‘Raping advertisers, recoiling growth’ A critical look at FG-backed APCON to ARCON reform (Part II)

Note: If you’re yet to read the first part of the article, kindly click HERE. But if you’re already done that, continue the conclusion below.

Drawbacks and Concerns

Legitimacy and Legal Attrition

Legal practitioners have raised concerns about the constitutionality of some aspects of AISOP. They have pointed out the Contracting regulation aspect as a contradiction of the Nigerian constitution’s enshrined dictates on the freedom of businesses to enter into contractual agreements. It’s also noted that APCON, before becoming ARCON, was wholly a private-sector led and lacked authority to tuple the critical part of the law that stems from the fundamental principles of human rights. AISOP list guidelines for advertising contracts between the demand and supply sides of the industry, with dictates of how to create a contract, on how to arrive at the contract; and not only that, on the terms that advertising contracts must contain.

“That is an affront to the principle of freedom of contract and any basic text on law of contract. Business law or commercial transactions that one reads will make it known that contract, essentially is a concept, an arraignment by which two parties or more willingly and voluntarily come together to agree on a business relationship to create value, and there are certain inherent elements.” a legal luminary posited.

For a contract to be valid in Business Law, there must be an offer, there must be an acceptance of that offer and there must be a consideration. A contract is not dictated but negotiated and parties are expected to voluntarily engage.

The key word is voluntarily. With AISOP as it is currently, the demand side, led by ADVAN, has kicked against the guideline, hence proceeding with the rules will be compelling them and hence contractual agreement forthwith will not be voluntarily.

The danger in the above-described situation is that the industry may become plagued and bugged down with a plethora of court cases. This isn’t what we believe, APCON sought to achieve.

Horizontal price-fixing will lead to restrictions of trade, business, stifle industry growth

One of the fundamentals of modern economics and national development is free market. A system where the market independently connects or clear the subjective choices of the demand and supply sides. The aspect of AISOP that fixes prices, for instance pitch fee at between N1 – N2m, is simply an unintended attempt to restrict the development of the industry.  Price-fixing will kill competitive negotiations, encourage corruption and destroy the benefits of strong procurement systems.

One of the projected results of price-fixing is tendency for advertisers to completely boycott the pitch process, because of its financial burden. An aggregate of this will lead to the reduction in the size of business available for the industry.

Bloated advertising cost will contract and not expand the Advertising Industry

Further to fixing the pitch fee (at between N1 – N2m), AISOP also introduced compensation scheme for agencies that participate and lose in a pitch. Going that the advertiser invites three companies to pitch, picks one and pays between N1 – N2m, will now also have to pay between N500,000 – N1.5million to the other two. Therefore, for this sort of transaction described above, the advertiser will have to part with between N2.5million and N5million!

The import of this is that the cost of advertising will become unduly bloated and further shrinks the advertiser’s capacity to keep generating demands. Basic business instinct will force the advert suppliers to reduce the number of agencies involved in pitching. That again drops the opportunities open to the market to learn and expand. The bottom-line result is market contraction that will be devasting to the industry.

Killing competition and innovation

Paying pitch losers some compensation for just participating is not different than the case of a business paying an employee for just showing up to the office. The result is mediocrity and sense of entitlement, which is terrible for business. With regime of this kind, the benchmark for success for the agencies will be mere participation. This is clearly an innovation killer, no own will be wholly enthused to put in their best for pitches if they are limited by time and resources at the time. The advertiser goes on to reward this and the market is gradually drained of its competitive creativity.  An expert’s submission is that “…not working for this profit will make people run out of will to improve on those skills. Rather than improve on competition, rather than innovating to compete, what you see is advert agencies lobbying to get the jobs”.

Dissatisfaction that leads to unending conflicts, destabilize the industry

The power of unity is undermined by AISOP. As wisely summarized in the Bible, “Can two work together unless they agree?”, is the sort of question in the minds of industry watchers and lovers of NIgeria. It is not quite strange that those on the supply side of the industry appear to be attuned to the new rulebook. ADVAN, the only HSG that generate demands, is in strong contention against the wholesome acceptance of AISOP as it were. The refusal of Fadolapo-led administration to dialogue with them is observed to be a basal incline to push an agenda for the supply side, which are in the majority within the council.

More importantly, the haughty approach that sort of undermine the concerns of ADVAN puts the industry on crisis precipitate. APCON was a private-sector led professional body that should be expected to listen to, understand, negotiate, promote and protect the interests of all stakeholders. With what seems now as raping the advertisers to prime the agencies and media houses will lead to unending conflicts and may totally destabilise the industry.

Seeking widom – What is obtainable in the UK

In the United Kingdom, advertising practice is regulated by the Advertising Standards Authority (ASA). It is an independent advertising regulator. The ASA makes sure ads across UK media stick to the advertising rules contained in the Advertising Codes (AC), their version of the new APCON’s Advertising Industry Standards of Practice (AISOP).

In the case of the UK, ASA regulates based on the Advertising Code that is written, maintained and promoted by the Committee of Advertising Practice (CAP). It can be inferred that CAP is their own version of APCON, and their chief activity is consultations and negotiations within the body to write and maintain a code of conduct that becomes binding on all practitioners. ASA can therefore be inferred to be the proposed Advertising Regulation Council of Nigeria (ARCON), which for now is only renaming of APCON, where all structures and systems remain,  but assumes more regulatory authority.

What ASA does (What a new extracted version of APCON, ARCON, should be charged to do)

ASA responds to concerns and complaints from consumers and businesses and take action to ban ads which are misleading, harmful, offensive or irresponsible. As well as responding to complaints, ASA monitor ads to check they’re following the rules. They also conduct research to test public opinion and identify where they need to take action to protect consumers.

ASA has been administering the non-broadcast Advertising Code for over 50 years and the broadcast Advertising Code for over ten. In 2021, it resolved 43,325 complaints relating to 22,115 ads.  As a result of that work, as well as proactive regulatory work, 20,456 ads were either changed or removed.

ASA is independent of government and their regulation comes at no cost to the taxpayer.

ALSO READ: ‘I felt proud’ O2 Academy gets ARCON accreditation, becomes regulatory exam centre

About CAP (what APCON represents at the moment)

CAP members represent the advertising industry, covering advertisers, media owners and agencies. They offer authoritative advice and guidance on how to create campaigns that comply with the rules.

How the system works

Ads in the UK are regulated through a system of ‘self-regulation’ and ‘co-regulation’. In summary, self-regulation means that the ad industry writes the rules (through CAP) that advertisers have to stick to. Non-broadcast advertising, including newspapers, posters, websites, social media, cinema, emails, leaflets, billboard, are covered by self-regulation.

Co-regulation is an arrangement the ASA have with the communications regulator, Ofcom (Known as National Broadcasting Corporation in Nigeria here). Ofcom delegates the responsibility (through a a contract) for a day-to-day basis to regulate TV and radio advertising to ASA. In 2014, Ofcom announced the renewal of its co-regulatory relationship with the ASA for another ten years.

Together with CAP, the ASA works to support the industry to help them get their ads right before they are published, by providing guidance, pre-publication advice and training for the industry.

What happens before an ad is published?

The Advertising Codes require that advertisers hold evidence to prove the claims that they make before they are published or aired. ASA expects all advertisers to follow the rules when creating their ad campaigns.

Pre-clearance for TV and radio advertising: the vast majority of TV and radio ads are pre-cleared before they are broadcast.

Under their licences, broadcasters must take reasonable steps to ensure that the ads they broadcast stick to the UK Code of Broadcast Advertising.

To help them do this, the broadcasters have established and funded two pre-clearance centres:

• Clearcast for television commercials.
• Radiocentre for radio ads.

Non-broadcast advertising

There are many millions of non-broadcast ads published every year in the UK, so it would be impossible to check every one of them before they appear. For example, there are more than 30 million press advertisements and 100 million pieces of direct marketing every year.

However, to help advertisers get their ads right, CAP provides a range of advice, guidance and training, including free pre-publication, Copy Advice service.

ASA also encourage advertisers and anyone with an interest in the rules or who is involved in producing ads to sign up for Insight and Update, CAP’s advice newsletters here, which provide current and timely advice on the latest positions on hundreds of different advertising issues.

Regulation after an advertisement has appeared

Though many steps are taken to ensure ads are in line with the Codes before they are aired or published, consumers have the right to complain about ads they have seen, which they believe to be misleading, harmful or offensive. Then, ASA can act on such complaints.

Sanctions

The Advertising Codes and the ASA’s rulings have universal coverage across the advertising industry. Advertisers cannot opt out of them.

If ASA has adjudged an ad guilty of breaking the advertising rules, then it must be withdrawn or amended. The vast majority of advertisers stick to the ASA’s rulings and they act quickly to amend or withdraw an ad that breaks the codes.

ASA has a range of sanctions to act against the small number of advertisers who are either unwilling or unable to work within the rules and to ensure they are brought in line. In 2013, Trading Standards took over from the Office of Fair Trading as the ASA’s ‘legal backstop’ on the non-broadcast side, to sanction errants. On the broadcast side, Ofcom acts as its ‘legal backstop’ to deal with errant media houses.

Contextualising for Nigeria – The conclusion

We can infer from the above-described activities of ASA–the regulator, that its responsibility only bothers on regulating ads based on an industry-generated Advertising Codes maintained by CAP–the association. It does not bother itself with how advert buyers and suppliers interact or decide to carry on their business relationships. That is handled by the general British Laws. Sanctions are also referred to the right government authorities, Office of Fair Trading – for non-broadcast, Ofcom – for broadcast.

Nigeria seems to love overlapping authorities and absolute power. Most of the contentious parts of AISOP are well taken care of by numerous existing laws being administered by specialised government agencies, task forces, etc. Having to list them as practice codes gives up APCON’s desire to heftify itself. Whereas it is common knowledge that absolute power corrupts absolutely, it is bewirlding that Fadolapo and his executives find power-doulbling motivating enough to start bartering the independence of their organization, beguiling the ministry of information for political stamps with FG by throwing up ARCON.

Freelanews Business Intelligence now sees merits in the allegations that Lai Mohammed may be arming APCON with the needed consitutional impetus to pursue the FG’s agenda to control free speech.

Let us also highlight that ASA does not pre-approve non-broadcast ads! In the UK and other parts of the Western world, the fundamental human rights of freedom of speech and association is the foundation for any law. If any law shirks those rights, it can be dismissive. Hence, ASA wouldn’t strangulate freedom in the cause of regulating ads. You go on and fly, post whatever you wish, the system’s feedback and monitoring mechanism will fish out errant ads (according to the Adversting Codes ), you are contacted to drop or adjust same. Most do and the few that don’t are sanctioned through co-regulation with Ofcom and other government-led regulators for the industry.

AISOP with all its good intentions may lead to unintended consequences as earlier listed, but the major fear is the trend of playing to the government’s gallery in a bid to validate APCON’s authority. This may lead to a situation where APCON more or less, becomes the government’s gagging tool, a smart move to turn the anger away from NBC and other direct government-led regulators.

It is popularly advised that advertising stakeholders in Nigeria will be allowed to take another look at the AISOP regulation and come up with recommendations that are balanced to resolve the contentious clauses contain therein. Though various recommendations were made on payments, no reference was made to ensuring that the agencies fulfil Service Level Agreements (SLAs) and quality service delivery to clients.

Rtn. Victor Ojelabi

Ojelabi, the publisher of Freelanews, is an award winning and professionally trained mass communicator, who writes ruthlessly about pop culture, religion, politics and entertainment.