting security both organized and unorganized to watch over generators and diesel at billboard sites.

He listed some of the challenges  posed in the industry to include revenue loss due to multiple  tax by some states, cut throat discount by advertisers, indiscriminate and regulatory taxes and charging by government agencies, charges on unoccupied billboards, delay payment by advertisers and government agents refusal to pay for services. He recalled a case of payment for campaigns made during political campaigns during 2015 elections which is still dragging.

This is why, according to him,  Federation European Publicity Exterior, the international global body representing Outdoor owners and other stakeholders in the  industry had in its May report on Africa and Nigeria specifically, wrote that legislation and indebtedness to the industry are killing the industry.

The marketing communication expert wondered why state governments are heavily depending on Outdoor industry to drive increase in Internally Generated Revenue, IGR stating that when the economy is shrinking one of the casualties is marketing budgets.

Also worried about the threats to the industry, the president of the OAAN, Tunde Adedoyin said primary among them is the emerging unfriendly environment to profitably engage in Outdoor advertising practice in Nigeria, occasioned by the almost suffocating regulations, very high financial demands (outrageous and unjustifiable permit fees), and policies of the signage and advertisement agencies that have now mushroomed across the country.

This has caused draw back on the industry including the effect of cut in marketing budget by clients. “Because we are losing businesses, our employees are at the verge of also losing their jobs and one of the multiplier effect of the emerging scenario is that the already populated unemployment environment will become more  challenged.

Also speaking, Bello Kankarofi, the CEO of Advertising Practitioners Council of Nigeria, APCON representing the Minister of Information, Lai Mohammed said the ministry and APCON are working to address some of the issues facing the industry.

Discussants at the forum including, Charles Odenigbo, a lawyer; Alabi Makanjuola, the former director general of Lagos Signage Advertising Agency; Bunmi Oke, the CEO of 141 Worldwide agreed that mergers in the industry is key.

Odenigbo challenged OAAN not to be afraid to enforce contract agreements.

Daniel Obi