Crisis brews over N8bn unpaid advertising debt

Written by Princeville Ekvudzhuru

The advertising industry is confused with the debts of N8billion by advertisers and media buying agencies that are blaming interested parties for a weak regulatory environment.

File: dollars

Advertising agencies (advertising agencies) have stated that the huge profile of the debts of clients of client companies creates some operational problems, especially in advertising outside the home, electronic and print media.

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They said that non-payment of debts comes amid promises made last year by all interested parties to solve the problem of advertising debt in brand management and brand business management in Nigeria.

Advertising agencies noted that they are faced with an acute liquidity crisis, largely due to the large amount owed by client companies (advertisers).

A study of companies and markets (C & M) showed that more than N8 billion of unpaid contributions by advertisers, many of which are transnational corporations, are currently facing a smooth course of business operations in media houses and some advertising agencies.

Although agencies and buildings of the media are believed to have fulfilled their part of the contractual agreement by entering into contracts, they now face the task of getting customers to fulfill their part of the contractual agreement by paying for services that have an overpaid agreed grace period of 45 business days for payment.

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The delay in payment she collected was due to the sudden non-observance of the existing payment date within 45 days by multinational companies, which allegedly require 180 days to process invoices before payment.

However, advertisers and media owners condemned this request, saying that it does not correspond to international practice.

A few years ago, APCON intervened in the issue of advertising debt by creating an Ad Hoc Committee on Media Debt (ACOMDI). The committee members were taken from key industry associations, namely ADVAN, AAAN, BON, MIPAN, OAAN and NPAN. Under the chairmanship of Alhaji Ayodele Suleiman, the committee met to review and report on advertising debt in the media for a total of N2 billion. As of 2007.

However, debts have increased over the years in part because of a weak regulatory environment, helped by the absence of the APCON Board of Governors.

The absence of APCON's governing board over the past four years, according to practitioners, has created a huge gap in its ability to fulfill its regulatory duties. It was collected that the practice in Nigeria contrasts with what happens in South Africa, where advertisers have to pay high sanctions and financial penalties for failing to pay.

Practitioners say

Mr. Sola Bambbose, a consultant to a telecommunications company, described a request from multinational citizens for 180 days of grace to settle the media debt as “indecent”. He said that such a request in this modern day and time denies the true spirit of justice and fairness, since some of these companies do not ask consumers of their goods, products and services to arrive and pay for them after 180 days of consumption.

His words: “The request of transnational corporations to extend the 45-day grace to 180 days before paying their media vendors is unreasonable, unfair and unfair. How will they justify this request, when in fact they instantly collect money from consumers of their goods and services?

They ask consumers to come and pay for their goods after 180 days of purchase ”; – he asked.

Speaking in a similar tone, Mr. Cola Ianwale, senior advertising specialist and managing director of the Centerspread Gray group, said that the problem of media debt, which was ageless, now takes on a new look if customers now require 180 days.

He stated that such demand cannot be justified, while companies in their home countries do not do this for the media in their own countries. Nevertheless, he recommended that media owners, advertising agencies and other interested parties unite in addressing the ever-increasing media debt.

Similarly, the Vice-President of the Independent Media Association of Nigeria, MIPAN, Mr. Femi Adeusi, said that he did not yet know about the request for 180 days, but nevertheless condemned the unjustified delay in paying the media, which he attributed to calls to terms of agreements for some enterprises.

He stated that some commercial terms and agreements, jointly agreed with customers, may result in late payments. He said that agencies and media owners should always carefully examine the conditions before they enter into business conditions.

In addition, Adeusi said that any media owner who is hurt with any member of MIPAN should not hesitate to turn to the Association with evidence of their cases, which include the terms of the contract and agreement, as well as proof of work efficiency, as well as their written petition

He also explained the delay in paying for poor performance of work or disagreement or failure in the full and consistent implementation of media contracts. He then directed media owners to be very careful about how they perform and process the work of clients.

STB McCann chairman, Sir Steve Omoyaphor, invited media owners to jointly write petitions to ADVAN in order to get his buy-in and support from an advertiser-advertiser body, requiring members to pay.

In particular, he condemned the idea of ​​a request for 180 days by some multinational corporations, stating that media houses would collapse if care was not taken.

He analyzed the joint efforts of the industry to solve some of these protracted problems, since today the industry is facing many challenges.

For his part, the President of the Outdoor Advertising Association of Nigeria (OAAN), Mr. Babatunde Adedoin, said that the debts owed to its members by advertisers almost justified the work of all extra-corporate companies in Nigeria.

He said: "It appears that multinational companies are deliberately trying to cripple UN operations with a new conversation for 180 days."

After a huge debt, he said that his association sent letters with appeals to some companies and their agencies without any benefit. He acknowledged that ADVAN and relevant stakeholders should help contact advertisers and their media buying agencies.

Similarly, OAAN Vice President Emmanuel Ayufo said: “This year, no payments were made to our members. This affects our cash flow. Practices were not easy. What I cannot say now is the size of the debt of the members of the Association. We are still collecting numbers, but the truth is that it was not easy. "

ADVAN President Ms. Folake Ani-Mamunni said that the association would do everything possible to encourage debtor members to pay, but clarified that the ADVAN Charter does not have control over execution or debt.

“The association seeks to promote heartfelt relationships and business growth among other stakeholders. Some of the claims about the debt and the requests of some advertisers for 180 days are completely new to it, because no one has ever attracted such attention to it, ”Ani-Mumunni said.

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