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ARCON, ADVAN differences: Need for industry intervention

Stakeholders to discuss responsible advertising at ASP forum

Nigeria’s marketing communication industry and the stakeholders should not find it convenient to be quiet over the current disagreement between Advertising Regulatory Council of Nigeria (ARCON) and Advertising Association of Nigeria (ADVAN).

While ARCON is the regulatory body of Nigeria’s advertising industry, ADVAN is the golden goose. ADVAN says that it is not comfortable with certain provisions of the laws of Advertising Regulatory Council of Nigeria, ARCON.

One of the areas of disagreement between the two bodies was the stipulation of a period of 45 days for contract payment between clients and their contractors as provided in the Advertising Industry Standard of Practice (AISOP) of ARCON code.

On October 6, 2021, ARCON had introduced AISOP to guide and regulate the business of advertising in Nigeria in line with its functions. 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.

We recognise that a regulator should spell out rules and guidelines in a way that creates growth for businesses and not limiting them. Yet, there is need for collaboration with operators on workable regulations that will grow the industry

The basis for stipulating maximum of 45 days contract payment period in the industry against the former practice of unconventional and unilateral 90 to 120 days was for the health of the marketing communication industry.

But ADVAN, the industry Santa Claus that pays the bills says this provision to stipulate by fiat a number of days for payment of contract is not acceptable. It clarifies that all ADVAN members do not operate the same business. While some members can pay within the 45 days based on their business nature, others may not meet the requirement. Osamede Uwubanmwen, President of the ADVAN says that what ADVAN can adhere to is the legal contract between their members and vendors.

Uwubanmwen insists that the 45 days payment provision violates international standard of freedom of contract and it is also against the tenets of a free-market economy. “That is why we are saying no” as it is meant to stifle businesses.

Contrary to ADVAN’s position, ARCON has said the Council must be involved in advertising contracts between advertisers and other stakeholders. The body clarified that its role is to establish minimum acceptable industry standards for advertising, advertisements, and marketing communications. According to it, these standards serve only as a framework to guide transactions involving stakeholders. The council emphasized that regulatory agencies in various industries establish standards to ensure fair practices and ARCON is not exception.

It also insists that AISOP is a business framework that seeks to improve mutual respect, eradicate unfair advantage and unethical competition. The Council alleges that some operators that engaged in oppressive policies with impunity over the years are uncomfortable with the new fair-trade practice framework.

They want to continue taking the industry for granted through exploitative policies, fleecing other stakeholders, something they cannot do in other countries. Why will they comply with payment policies in other markets and decline the same in Nigeria? It queried. The council argues that these operators resist the fair-trade practice framework because it prevents them from taking advantage of the industry through exploitative policies.

The ARCON law also bans foreign models from featuring on advertisement directed at Nigerian market. The ban means advertisers cannot use foreign models in a Nigerian advert. ADVAN is also averse to this provision, saying that this law will be counter-productive on the basis that if other countries reciprocate, it will affect Nigerian models. Other countries will also likely ban Nigerian music, models and Nigerian movies.

It is believed in some quarters that this over-protection is not necessary and should not be made as a law as Nigerians have already attuned with their models, music and movies. “When last did you hear foreign music in Nigerian adverts” Uwubanmwen said.

But ARCON, headed by Olalekan Fadolapo, insists that this policy requires a minimum local content percentage in all advertisements, encouraging organizations to use Nigerians as a critical element in their advertisements.

There is also the nagging issue of whether ADVAN was carried along in the laws process. While the body insists that it was not involved, ARCON insists that the process involved input from all stakeholders and the public. The Council emphasized that a public hearing took place where ADVAN representatives were present and made both oral and written submissions. ADVAN is demanding to know its representations in the process.

Based on its worries about certain provisions of the new laws, ADVAN is threatening legal action against ARCON. These it says are draconian, conflicting with other body’s laws, run against the Constitution and therefore not in the interest of the association, business or Nigeria. In fact, it is challenging 50 sections of the law that it wants invalidated for smooth business operation.

Read also: ARCON provides reasons for digital adverts regulation

However, while accusing some ADVAN members of resisting changes that would improve the Nigerian economy and allow Nigerians to benefit from advertising, the Council condemned the notion that certain sections of the ARCON law are draconian and asserts that these members cannot hold the industry hostage.

Though, the industry is facing a lot of issues including media debt, agency-client master relationship, absence of pitch fee, penchant for shooting advertisement abroad with its implications on capital flight and job loss, publication of un-vetted advertisements especially on social media, unethical competition among players, among other issues, we believe that these concerns should be tackled through engagement.

We recognise that a regulator should spell out rules and guidelines in a way that creates growth for businesses and not limiting them. Yet, there is need for collaboration with operators on workable regulations that will grow the industry. At present, the industry and seasoned stakeholders cannot fold their arms while ARCON and ADVAN drag themselves and confront each other over resolvable issues. There is need for intervention and it is now.