The Advertising Regulatory Council of Nigeria (ARCON) has announced ten sweeping reforms that are considered critical to repositioning the Nigerian advertising industry for growth. These areas are professional indemnity for licensed sectoral groups, capital structure and capital working, 45 days payment threshold, use of local talents, data bank for advertisement agencies and media rates deregulation.
Other areas are engagement and disengagement protocol, publication of ARCON register of practitioners, stoppage of imported advertisement in Nigeria, and National policy on out-of-home advertising,
Two out of six key areas are professional indemnity for AAAN, EXMAN, MIPAN and OAAN and 45 days payment threshold for advertisers to agencies, media. The 45 days payment circle brings to an end irregular payment threshold adopted by members of Advertisers Association of Nigeria (ADVAN).
Speaking at the press conference to announce the new reforms the ARCON Director General, Dr. Olalekan Fadolapo said, “In line with the federal Government policy of economic recovery, inclusive growth, development of local talents, and the directive of the Hon. Minister of Information and National Orientation, Alhaji Mohammed Idris on the need to strengthen the Nigerian Advertising Industry regulatory framework and reverse the negative trajectories currently plaguing the industry.”
On professional indemnity for sectoral groups, Dr. Fadolapo said that “As part of the ongoing advertising industry reform and the need to strengthen advertising agencies service delivery, building capacity and capability as well ensure long term stability in the, each sectoral group: AAAN, EXMAN, MIPAN and OAAN is to provide N1billion professional industry insurance cover for its members.”
This, according to him, covers professional indemnity for members of theirs Association as part of the corporate license requirements. The full implementation of the corporate license regime will take effect from April 1, 2024,” he revealed.
On the controversial credit circle, DG ARCON revealed that the apex advertising regulatory body is collaborating with EFCC, NBC and other government agencies on the implementation of the 45 days credit threshold in the advertising industry.
“Any organisation that offered payment threshold outside 45 days credit policy will be tagged as economic saboteur of the Nigeria advertising industry. Such organisation will be flagged and reported to other government agencies for further investigation and necessary punitive actions,” he added.
Globally, payment threshold is a policy in the advertising industry. He said, “Some stakeholders have been offering Nigerian media and other service providers 120 days payment circle, thereby impoverishing the Nigerian advertising industry. These same stakeholders prepay foreign media houses operating in Nigeria for media service.”
Other key reform points include capital structure and working capital for licensed agencies, use of local talents and data bank for advertisement agencies.
According to him, there is an urgent need to review the capital structure and working capital requirement of the advertisement agencies in line with economic realities and capacity building programmes of ARCON.
“ARCON is currently in talk with the Heads of Advertising Sectoral Groups (HASG) and other relevant stakeholders on the minimum capital requirement for registration and license as an advertisement agency. Regulatory guideline will be issued as soon as position is taken on this,” Dr. Fadolapo said,
On the use of the local talents, ARCON reiterated that it will continue to insist that Nigerians should be considered as primary in all advertisements targeted at the Nigerian market. Use of foreign models and voices are banned except where it is inevitable.”
He said, in this case, application for variation should be formally addressed to the director general with detailed explanation of the rationale for the use of the foreign talents.”