Outdoor Industry: Mixed Feelings as 2010 Dawns

2009 has come and gone, leaving behind a trail of unanswered questions, dashed hopes, disappointments and losses for  some outdoor practitioners, and profit for others. Onyinye Obiweluozor looks into the industry’s business in 2009 and the hopes it offers for 2010.

A lot transpired in the outdoor advertising industry in 2009. The vulnerability of the industry, influenced by several ‘undue’ interference from state governments, narrowed business for some practitioners but not without creating opportunities for others to earn more. Accordingly, while 2009 was a good year for some practitioners, their counterparts considered it staggering and really challenging. It is on record that some practitioners made profit; while others incurred losses. Some had no businesses; while others could not get enough spaces to put their structures. Yet still, some who had structures could not get adverts for their ad spaces.
Despite this, some still had businesses all through the year – enough to make it public that they do not have vacant sites as all their boards and sites were already booked till the end of the year.

Challenges in 2009
Some of the many challenges that plagued the industry last year were the springing up of outdoor regulating agencies in various states, high taxation, outright ban on registration, stringent bank policies on loans occasioned by the Central Bank and the global economic meltdown.
After the Federal Capital Territory, Abuja, started an all out resolve to sanitize the activities of outdoor practitioners around the FCT, Lagos State followed suit with Lagos Signage and Advertising Agency (LASAA) as the regulator approved by the state government to sanitise and beautify Lagos. Other states, seeing the ‘successes’ of these agencies, took their cues from there and started setting up their own regulatory agencies.
Complaints from practitioners were that these regulatory agencies operated with stringent rules which were detrimental to the success of the business. Lots of practitioners were pushed out of business, denied registration and right of practice. Some also relocated from their bases to other states with less stringent rules on practice.. Bigger practitioners with more money were also noticed to garner most of the juicy sites to the detriment of their smaller counterparts. The Central Bank did not help issues as practitioners who needed loans from banks were turned down because of stiff CBN policies on credit.
The global economic recession also narrowed business for the practitioners as advertisers were forced to reduce their spending, cutting down on advertising generally including the outdoor.
 
Reactions from Practitioners
Practitioners operating in Lagos State were the most hit. Some of them had to move from the state to other parts of the federation with less stringent regulations than that of the Lagos State Signage and Advertising Agency (LASAA). As the outdoor companies operating in Lagos were trying to resurrect and recoup all that was lost under LASAA’s sledge hammer, practitioners operating in Enugu could not say the same for themselves.
2009 was absolutely not a good year for the Enugu operators. There were complaints that the state ministry of environment alongside Lona Global Services, a consultant hired by the state government to sanitize the outdoor industry, indiscriminately pulled down many bill boards without prior information.
Mr. Soloo Akugha, Managing Director, Eastwood Advertising Ltd, an outdoor company operating in Enugu, says the state government alongside their consultant is killing the business.
“The state ministry of environment, in conjunction with their consultant, has narrowed our business. They have pulled down several boards saying they are below specifications and have geometrically increased the tariff paid on each board. We were not given prior information before our boards were pulled down,” he says..
Mr. Iheanyi Martin, Managing Director, Framework Communications, another operator in Enugu, says, “In the FCT and Lagos State where such regulations already exist, you can notice that despite the stringent rules, the face of outdoor business in these places has been lifted by well lit roads and other things. But here in Enugu, they have done nothing with the monies we have been paying and we are still expected to pay more.” Outdoor business in Enugu is yet to feel the impact of this consultant despite the increase in amount payable for site allocation.
However it wasn’t all bad news in 2009. Practitioners operating in Lagos have this to say:
Mr. Sola Akinsiku, Managing Director/Chief Executive, KOK Visibility Edge, says that 2009 was better than the previous year. “Outdoor business generally for 2009 has been full of challenges but we cannot necessarily say that these challenges were all because of the Lagos State Signage and Advertising Agency. The banks’ issue with the Central Bank of Nigeria, clients’ challenges and the government challenge all contributed to the ups and downs of the year. But towards the end of this year, some level of normalcy was noticed such that some companies can say they made profit,” he says.
F. ‘Babu Akinbobola, Chairman/CEO Media Links Ltd, an outdoor advertising company, is of the opinion that LASAA has done well for the industry. “We all were adversely affected by their sledge hammer and lost several investments. Looking at the industry now, it’s not all cries. The billboards are no longer clustered which improves their effectiveness. They are now environmentally friendly and most of the roads housing these boards are now well lit. We charge adequately for the use of these billboards and to me, it is good for the business,” he says. 
Prince Emeka Okezie, Managing Director/CEO, Graphic Projects Limited, and General Secretary, Outdoor Advertising Association of Nigeria (OAAN), concurring with others, says, “The effect of their regulations, though not without negative effects on our investments, has helped the environment. OAAN tried regulating the industry but it was too expensive for us to handle. Now, the clustering of boards has greatly reduced. Our billboards are now more acceptable to the environment and the quality of structures has generally improved, though it may not be pocket friendly.”
However, despite the encomiums poured on these regulatory agencies, some practitioners do not concur with the praise-singers.
A seasoned practitioner (names withheld) opines, “It is very obvious that there was no business in 2009. The government policies destroyed the business. They destroyed confidence in the business. I believe in upgrade but what was done was not upgrade, particularly in Lagos State where the business was at its peak. In the past two years, what the government has done is half measure, badly administered and filled with unanswered questions and gaps in the administration, operated by a group of people.”

Hope for 2010
From indications, this year generally looks unsure for practitioners. While some are saying it will be a lot better than the previous year, some are opining that it might not be so, owing to the government’s unreliable policies that are changed inadvertently to suit the governments and their regulating agencies. Another group of practitioners are uncertain of what the turn of business will be, choosing rather to watch as events unfolds. The fears are that more severe policies may come and the shaky global economic situation is still a major point of worry. However, a higher percentage of practitioners speculate that this year will be better than 2009.
Mr. Bankole Ademulegun, President, Outdoor Advertising Association of Nigeria (OAAN), says “2010 will be a lot better because members have invested in new products in the previous year. This year is the time for these investments to yield profits. We are looking at maximizing whatever space we are given. 2010 will be better because some structures have been amortized over a couple of years. Once we have gone through the first year, the following years will be better of.”
F. ‘Babu Akinbobola agrees that “2010 will be better of course. The signs are there. We have likely mastered the challenges we encountered in the previous years. We are now in 2010 – more new boards and new challenges – we are no longer afraid. Luckily advertisers are beginning to wake up again to outdoor advertising.”
Chief Terry Otuya, Managing Director/CEO, Panafy Ltd says, “Every bad whether eventually clears and we expect that it clears much faster this year so we can get back to our businesses.” Mr. Sola Akinsiku optimistically predicts that “2010 as lots of hope for outdoor practitioners especially with the global economic situation beginning to pick up.”
Mr. Obi Nnaobi, Chief Executive Officer, Lookout Communications, opines that “this year has hope in store for the practitioners that survived the onslaught of the various regulatory bodies. Also, advertisers now understand the importance of the media to reach their target audience”. Still, other practitioners seem to have lost hope in the industry.
A practitioner who pleaded anonymity had this to say: “2010 is unsure. Advertisers have lost confidence in the business. As for this year, I don’t know what it holds for practitioners.”
Another practitioner who also asked for anonymity asks, “What hope do we have in the industry this year. The government, through their stringent policies, has crushed our creativity. The business environment has been made very un-conducive by these policies. We do not know what they will come up with this year.”
With these opinions, there seems to be a disparity among practitioners on what the industry will look like in 2010.
 
2010 in Perspective
Despite some of these uncertainties, it is most likely that more states will set up regulatory bodies, taking their cue from the success of the Lagos State Signage and Advertising Agency (LASAA). This is expected to see some resistance from practitioners in these states as their conventional boards are phased out. In all, it seems like technology, innovation and creativity will be the in thing in the industry in 2010.