In recent times, the practice of outdoor advertising seems to be endangered by the multiple taxation as well as alleged over regulation in the industry and this has discouraged many practitioners from having enough courage or confidence to forge on with the once lucrative business.
Since Lagos State established Lagos State Signage and Advertisement Agency (LASAA) followed by some other states of the federation such as Oyo, Osun, Ondo, Ekiti, Cross River, Rivers, Kano, Abuja among others,it has been takes of pains and sorrows reeled out by the practitioners. Many have abandoned the business because it is no more profitable.
Meanwhile, Brandcampaign. Com.Ng took time to have a chat with one of those who still see the business of outdoor advertising as one that still has a future. He is Adebayo Owolabi, Managing Director of Tripple A Limited, Lagos. Excerpts :
Brandcampaign. Com.Ng :Can you appraise the practice of outdoor advertising before and after the proliferation of regulatory agencies?
Owolabi :Outdoor advertising practice used to be fun and enjoyable with reasonable returns to practitioners when we were dealing with local government councils only. Of course, this tier of government is constitutionally empowered to collect rates on advert and campaign exposures in their respective constituencies and areas.
The practice was good then, because there were less problems and hitches to deal with. The charges of these local councils were reasonable and also sustainable for budding businesses to thrive. You hardly hear of debts, because charges of local councils were usually and often based on campaign exposures and normally paid by pratitioners as at when due. Since state governments usurped the power of local councils by setting up regulatory agencies or appointing revenue consultants to manage and control outdoor practice in their respective states, the industry has gone comatose till today.
These state governments see outdoor practice as a veritable source of revenue to beef up their IGR to fund the state budgets, a decision that is gradually killing the industry with its attendant loss of jobs. These regulatory agencies and revenue collectors came up with their unrealistic, unsustainable and strangulating tariffs that have chocked the industry. Some of these agencies would also insist you pay these unscrupulous rates, when you do not even have advert campaigns on your billboards in a depressed economy of Nigeria today. Where are they expecting you to get the cash from?
Brandcampaign. Com.Ng :Your company Triple A Outdoor Limited has been on the scene for long. Can you tell us how profitable it has been in the midst of recession?
Owolabi :You are right we have been around for some time now. As a matter of fact, we started full business operation in 2001, though I’m the third MD of this Agency. As I said earlier, outdoor practice used to be profitable but it’s a different scenario today since the madness of these regulatory agencies and revenue collectors started.
Outdoor industry is now an endangered sub-sector gasping for breath and survival under the strangulation of state governments in the name of regulation. You cannot be talking of profit now but survival to even keep the buiness afloat. Many outdoor agencies had closed shop due to harsh operating environment and systemic hardship and challenges fostered on the industry by the state governments and further worsened by recessed Nigeria economy.
Brandcampaign. Com.Ng :What is the unique selling point of your company and which innovation have you introduced in the industry?
Owolabi :Our processes are well-templated and the quality of our service delivery set us apart. Our spread is equally an asset because we are not a regional or one-state agency, we have presence in virtually all states of the federation. Also, our billboard structures are of high standard wherever they are located irrespective of billboard format coupled with superb maintenance culture.
More importantly, we always act with sense of urgency, integrity and commitment to continuous improvement in all areas of our operation, while helping our clients to succeed in the marketplace. Concerning innovation, we championed the introduction of backlit boards in Nigeria, working in concert with our big client (British America Tobacco – BAT) to promote and project international brands like Rothmans, Gold Leaf cigarettes and others. However, there was a worldwide clamp down on tobacco advert in year 2005 but this innovation remains but now improved upon by many practitioners within the industry.
Brandcampaign. Com.Ng :How can outdoor advertising companies survive this recession? Suggest options.
Owolabi :As I said earlier, many outdoor agencies had closed shop when they could not survive the heat due to harsh operating environment. For us in Triple A, we are able to stay afloat, having taken some hard and decisive steps to stem our operating expenses. We have been making losses for the past five years or so with its attendant erosion of shareholders’ fund over the period.
We took decisions to shut down our four regional offices and keep only the regional managers who operate from their respective houses, rationalized our operation and also reduce head count. We also tried to checkmate our running and overhead costs by cutting salaries, freezing wages and salary review among other measures. By special grace of God, Triple A is weathering the storm hoping for better days ahead.
Brandcampaign. Com.Ng :How best do you think members of OAAN can have maximum returns on investment in the midst of this recession?
Owolabi :OAAN as a trade association coupled with APCON (the umbrella body) should work closely with these state regulators and revenue consultants to come up with a blue print to resuscitate the outdoor advertising industry that is currently in dire straits. We can’t be talking of returns on investment under these draconian tariff as orchestrated by different tiers of government and revenue consultants, their rates are not sustainable and also chocking the practitioners and businesses.
Do not forget that outdoor advertsing is capital intensive and dearth of credit to build iconic billboard structures is another drewback. We have systemic challenges in outdoor advertising industry which must be satisfactorily resolved among all stakeholders, the current situation is only worsened by recession in the Nigeria economy. OAAN members must come together as unified force to resist these oppresions coming from left, right and centre for survival and soul of our businesses in particular and outdoor advertsing industry in general.
Brandcampaign. Com.Ng :What is your company’s projection for the next five years?
Under the present hardship, what is paramount for now is survival, so that the Agency does not even go into extinction like others. We are currently pre-occupied with measures to keep the Agency afloat hoping that the harsh operating environment becomes conducive in the shortest possible time. With favourable and conducive environment coupled with vibrant economy, you can draw up realistic plans in the short, medium and long terms that are achievable going into the future.
Brandcampaign. Com.Ng :Tell us briefly about your professional and work background and role models in the advertising industry.
Owolabi :I obtained my first degree from university of Ife (now OAU) in 1985 and later trained to be an accountant in two different accounting firms. I qualified as a Chartered Accountant in 1990 and worked briefly in the finance sector upon my certification before moving to Glaxo (the pharmaceutical giant) in 1993 as Audit Manager. I worked in Glaxo for about seven years and I rose to the position of AGM (Finance & Planning) before leaving the company in year 2000. I joined IMS Group in 2001 as Group Finance Director and was later seconded to Triple A Outdoor by IMS Board (a subsidiary Agency of the IMS Group) in year 2005.
I have role models but regarding advertising industry, I respect Mr. George Thorpe (Vice Chairman, IMS Group) for his level of sound knowledge, versatility and intellectualism concerning marketing communication practice.