About three weeks back, we looked the way of outdoor advertising as an industry in this economy, focusing on its potentials from nearly all its ramifications. That effort was a huge investment of emotion, driven by concern for people who have been confined to lack and suffering due to no fault of theirs. For the first time, we did down-play the beauty of outdoor profession (at least we at MC&A DIGEST have written four articles on outdoor advertising practice in Nigeria). For the most times we have had to look at outdoor advertising in this economy, our concern have been its contribution to advertising practice, its efficiency as a marketing communication or advertising platform and some considerations of its practice rules and ethics.
After the story we did on clients’ indebtedness to outdoor service providers, word reached us to the effect that arguably the biggest debtor to outdoor advertising service providers sent word to her creditors, inviting them to negotiation meetings. According to the information we got, this debtor alone, owe outdoor companies servicing her business well over a billion Naira. The age of these debts stretch far back three years.
On a second thought, we decided not to bother following up on the outcome of the proposed meeting between the client and the various outdoor companies invited to the “debt management” meeting (our categorization). However, the invitation from the client to her outdoor agencies clearly stated the issues for discussion as (a) to discuss the debts with specific reference to the dates they fall due, in small parts (b) the client-designed payment pattern and (3) the brief for 2013.
One can take it, that the agenda, the terms of reference and the focus of presentation for the meeting had been determined. Fair enough, for as it is, those owed really have no option. In fact, the debtor client here could be said to have demonstrated some level of magnanimity in calling for this debt management meeting. In fact, the invitation also bore a latent intent or promise to make some payment at the conclusion of the said meeting.
Beside this BIG CLIENT that is ironically so financially strong to carry a debt of about N1.2 billion Naira (owed a very small fraction of her service providers/suppliers – compared to its size of operation, business associates and vendors) there are many other smaller clients scattered around various market segment, owing outdoor advertising agencies. A lot of them are posturing as not being financially healthy enough to even negotiate their debt.
Yet, as we have profiled in one of our past article on outdoor advertising practice in Nigeria, corporate and individual outdoor advertising service providers must keep on practicing. Consequent upon their debt burden, some of these service providers have closed shop. Over 70% of them today are so heavily indebted they cannot run their offices. At the close of business year 2012, some of them simply disengaged their staff and opted for one-man show pending when situation improves.
Ordinarily, one would consider business-to-business indebtedness as expected in every business relationship. Based on inter business relationship, debt payment or servicing terms can be left to individual determination. The over-riding consideration at such levels of corporate interaction will definitely be determined, to a large extent by corporate policies, permitted concession, extent of ‘friendship’ and such considerations that should not jeopardize the financial health or corporate existence of either party. Among big corporate bodies, policies are renegotiated at periods of exigency to accommodate hitherto difficult concessionary changes, where the elements of ‘friendship’ listed above are at play.
Above the table, however, there are industry-wide policies guiding most businesses across markets, by which defined sector players operate. Such rules or policies are borne out the need to protect given industry players against likely default in business agreements, especially financial obligations in form of payment for services rendered or goods delivered. So, we find that among legal practitioners, a client is not likely to owe his or her law firm for services rendered and move on to take same brief (or any other brief for that matter) to another firm without settling the debt owed the former law firm. This is almost like a practice rule.
Even among ‘Okada Riders’ their association will not permit such irresponsibility on the part of passengers. It is all about cohesion.
From our observation, outdoor advertising practitioners may begin to look inward, in order to address this debt issue. Out immediate advice is for the sector’s association to build cohesion for and among its members. In India, the Indian Outdoor Advertising Association is so strong; it clearly states its membership is well over 78% of outdoor corporate service providers in the country. For a country almost the size of a continent, such achievement is highly commendable. Its size enables the association so much power to establish and enforce practice rules, code and ethics. The members are sure to be protected against system abuse. It is not unlikely that clients do owe outdoor agencies in India, but for a scenario such as prevalent in our local market to play out there, is certainly not permissible.
Practitioners in developed economies such as South Africa, United Kingdom and the United States of America (to mention a few), the challenging issues are not indebtedness and member business shut down due to clients’ indebtedness. Practitioners in those economies are now focused on innovative creativity. They are rather challenged by issues such as technological advancement in outdoor advertising practice, research and strategic planning and global innovativeness (not begging to be paid for job done three years back. And we think, perhaps, the debt situation with practitioners in this market is a call to-duty for industry leaders in this market. Outdoor Advertising Agencies Association of Nigeria supported by Advertising Practitioners Council of Nigeria must begin to build cohesion necessary to properly represent and protect outdoor advertising practitioners from the irresponsible financial behavior of some clients who do not respect financial or monitory agreements. In fact, some of these businesses were not guided by any clear-cut industry-wide terms.
Clients who engage services of outdoor companies must begin to learn to respect business terms and agreements. It is even more disturbing when such debtors are doing good business. Take the case of the GSM company owing so much over such a long term (three years old debt); the same service provider who offers service pre-paid, pays her staff members handsomely, posts huge corporate personality profile…what could be her reason for not paying her outdoor advertising agencies?
