In recent years, the outdoor advertising industry in Nigeria has been badly hit by the recession that ravages the country’s economy. Our editor, Akinwumi Dickson had a chat with the president of OAAN, Mr Tunde Adedoyin who bared his mind on several issues from doing outdoor Media business in a recession to relationships with media independents and his plan for a second term in office. Excerpts
Can you evaluate the practice of Out-Of- Home Advertising in a Recession?
The recessive period is not peculiar to the Outdoor advertising media or communications industry alone but the entire business gamut because it is like a chain which starts from the manufacturer because some of them are complaining badly .
They cannot even assess foreign exchange to buy raw materials and majority of them are not even producing at full capacity not because they do not want to, but because they cannot assess the funds. Some of them who even have the naira found it extremely impossible to get dollars. And even those that are lucky that their raw materials are not much of foreign content, they do not have enough money for purchase or procurement because of reasons such indirect devaluation of naira, as delayed payment of salaries. These add to the problem of recession.
Companies are now cutting costs, more people are losing their jobs. As it relates to outdoor business, most companies that had, for example three man production team had to reduce the number and resort to the use of consultants who are paid on cash and carry basis for jobs done for these companies. You cannot force businesses to come, sadly enough; the situation has not been friendly. We just hope that the economy improves. Firms that were using three vehicles for marketing had to reduce to one or two, firms that had accountants or finance directors had to streamline.
Imagine some multinationals had to cut down their advertising budgets and the only way to survive is to cut cost, look inward ,be more efficient and wish the price of oil in the international market appreciates for a more buoyant economy.
There is this notion that media independents have not helped the fortunes of outdoor media owners in terms of rates paid as well as discounts on hoarding purchased on behalf of their clients, what is your opinion?
What is think is that, yes, media independents are the intermediary between media owners and brand owners and we get our businesses from them.
The fact is what I have seen over the years is that it is even the media independents that are undoing each other.
They promise heaven and earth to the clients, promising high discounts ,that they can get higher discounts on hoardings without even contacting media owners before making their presentations. They do that just to please their clients and to get businesses.
This is not peculiar to only outdoor media, even radio and television.
These are done by some of the media independents, just to be in business and to tell their directors that they are working, but I feel there should be a limit to what they promise their clients. It is a fact that they get their own fee and
Start trading away other peoples’ rights and I don’t think that is normal, I must tell you that we the media owners would not be there when they were making their presentations to checkmate any misinformation.
When we look at the level of profitability on our own part, look at our profitability sheet, we can now say rather losing this business, why don’t we take it.
Of course, if the business or economy is doing well, we are not likely to be in this ugly situation. For now, we just have to manage ourselves, continue to be more transparent, continue to tell the truth at all times, continually engage ourselves and be mindful of the consequences of our actions.
In the midst of the current economic recession, can you confidently say that outdoor advertising business is still profitable or attractive to any new investor?
Whether it is profitable or not, your will always find those who are passionate about the business and they would always invest in it. These days, it is not business as usual.
In the past years, you would find people who did not own stand-up sites, just empty sites and some clients or agencies would want to help and give Media Purchase Orders(MPOs) and go and develop the sites and install billboards.
Most agencies these days would not buy empty sites. Your billboard must be standing. And when you look at the cost of building Unipoles, constructing gantries, bringing in LEDs, Scrollers, they are so expensive. If you do not have enough funds, coming into outdoor business is time wasting.
Installing the regular 48 sheet board costs an average of N250,000.00 per board and for about four, that will go for N1,000,000.00(one million naira only)
And what will four sites give you in a short term? And there is no guarantee that as you are building, you are getting clients. Like I said, people will still come into the business. If you don’t have the capital, it will not be a profitable business. Outdoor advertising is a long term business. You must prepare for the long run, you need a good site location, even in trying to invest, you still need a lot of experts that will help you analyse the structure, the site, the location before you invest your money in it.
It is a business that needs a lot of planning and strategy.
So, my advice to those who are coming into the business to join us in OAAN is that they must be strategic, must have passion, must prepare for the long run and must have the funds.
Its a business that will stay forever. Of all the media, outdoor is one that the target audience does not pay for. Target audiences pay for Radio, Television, Newspapers, even the digital aspect, you must have a mobile phone. To listen to an advert on radio, you must pay PHCN, buy battery, for print adverts, you must buy newspapers or magazines but to watch or view billboards while you are moving or traveling on the highway, you need not pay. It is always free whether you have money or not.
So, I want to conclude that as a medium, outdoor will ever be relevant.
You will soon complete a first term in office, having spent one year and eight months, evaluate your first term in office and would you recontest for another term?
Well, the first thing is to look at the progress made so far during my first two years. I still have some few months to go in my first term. We have done a lot of engagements, with State governments, agencies of government, because of the peculiarity of our business. We are on the streets, government is our landlord and we are trying to resolve issues. I want to believe that it is a continuous effort.
Whether I decide to go for a second term or not, anybody who wants to take over from me at OAAN, would have to continue from where I stopped. What is important is the capacity to solve the challenges and this is what we have been trying to do and it has not been very easy because most of the problems are linked with governmental issues but with God on our side, we are forging on and as for recontesting as OAAN president, I have not made up my mind.