Mr.Tolu Ogunkoya is the Regional Managing Director of leading advertising and marketing communication agency, MediaReach OMD. He speaks here on the challenging operating environment advertisers currently have to deal with, the impact it will likely have on the print media in particular and proffers solutions to these issues. 2015 was quite a tough year for many businesses, including major advertisers.
How soon do you think advertising will turn the corner?
Advertisers who are clients of advertising agencies are currently facing a very tough operating environment, in which consumers’ disposable incomes continue to be eroded by the grim macroeconomic position of the country. This has severely affected the volume of investment through communications agencies. This is the new reality and I do not see a change in the immediate short-term, until key macroeconomic policy issues are well dealt with.
The practice of leading agencies ‘code-sharing’ with international partners on major local accounts appears to be in decline. With the revenue drop in 2015, do you see its resurgence in 2016?
In this very challenging operating environment, the decision to go with the global agency network alignment or use the best local agencies, in view of the crucial value expected from the advertising/media or communication agencies, continues to lie with the advertisers. But as advertising/media/communication agencies we should never take it for granted, believing that global business will land on our doorsteps based on alignment, without our striving to be the best locally.
TV, outdoor and radio continue to take the lion’s share of the advertising naira. Do you see this trend continuing in 2016?
Media, advertising and communication investments will become even more discriminatory in 2016 and my professional experience indicates that audience delivery data and fantastic groundbreaking ideas will become more critical across all platforms; traditional, that is TV, radio, the press and outdoor and digital – the Internet, mobile etc.
The mobile market has grown remarkably in the last few years with over 160million mobile phone subscribers, a good number of them with smart phones. Do you think advertisers have responded as fast as the market has changed?
Digital (internet and mobile) has grown significantly in the last three years and most Nigerians now access digital platforms – usually sites and apps – from their smart phones. Advertisers and agencies are now waking up to this reality and need to push the envelope further from 2016. Advertisers, especially those in ‘outdoor’, have had challenges with regulators and government officials issuing multiple byelaws and demanding multiple charges. How serious a threat is this in 2016 and what solutions exist, if any? At several industry forums, I have put forward the case that the model of government regulation of the Out-of-Home (OOH) media, which includes billboards, as championed by the Lagos State Signage and Advertisement Agency (LASAA)) is commendable for two key reasons. First, discipline and orderliness of billboard positioning and second, the city of Lagos is now better organised than in the past, although this is a combination of many factors put in place over the last eight years by the state government. But my biggest concern has been the unending pressure on operators for state generated revenue through fees, sanctions etc., albeit without any form of audience delivery data to justify these government levies, and many other state governments have followed this path. It is very important that an all-stakeholders conference that will include the designated government agencies is held early this year, to ensure we iron out all differences and deliver a win–win agenda for 2016 and beyond.
Advertisers have been in a running battle with newspapers on measurements and the formation of an Acceptable Behaviour Contract (ABC). Is the matter dead and buried?
I have, under the auspices of the Media Independent Practitioners Association of Nigeria (MIPAN), been at the forefront and continue to engage the Newspaper Proprietors Association of Nigeria (NPAN) on this matter – another win–win initiative, if you ask me. The difference now is that ABCs around the world today recognise online circulation and readership data, which ensures that earlier concerns raised by Nigerian publishers are addressed. The print media will continue to struggle for advertising investments, except for the leading titles, unless this matter is addressed to ensure a sustainable display of value delivered. Which sectors were the most active in terms of advertising naira in 2015? Do you think the trend will continue in 2016? AdEx (Advertisement Expenditure) data I have access to indicates that there has been no major change in the lead categories/sectors. Over the last decade, the lead media investment categories continue to be telecommunications, led by the four GSM operators; alcoholic and non-alcoholic beverages, and fast moving consumer goods across many product categories.
What do media houses hoping to get a bigger share of the advertising pie in 2016 need to do to get it and retain it?
Sell business building ideas backed by audience research; spots or spaces are no longer good enough. Become more discerning as business owners to ensure mundane heritage issues are best dealt with, to survive the tough operating environment we all have to now contend with.
Media houses often accuse agencies of ‘sitting’ on their money after clients have paid. Have agencies and the media developed transparent ways of managing their relationships?
This issue is being increasingly well dealt with by some leading privately owned media houses now. It is not about just swinging to prepayments, because that extreme position stifles business growth. It is more about running professional media organisations and the significant number of private media houses operating across Nigeria today should lead the way. Arrangements with advertising/media agencies are bilateral and the terms of such should be explicitly laid out and well followed, with consequences for variances. A growing number of high-performance advertising/media agencies and media owners are already working their way to success in this area and I am really excited about this development. So we can look forward to decisively dealing with another heritage challenge, which should have no place in our immediate future.
What are your personal business goals for 2016 and how do you hope to achieve them?
I’m keen to learn more in 2016, so that as a senior professional, I can lead my teams from the front to become more focused on presenting business development and growth strategies to our clients and in the process, start the journey that will ensure we become strategic partners and emerge stronger through the very challenging years we now face.