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Olalekan Fadolapo: Bringing dynamism to advertising regulation

ARCON to set rejection pitch fee in advertising industry at minimum of N1m

The appointment of Olalekan Fadolapo on September 1, 2020, as Director General of now Advertising Regulation Council of Nigeria, ARCON is what some industry experts described as a round peg in a round hole. He hit the ground running immediately after he resumed office. Daniel Obi assesses his strides so far.

When Olalekan Fadolapo assumed office on September 1, 2020, as Director General of then Advertising Practitioners Council of Nigeria, APCON, it was a critical moment in the life of the marketing communication industry.

The industry faced a lot of issues including media debt, agency-client master relationship, absence of pitch fee, penchant for shooting advertisements abroad with its implications on capital flight and job loss, publication of un-vetted advertisements, especially on social media, unethical competition among players, lack of council for APCON, among other challenges.

Having spent over 25 years as executive secretary of the Association of Advertising Agencies of Nigeria (AAAN), Olalekan Fadolapo understands where the shoe pinches and the challenges in the industry. The job as registrar of APCON, now Advertising Regulation Council of Nigeria, ARCON, of course, was not for the timorous. He succeeded Bello Kankaroffi, another cerebral and shrewd administrator whose tenure expired.

It appears Fadolapo had prepared for the daunting job having read Economics at Ogun State University and later went for his PhD Degree in Marketing with a specialization in Marketing Communications from the Babcock University, Illisan Remo, Ogun State, coupled with his over two-decade industry experience. He is sociable professional, disciplined and humble.

As an insider in the industry, he was a fine choice and he set the ball rolling immediately upon assumption of office as he unveiled his plans for the industry which include regulation with a human face, checking capital flight, creation of jobs, integration and mutual respect among players in the industry.

On October 6, 2021, ARCON introduced the Advertising Industry Standard of Practice (AISOP) to guide and regulate the business of advertising in Nigeria. AISOP stipulated 45 days for payment for the contract executed. After the introduction, the industry erupted especially as players on the client side appear reluctant to the changes.
ADVAN, the industry Santa Claus says this provision to stipulate by fiat the number of days for payment is not acceptable. It clarifies that all ADVAN members do not operate the same business. While some members can pay before 45 days based on their business nature, others cannot meet the requirement. That the 45 days payment provision violates freedom of contract and it is also against the tenets of a free-market economy.

But Fadolapo insisted that AISOP is a business framework that seeks to improve mutual respect and eradicate unfair advantage, unethical competition, and un-equitable policies between relevant stakeholders in the advertising and marketing communications industry in Nigeria.

In coming up with the code, ARCON worked with the Committee on Standard of Practice chaired by Funmi Onabolu, an industry player and former member of the ARCON Governing Council who also worked with sectoral groups including the Heads of Advertising Sectoral Groups (HASG) to make the AISOP a reality.

AISOP covers engagement policy, payment terms and methods, 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.

The 45 days ordinarily contradict the practice in the industry where payments were made in 90 days to 120 days or more. This prolonged payment period, sometimes with missing invoices compels agencies to start all over again of invoicing. It was really difficult for agencies and media organisations but who will bail the agencies from the ‘masters’? But AISOP came as a saviour.
Prior to the setting up of AISOP, the industry players had at the first National Advertising Forum in Abuja in November 2019 agreed to such regulations as AISOP. At the forum, stakeholders like Biodun Shobanjo, the chairman of Troyka had proposed legislation that would mandate 60 days contract payment period to save the industry.

Also, realising that ARCON laws had limited provisions to regulate the industry, Fadolapo who wants to put the regulator on equal terms with the Central Bank of Nigeria, CBN in July 2022 changed the name of APCON to Advertising Regulatory Council of Nigeria, ARCON through a gazette.

This transition, with the aim to further sanitise the industry and allow it to grow and contribute massively to GDP, gave ARCON more powers and broadened its scope.

In Part 1 subsection 2, the Act says “The primary object of this Act is to create and provide a regulatory framework for the Nigerian advertising and marketing communications industry and all matters related to it.

“Ensure that all advertisement exposed and directed at the Nigerian market is legal, decent, honest, truthful, respectful, and mindful of the Nigerian culture, constitutional tenets and relevant lawful enactments, prepared with a high sense of social responsibility, devoid of misinformation or disinformation in advertising and marketing communication.

“Promote and encourage local content whilst entrenching best practices in the advertising industry in Nigeria”

In furtherance to this provision, ARCON under Fadolapo had in October 2022 released a guideline mandating advertisers to use as of January 1, 2023, at least 75 percent of local content in all advertising and marketing communication materials directed at the Nigerian market.

Olalekan Fadolapo, ARCON director-general, said the nation’s advertising industry suffers a loss of over N120 billion annually to the production of advertising, advertisement and marketing communication materials outside the country which leads to job losses locally. He was therefore determined to check this trend. Though it was not clear how he arrived at this figure.

Section 34, subsection 3 states that any person, body corporate, association or organisation that exposes any advertisement that contravenes any provision of this Act commits an offence. Subsection 4 says “Any person or organisation that engages in the practice of advertising and advertising services as a profession without being registered with the Council and so licensed by the council in accordance to the provisions of this Act commits an offence”

Subsection 5 states the penalty as N500,000 or imprisonment for a term of one year or both for an individual while an organisation is N1 m.

Fadolapo’s popular statement at various forums is that “We cannot continue to do the business of advertising the way we have done it in the past’’. The past was bumpy, rough and the operation appeared unregulated with mounting debt and agency-client master relationship. Social media was in their own world as regards exposure of any kind of advert.

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As Director General of the apex regulatory body in the advertising industry, he also bears the responsibility of protecting local expertise from foreign encroachment. The council is making sure that every foreigner that is coming to work in Nigeria’s advertising industry, the foreigners need to get approval from ARCON. “This is the only way we can secure our profession”, according to Fadolapo.

In addition to that, adverts should be shot in Nigeria with local models and failure to this guideline, a fine would be imposed on the agencies. For instance, the use of a foreign model by any agency, according to the law attracts a fine of N500,000.“We also want to ensure that the environment is conducive for everyone to practice the profession. We will provide a healthy business environment and ensure that the practitioners are also protected”, he said recently in an interview. Some industry stakeholders have contested this provision saying it could attract retaliatory responses from other countries which will not benefit Nigerian models.

Part of his efforts in sanitising the industry is the regulation of advertising content on social media. Fadolapo explains that most of the adverts that ARCON rejects find their way to social media. He regretted that “ advertisers of some products that would have drawn the sanctions of ARCON or BON usually circumvent the law using the digital media space to advertise their products”.

He insists that ARCON is not regulating the social media space but advertising content in that space. Recently, ARCON held a sensitisation forum with social media operators to create awareness of the need for advert regulation in social media. Discerning operators agreed to it.

Olalekan is not stopping at elevating the standard of the industry and the practice but the practitioners too. He wonders why in other climes, advertising practitioners are billionaires but not so in Nigeria where the advertising industry’s annual billing is in the region of N200-300 billion.

In collaboration with other agencies, ARCON is putting a stop to advertisements with para-military uniforms such as police, army, NYSC and others. According to him, it is misleading for advertisers to promote adverts with paramilitary as if those forces endorsed the adverts.

Of course, Fadolapo understands that driving the industry to a new destination will require the collective efforts of stakeholders and operators. At the second National Advertising Conference with over 200 participants from the advertising industry and public sector held in Abuja late last year 2022, he said engagement is key in the journey.

In his assessment, Fadolapo agreed that there is a need for stakeholders to sit down and review the practice of advertising. He said before now and after the conference, engagement is the way out. “Engagement is the way out and there is no way we will not sit down at a table”. He however promised that ARCON is not regulating to strangulate the industry.

Fadolapo explained that one of the primary purposes of the conference was to audit the body of knowledge of advertising. “There have been so many unbundling in the skill set of advertising. We need to understand that technology is taking a major part and we need to understand that we are now playing in the digital world. Also, traditional advertising is being challenged, so, both the space, the operation, and the operators are being redefined. So that is why we all need to sit down and interrogate the industry”

The speakers welcomed guidelines as an improvement by the new ‘Sheriff’ and maintained that collaboration with industry stakeholders is key for a workable regulation that will govern and grow the industry as Outdoor operators complain of over-regulation. It is regulated by Federal regulatory agencies, State agencies, and local governments and extorted by touts.

In many instances, Fadolapo is determined and desirous of sanitising the industry for growth. All the routes to this may not be palatable or seem right. But what is needed is engagement, industry and government support to stay on course.