A Brief Note to ADVAN on Advertising Industry Reforms

Oludele Okanlawon

A little less than two years ago and just when the advertising industry was getting its hopes up that a new dawn was about to break, there began a spirited attempt to drag it back to the dire place it has always been. It is a place no advertising professional wanted, as it was a contributor to the high advertising agency mortality rate.

To cut to the chase, the attempt to drag advertising back to the dark place was authored by the Advertisers Association of Nigeria (ADVAN), which had reacted badly to the release of the Advertising Industry Standard of Practice (AISOP) by the Advertising Practitioners Council of Nigeria (APCON) which, last year became Advertising Regulatory Council of Nigeria (ARCON).

ADVAN’s reaction to the industry regulator-formulated AISOP was and remains as desperate as that of man trying to fend of late-night pickpockets. Its pique was that AISOP, as formulated, contains provisions aimed at taking ADVAN’s knee off agencies’ throat and make them breathe well, something they have been unable to do for decades.

AISOP, as a framework, spells, clearly, the way and manner of agency engagement/disengagement, terms and modes of payment, media rates and commission, audience measurement and dispute resolution among other issues. A condensation of what it seeks to do, by common consent, is ground-levelling. AISOP seeks to reform the industry in a way that agencies are no longer treated by clients as something close to vassals.

With something approaching a nuclear gust of disapproval, ADVAN has been railing against the AISOP provision stipulating a 45-day payment period to agencies to agencies for jobs executed. The provision repealed the payment period of 90- 120 days, in the best case, ADVAN had become accustomed to. The protracted payment period AISOP aims to abolish affected not only the business of the agencies, but also those of their suppliers, including media organizations, which are regularly garroted by agencies’ indebtedness to them.

In addition, AISOP prescribes a payment of a percentage to agencies as a penalty in the event the payment window is overshot. This was envisaged to help agencies accommodate the default charges of their lenders. The potential loss of unfair privileges it has enjoyed via payment to agencies as its whims dictated is something ADVAN is unwilling to countenance. AISOP, it is important to point out, was not sneaked in on ADVAN, as it had a representative on the committee that brought it to life. It was similarly represented on the Nigerian Advertising Code Review Committee, National Advertising and the Conference Committee as well as on the Advertising Standards Panel (ASP).

 What its reaction indicates, uncomplicatedly, is that it was enjoying-to the max-seeing agencies reduced to the status of mendicants, so as to continue exploiting them.

ADVAN’s view is that contractual agreements between its members and agencies should not involve a third party and proceeded to accuse the regulator of undue interference. This position, to put it mildly, is the equivalent of willful ignorance because there is no advertising environment globally without a regulator or one in which clients pay agencies for campaigns executed whenever the feeling seizes them. What this says is that there are minimum irreducible standards prescribed in every advertising environment to ensure the protection of all.

“In saner climes” is a fixture in conversations these days.  I take it that ADVAN desires to operate in a saner clime, which would mean it should be happy with the same standards in such environments or similar ones. A few examples will show that clients elsewhere have not been frothing with anger over regulators’ prescription of payment periods. The US has a 35-day payment window. China has a 30-day window. Germany, France and other European markets stipulate a 30-day period. Kenya, South Africa and other African countries have 45-day payment periods, the same as proposed by AISOP.

With those saner climes insisting on certain standards, ADVAN’s proposal of the retention of indeterminable payment period is no path to a saner environment.

The surest route to a saner environment is law and order, things the ARCON Act of 2022 was made for, as it relates to the advertising industry. But it was, like AISOP, met with rejection by ADVAN. The ARCON Act effectively abolished the APCON Act, granting ARCON full regulatory powers over the country’s advertising environment. The act, among other things, mandates ARCON to promote local content and entrench international best practices.

Its provisions, from all indications, have further incensed ADVAN which, earlier this year, came out with an intention to challenge the legality of the ARCON Act. ADVAN intends, as the notice stated, to join in the suit the Attorney-General of the Federation, Senate and House of Representatives, Minister of Information and Culture as well as the Industry, Trade and Investment Minister.

Particularly irritating to ADVAN is the section in the ARCON Act stipulating the mode of agency disengagement. The section, arising from ARCON’s policy on engagement and disengagement, states that an advertiser terminating a contractual agreement with an agency must carry out financial reconciliation at the point of disengagement and fulfil all outstanding contractual obligations prior to signing on a new agency. This noble policy is, however, being interpreted as interference. It would have been funny if it did not carry a whiff of a desire to treat agencies shabbily. What ADVAN wants is to continue having the freedom to chase away agencies like a flea-ridden dog.

Another source of irritation is ARCON’s policy

 proscribing the use of foreign voice-over artists as well as models in advertisements for the Nigerian market.  A section of the  ARCON Act gives muscle to the policy, which aims to grant Nigerians benefits of advertising in the country. ARCON’s local content policy prescribes minimum local content ratio in all advertisements, thereby encouraging advertisers to use Nigerians in their marketing communications campaigns. It envisages that it will stop the financial haemorrhage by Nigerian companies, conservatively estimated at N120 billion annually, as well as loss of jobs.

What is not to like about this, given that it has the potential to halt loss of jobs and reduce pressure on the local currency?

 Somehow, ADVAN found reasons to be angry about it, as its notice of litigation advertised its intention to challenge the legality of the ARCON Act and the competence of the National Assembly to make the law which, to a large extent, carries the potential to address many of the problems that have blighted the advertising environment for as long as anyone can recall. ADVAN’s intended legal challenge is mystifying, given that it made written and oral submissions at the public hearings conducted by the National Assembly before the law was made. You have to wonder what it thought it was doing if it did not think the federal legislature is competent to make a law regulating advertising.

Okanlawon writes from Lagos