Industry sources say parties to the AISOP legislation are having strategic discussion in the interest of the industry. Daniel Obi reminisces on the issue.
Biodun Shobanjo, the chairman of Troyka Group had on November 25, 2019 at National Advertising Conference in Abuja recommended 60 days payment period for media contracts by clients, perhaps through legislation.
When a man who has practiced advertising for over 50 years makes such recommendation to adopt legislative powers, the industry should listen. He believed the proposal is an option of saving the media business of debt overhang between clients, service providers, media owners and advertising agencies.
The legislative proposal, believed to be a tool to save what appears as master-servant relationship where agencies endure clients for fear of being blacklisted, followed persistent calls by other stakeholders for a regulatory framework that advertising practitioners can collectively key into.
At the forum, Shobanjo also recommended adequate regulation within the industry. His presentation which addressed contemporary issues in the industry called on Advertising Practitioners Council of Nigeria, APCON to play its regulatory functions without fear or favour.
On October 6, 2021, APCON answered these calls with introduction of Advertising Industry Standard of Practice (AISOP) that would guide and regulate the business of advertising in Nigeria. But the industry erupted.
APCON insists that AISOP is a business framework that seeks to improve mutual respect, eradicate unfair advantage, unethical competition, and un-equitable policies between relevant stakeholders in the advertising and marketing communications industry in Nigeria.
AISOP covers engagement policy, payment terms and method, media rates and commission, remuneration model, disengagement protocol, returns on advertising investment and measurements, dispute resolution and other related business protocols.
One of the provisions of the legislation that generated much controversy is the payment terms with reviewers arguing that AISOP should not dictate terms of contract, rather it should allow parties to agree on their terms.
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AISOP stipulates 45 days payment policy which contradicts the former practice where payments were made in 90 to 120 days or more. This pro-longed payment period, sometimes with missing invoices which compels agencies to start all over again of invoicing was really difficult for agencies and media organisations but they could not complain for obvious reasons. They are suffering in silence.
The similarity of the argument over payment terms in AISOP is like querying a police man why is he intervening in a case between a maltreated housemaid and her madam. The madam would prefer “allow us be the way we are”, while the poor and helpless housemaid is dying gradually.
Over time, there has been slavery and oppression where contracts rules are hardly obeyed between clients and agencies. The clients dictate the pace and call the shots.
Today, AISOP has come to alleviate their suffering and grow the industry. APCON maintains that 120 days payment period for contracts will make it difficult for media organisations to survive, including the agencies. “We are saying pay within 45 days or we will bring the Federal might to intervene”, APCON registrar, Olalekan Fadolapo said.
AISOP did not only stop at making payment compulsory at 45 days but ensuring that default attracts interest on the extra days. What this entails is that, once a client defaults, the AISOP makes provision for a certain percentage to be paid as default penalty to the agency or to the consultant. This default fee will enable the agencies to be able to meet up with the default charges to their own lenders too. It is hoped that agencies will report defaulting clients to APCON without fear as in the past of not taking clients to court for contract breach.
As it is established that APCON has the statutory duty to regulate the sector, it is understood that parties are shifting grounds. “All parties are having conversations that will be beneficial to the industry as a whole”, a stakeholder told BusinessDay.
If industry self-regulation was strong and there was enthronement of sanctity of contracts, perhaps AISOP would have been unnecessary. But AISOP became important as legal departments on the clients’ side turn their eyes the other way when their employers do not comply with contract rules.
“If you have a contract to pay your agency in 30 days, make the plan to pay. Let the legal department remind the finance department of the implication of the default on the company’s reputation”, CEO of an agency told BusinessDay.
Backed by APCON, it is time agencies and media industry should mount the rostrum in defence of AISOP without fears.
It is believed that the provisions of AISOP, to some extent will drive the growth of the marketing communications in Nigeria as in other climes including Kenya, South Africa and Western countries where rules are obeyed.
