LASAA’s Moves Threaten N80bn Billboard Business in Lagos

This is certainly not the best of times for the 86 year old outdoor advertising industry in Nigeria. Reason? The oldest and unarguably the cheapest advertising medium is more than ever before, being confronted with regulatory challenges that may finally herald its nunc dimmitis.

Hitherto regarded as a support medium in brand management business, billboard advertising grew in leaps and bounds through innovative products introduced by the practitioners over the years. This elevated the medium to a primary platform in brand advertising. It is ironic to say that the evolution of the medium as the cynosure of all eyes has indeed become its hubris.

Indeed, the formation of Lagos State Signage & Advertisement Agency (LASAA) in 2006 by the Lagos State government was the genesis of the down-ward trend of the industry that employs over 30,000 workers with no fewer than 150 registered corporate members of Outdoor Advertising Association of Nigeria (OAAN), the umbrella body of practitioners. The association, it will be recalled, is a sub-sector of Advertising Practitioners Council of Nigeria (APCON), a government regulatory agency of the federal government charged with regulating advertising in all aspects and ramifications.

Nonetheless, the setting up of LASAA by the Bola Tinubu’s administration eight years ago threw spanner into the works of outdoor advertising practitioners. The new agency of Lagos  State  government established by an edict was mandated to regulate and control display of signs and outdoor advertisements in the metropolis. The emergence of LASAA, in view of the existing regulatory federal agency like APCON, was seen by industry players as uncalled for as it was aimed at multiple taxation and multiple regulation.

No sooner was LASAA set up than it went to work, destroying and removing billboards and signages worth several billions of naira with impunity. The exercise actually occasioned the eclipse of several companies who could no longer ply their trade due to draconian rules and regulations rolled out by LASAA under its former Managing Director, Mr. Makanjuola Alabi. Not only was LASAA poised on reducing the numbers of billboards within the Lagos metropolis, the agency increased astronomically permit fees for operating out-of-home business in the state. As if this was not enough, LASAA, in no time went into actual practice by directly erecting special and specified billboards with premium rates at strategic sites and locations hijacked from original owners in the industry.

The challenges grew as OAAN in conjunction with APCON made several appeals to LASAA to see reason without success.
Realising the high cost of patronising billboards for brands advertising exposure, the brand owners, under the aegis of Advertisers Association of Nigeria (ADVAN) tactically enjoined its members to explore other areas in the promotional mix to promote their brands.
This however did not help the industry and the few practitioners who struggled to pay LASAA rates but yet had no brand owners coming forward to rent the billboards for brands exposure. For almost two years, most billboards in Lagos metropolis were vacant while brand owners tactically boycotted their patronage.

This counter-reaction, with the high-handedness of LASAA ,   forced the state government to rethink and soft-pedal on its draconian rules when it appointed Mr. Tunji Bello, now the state’s commissioner for Environment as a replacement for the pioneer Chief Executive of LASAA. His appointment was no doubt a period of huge relief for the beleaguered industry as most of the wrongs done under the headship of his predecessor were corrected. By the time LASAA under Bello carried out the audit of all billboards in the state, it was discovered that over two-thirds of hoardings in the state were directly owned by some LASAA officials or their proxies.

In other words, the agency which claimed to be a regulator  had suddenly become an operator and a competitor, thereby throwing legitimate professionals and business owners out of trade. Bello had a short reign at LASAA as Governor Babatunde Raji Fashola found him more suitable for a bigger and greater role as environment commissioner. Thus, the exit of Bello ended the honeymoon between LASAA and OAAN, as the new replacement,  Mr. George Noah, also a journalist, took industry watchers by surprise. Though soft-spoken, suave and urbane, Noah, the new LASAA helmsman had his cards well kept to his chest at inception. Not the one to snub banter he maintains an aloof posture of a cherub in an apostolic congregation.

Since he assumed office almost two years ago, industry operators and indeed OAAN as a body has been struggling to deconstruct the man who appears too humble to hurt a fly and yet very resilient in intents and purposes as far as regulation and over-regulation is concerned.

The recent press statement widely circulated in major newspapers by Noah has indeed finally unmasked the gem in the new LASAA hench-man. In the report, he was reported to be leading a vanguard for the formation of Outdoor Advertising Regulatory Association of Nigeria (OARAN)!

According to the news report published recently in a national newspaper, “the Lagos State Signage and Advertisement Agency is spear-heading the formation of an association, to protect the interests of outdoor advertising regulatory agencies.”
The  newspaper quoted sources at LASAA as saying that, “the proposed body would help promote a sustainable economic growth in a vibrant outdoor advertising sector”.

The LASAA chieftain was said to have observed that the formation of the new body was exigent as “outdoor advertising regulatory bodies are faced with similar challenges, including the decline of out of home advertising spending due to competition from internet, radio and TV”.

His said: “it is important to have a platform, which allows for ideas sharing, protection of industry interests and a general collaboration for sustainability in the emerging world.”
Noah was said to have listed other challenges faced by the regulatory agencies to include: rates, human resource capacity and outdoor sites in military and police formations”.

It was also gathered that LASAA’s key initiatives include the signage and outdoor advertising master-plan to improve the visual communication environment in the state and also the expectation that this collaborative effort will “bring about the much anticipated change and growth within the outdoor advertising landscape across the country.” Consequent upon its plans, other agencies expected to be recruited by LASAA for the launch of this initiative of OARAN are Ogun State Signage and Advertisement Agency (OGSAA); the Ekiti State Signage Agency, (EKSAA) and their Kwara State counterparts, KWASAA amongst other prospective recruits.
Since the publication of this initiative by major newspapers, the industry and indeed other relevant stakeholders have been dumb-founded over what LASAA  actually set out to achieve.

With the current regime of over regulation and multiple-taxation by different tiers of government, not quite a few industry operators are of the view that the new initiative by LASAA is to finally nail the coffin for out-of-home industry in Nigeria while throwing several thousands of Nigerians into the labour market. Already, it was the general consensus in the industry that the decline in out-of-home spending was due to over-regulation and multiple-taxation!

This  development, more than anything else, was said to have provoked advertisers in cutting down on billboards advertising budgets.
Reacting to the new development, Mr. Sola Adeyori, a media specialist working with a top media buying agency in Lagos State is of the view that “LASAA’s latest onslaught will surely spell doom for the tottering out-of-home business in Nigeria”.

He premised his argument on the fact that advertisers in the country are increasingly finding it difficult to allocate budgets to billboard advertising which rates continue to rise while manufacturers are daily suffering from unsold inventory due to low consumer purchasing power.

“How can you rationalise an extortionist gang-up in the face of declining fortunes of  the  brand owners?, he queried.
Also commenting on the LASAA project, Mr. Gbenga Akinsola, an out-of-home practitioner said the moment LASAA finally launches this “dubious collaboration,” all out-of-home advertising operators should be prepared to go and learn new trade as there will be no business to hang on to. He said: “We are all doomed if this LASAA effort sees the light of day”. Already, our clients have been turning down offers to renew their billboard campaigns; instead, they have been cancelling outright any billboard campaign.

His views were corroborated by Mr. Charles Njoku, a brand manager with a leading brewery in Lagos State. Njoku who was obviously bitter about such a thought by LASAA concluded that the agency was gradually over-reaching itself.
His  said: “I pray LASAA is not trying to over-reach itself with this gambit. The activities of this agency have made the brand owners cut-down on out-of-home budgets, yet they are thinking of forming a dubious association to further extort. We shall boycott the medium for them,” Njoku concluded.

To actualise its aim, LASAA has concluded plans to hold a major outdoor advertising conference in July. Tagged “The African Outdoor Advertising Conference and Exhibition (Lagos 2014)”.

The expo is expecting no fewer than 400 guests from 30 countries, cutting across Europe, Asia, America, Africa and Nigeria. The fee-based expo is scheduled to hold at Eko Hotel, Victoria Island between June 25th – 27th 2014. The theme of the three day conference is: “The Business of Outdoor Advertising in Africa. Opportunities and Challenges”. Since the agency hinted on this conference, not quite a few industry watchers have been cautious on this type of ambitious industry initiative by a self-acclaimed regulator becoming an operator.

Industry feelers have revealed that LASAA’s discreet invitation to JCDeCaux SA was a prelude to the grand-plot to ware-house the entire Nigerian out-of-home business in one single global company through the active connivance of LASAA and its local confederates parading themselves as regulatory agencies. A brief check on JCDeCaux on the net reveals that it is the number one outdoor advertising company worldwide and a market leader in Europe and number one in Asia Pacific.

The global agency’s foray into Ghana and some few West African markets was said to have been fiercely resisted. Sources in the industry revealed that there are likelihood of an alliance between JCDeCaux and LASAA, the details of which are still conjectural.

Be that as it may, out-of-home stakeholders are of the general consensus that the sector is indeed poised for a turbulent tide.
As it were, both APCON and OAAN are said to be dumb-founded as LASAA appears to have taken the wind out of their sail. The pertinent question on the lips of many is “wither the future of out-of-home industry in the light of this fresh on-slaught?” only time will tell.