As part of efforts aimed at strengthening the Nigerian advertising Industry regulatory framework and reversing the negative trajectories currently plaguing the industry, the Advertising Regulatory Council of Nigeria (ARCON), has unveiled a new set of regulatory framework for the Nigerian advertising industry:
The framework covers professional indemnity for sectoral groups, capital structure and working capital, 45 days payment threshold, use of local talents and data bank for advertisement agencies. Other areas are media rates deregulation, engagement and disengagement protocol, publication of ARCON register of practitioners, stoppage of imported advertisements in Nigeria, and national policy on out-of-home advertising.
The new framework was revealed by the director general of ARCON, Dr. Olalekan Fadolapo, frpa, at a press briefing recently in Ikeja, Lagos, South West Nigeria.
According to Dr. Fadolapo, as part of the ongoing advertising industry reform and the need to strengthen advertising agencies service delivery, build capacity and capability as well ensure long term stabili_ in the industry, each sectoral group, i.e. AAAN, EXMAN, MIPAN and OAAN is to provide N1B (One Billion Naira) professional industry insurance cover for its members. “This covers professional indemnity for members of their Association as part of the corporate license requirements. The full implementation of the corporate licence regime will take effect from April 1, 2024,” he said.
The ARCON boss also said that the council is currently in talk with the Heads of Advertising Sectoral Groups (HASG) and other relevant stakeholders on the minimum capital requirement for registration and license as an advertisement agency and regulatory guidelines will be issued as soon a position is taken on this. This, he explained has become necessary because of the urgent need to review the capital structure and working capital requirement of the advertisement agencies in line with economic realities and capacity building programmes of ARCON.
On payment threshold, the director general revealed that ARCON is collaborating with EFCC, NBC and other government agencies on the implementation of the 45 days credit threshold in the advertising industry. “Any organisation that offered payment threshold outside 45 credit policy will be tagged as economic saboteur of the Nigeria advertising industry. Such organisation will be flagged and reported to other government agencies for further investigation and necessary punitive actions.”
He explained that globally, payment threshold is a policy in the advertising industry. In the UK and Europe, it is 30 days while the best you can get is in Africa where it is 45 days. However, “some stakeholders have been offering Nigerian media and other service providers 120 days payment circle, thereby impoverishing the Nigerian advertising industry. These same stakeholders prepay foreign media houses operating in Nigeria for media services. Some had insisted on old practices that have led to industry debt
and exploitation of media owners. We can no longer allow this to continue.”
As stated before in many fora, ARCON, according to Fadolapo, will continue to insist that that Nigerians should be considered as primary in all advertisement targeted at the Nigerian market. “Use of foreign models and voices are banned except where it is inevitable. In this case, application for variation should be formally addressed to the director general with detailed explanation of the rationale for the use of the foreign talent. Approval is not automatic. If you are selling your product to Nigerians, use Nigerians to your advertisement,” he posited.
He also spoke on other aspects of the new regulatory framework:
“ARCON has commenced a national audit of advertisement agencies in line with its establishment Act as part of our effort of building a robust and beneficial data bank for the Nigeria advertising industry. ARCON will write to seek all relevant information from stakeholders and ensure that only licensed advertisement agencies are engaged. We have started reaching out to advertisers both private and public organisations, State Signage Agencies etc on this. A directory of advertising agencies in Nigeria will be produced immediately after the completion of the first audit exercise.
“Media Rates remains deregulated in the Nigerian Advertising Industry. No stakeholder or group of stakeholders should regulate media rates charged by the Nigeria Media Houses. Nobody regulate advertisers on prices of their products. Let demand and supply determine sales and purchases of media services as it is in the other sectors of the industry. The Nigerian media houses should be accorded the same level of respect and business practices accorded to foreign media organizations operating in Nigeria.
“All stakeholders are requested to adhere to the engagement and disengagement procedure as stated in the Advertising Industry Standard of Practice (AISOP). ARCON has commenced full implementation of the AISOP framework. Where an agency is disengaged without proper reconciliation of financial matters before engaging another agency on the same account, and ARCON is petitioned. The new agency and engaging organisation will be investigated, and where they are found culpable, they will be sanctioned.
“ARCON has been battling with issues of exposure of unapproved advertisement, illegal advertising practices, damaging actions of unregistered persons claiming to be advertising practitioners among other challenges. Sequel to the above, ARCON would publish its membership register as soon as the ongoing membership review exercise is concluded. A notice has been issued in this regard by the Registration Directorate of ARCON.”
Dr. Fadolapo was emphatic on the council’s position regarding production of advertisements consumed in the Nigerian market. “ARCON will continue to insist on production of advertisements in Nigeria, stop the capital flight and development of other economies by some Nigerian organisations’ attitude of going out of the country to produce advertisements meant for our market.”
He insisted that all commercials to be exposed to Nigerians should be produced in Nigeria. “We need to create jobs for the Nigerian youths, help grow and develop the support service sector of the industry and circulate funds within the Nigerian advertising ecosystem. Where advertisements are produced outside Nigeria, such advertisements will be heavily taxed. Consequently, the variation rate will be reviewed upwards shortly.”
The ARCON helmsman also spoke on the out-of-home advertising sector. He said ARCON is collaborating with States’ Signage Agencies and OAAN on the need to formulate a broad base OOH Advertising regulatory framework for the industry. “We will seek input from all relevant stakeholders and ensure industry participation in the framework hence a committee chaired by the director general of ARCON has been set up to plan and organise a national workshop on OOH advertising business.”
The director general who promised that the council will continue to engage all stakeholders in ensuring a win-win situation for the growth of the industry in particular and the Nigeria economy in general sought for the support of all stakeholders to sanitize the Nigerian advertising industry and create a better ecosystem.
