Mr. Gbenga Olagunju, is Managing Director of Endless Possibilities Media Consulting in Lagos. In this interview with Kayode Fasua, he laments the poor business climate in Nigeria, especially as it affects media advertisers and image managers
Kindly appraise the performance of newspapers in Nigeria, in terms of copy sales and advertisement?
In Nigeria, the media industry is going through hell. Even before the economic meltdown, sales, for media products, had been dwindling progressively. The combined effect of the bad economic situation and poor reading habit among the populace is made worse by poor advert sales.
The catalyst for the woes can be viewed from the number of multinational companies that have closed shop owing to poor infrastructure, leading to high production costs and dwindling patronage.
Companies like Dunlop, Michelin and a host of other organisations, are responsible for the bulk of advertisement placement in newspapers and magazines. The effect of poor sales and revenue has impacted negatively in the running of media organisations. The few newspapers remaining have more or less resolved to circulate only in state capitals and some major cities, thereby limiting the reach of those newspapers. As a result, most media organisations are struggling to survive and in the main, unable to pay their employees as and when due.
At a time like this, media products are the least in the list of consumers’ scale of preference. This, when viewed against optimum print-run, can be seen in staggering number of unsold copies stacked in different sales’ offices around the country.
So, what are the ways forward?
In the media parlance, it is said that bad news is good business. Newspapers and magazines were performing above average during the military regimes. This is because readers found in the military, a common enemy that must be harassed to give way for democratic aspirations of Nigerians. Media managers identified themselves with the people’s aspiration and sales soared. During this period, copy sales of media products were enough to provide the needed resources to run their business successfully. However, with the advent of democracy, there appears to be some semblance of peace and contentment. Sales nosedived while advertisement sales also dropped considerably. In addition, debt by sales agents, including advertisers and agencies, started mounting. Due to poor sales, agents’ commission was no longer enough and hence they began to spend sales proceeds. As a result, they are not eager to fulfil their obligations to media houses. Threats of stoppage of supplies means little to them since they always collect copies from their fellow agents for sales. To compound the problem, copies are still reluctantly delivered to these agents because they are the people on ground to expose the newspapers for sales. Debtor advert agencies are also reluctantly accommodated and in fact, sometimes give adverts to newspapers as fillers (Adverts that are used to fill up spaces free for want of a paid advert). This way, most media organisations are in a dilemma, sort of.
To remain afloat, media managers must have business savvy, determining appropriate print run, beefing up their editorial content, firming up sales processes and engaging educated and resourceful sales personnel. In the media setting, attention is focused on editorial, while sales and other support services departments are left with poorly trained personnel. This must change. As said earlier, media organisations should also be mindful of their editorial content, ensuring they maintain editorial integrity. If they continue to be upright while trying to weather the storm, over time, they will be accepted by the market as is the case with some organisations. Like the saying goes, “You cannot kill the beetle (Volkswagen Car). Newspapers (Hard copies) will always be relevant with their ability to attract immediate attention and attract advertisement meant for mass audience.
In order to survive, some media outfits have, of late come up with different types of awards to organisations and individuals to augment their income. This is a double-edge sword. The practices have affected some media outfits and have affected their credibility ratings. Some have also instituted periodic talk shows; conferences, etc., to shore up their income and remain relevant.
Lagos advertisers are saying the state’s signage and advertisement agency is running them out of business, having added real advertising to its supervisory role. What’s your take on this?
LASAA is an arm of the Lagos State Government, saddled with the responsibility of supervising the practice of advert. I think the agency, as a self-accounting parastatal of government, is under pressure to generate revenue and meet some sale target. The way they go about doing their job, to me, is aggressive. I think they are going too far, over and above their statutory mandate. However, I do not think they are capable of running the private sector practitioners out of business, simply because, LASAA do not possess the wherewithal to outstage the professionals in the business of advertising.
How will you describe the effects of online advertising in Nigeria?
Online advertising, no doubt, has impacted negatively on newspaper advert sales. It is quick, convenient and accessible. These attributes makes it useful as a driving force for online platform. Even though online advert has its own drawback, it has eroded patronage for hardcopy advert sales.
What are the challenges facing the advertising industry in modern time?
The major challenge facing the advert industry in modern time is that of poor and dwindling patronage. The bulk of advert patronage, usually, is expected from multinationals and corporate organisations with huge and sizable budgets for promoting their products and services. Most of these organisations are moribund and have collapsed with many of them giving way to multinational religious organisations. Even though Government are the biggest spenders, patronage, in the form of public notices and sometimes special features, are small and far between. The conditions under which business can thrive are not conducive. Thus most of the companies have relocated to a more conducive environment so they can continue to remain as a going concern.
What do you think the federal government should do to boost indigenous enterprises and save dying companies from the effects of economic recession?
To boost indigenous enterprises, the Federal Government should provide necessary infrastructure, i.e. good and accessible roads, electricity, cheap fund that can aid commerce and attract aspiring entrepreneurs.
The Federal Government should also enact or adjust existing laws that will adequately shield entrepreneurs from unfair competition and protect them from foreign goods/services that can be locally produced. This, including stable and good governance, will encourage potential investors to take risk and invest, thereby boosting economic activities with attendant capacity to also create more jobs. Government should also be strict in enforcing all relevant laws regarding payment of duties on imported goods and be wary of granting frivolous waivers.
What is your recipe for the economic diversification programme of the federal government?
To boost the economy and make Nigeria less dependent on oil and by implication, a mono product economy, the Federal Government must be ready and be sincere to completely stop the attitude of a rent-seeking entity. Diversifying or paying more attention to other veritable sources of income like agriculture, for example, is a profitable alternative; and, in fact, agriculture was the mainstay of Nigeria’s economy before the discovery of oil at Oloibiri in Bayelsa State.
To reap potential benefit of diversification, the government must invest massively in the entire necessary infrastructure that will help in this direction. When the productive sectors are genuinely supported through the provision of necessary infrastructure, affordable loan and protection from undue interference from agents of Government, Nigeria will confidently be less dependent on revenue from oil. Only then can we say Nigeria is on the road to recovery from the self-inflicted problem of economic recession.
What is your reaction to the issue of alleged multiple taxation by government agencies, especially in Lagos State?
Yes, this is a crucial issue that all stakeholders in Lagos businesses should address with the state government. While government is regulating businesses and also generating revenue, it must ensure that the interests of business owners are not also jeopardized. When big businesses thrive, it has its own multiplier effect in that, other small-scale businesses will boom as well.
But in this era, our businesses are dying, major companies like Dunlop, Michelin and many others have closed shop and relocated to neighbouring countries like Ghana, Cameroon and Co ‘Devoir. The Lagos State Signage Advertisement Agency is frustrating our businesses. They were supposed to play a supervisory role, but their attitude towards us is akin to that of touts.
Despite the fact that we are still battling recession and unpaid salaries, the unwary attitude of LASAA officials, especially with its levies send wrong signals to foreign investors, who want to merge with some members of Outdoor Advertising Agency of Nigeria.