TEXT OF THE SPEECH BY THE HON. MINISTER OF INFORMATION AND CULTURE, ALHAJI LAI ,MOHAMMED, DURING A COURTESY VISIT BY MEMBERS OF THE ASSOCIATION OF ADVERTISING AGENCIES OF NIGERIA (AAAN)

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1.   Permit to most warmly welcome the members of the Association of Advertising Agencies of Nigeria (AAAN). I am delighted that this courtesy visit finally happened today, despite a lot of scheduling problems.

2.   RESPONSE TO THE PRESENTATION BY AAAN************************************

3.   Let me now touch on an issue that is very close to my heart – How we make advertising work for Nigeria and Nigerians. As you are all aware, the issue of job creation is among the priorities of this Administration. With over 60% of our population under the age of 35 and youth unemployment a challenge, the Creative Industry provides a great opportunity to create meaningful and rewarding jobs for them.

However, this will not be achieved if the major source of revenue for the sector, which is advertising, is performing far below par.

4.   Therefore, we need an objective and scientific Audience Measurement System that articulates the value of the content to consumers as well as the value of the Audience to Advertisers, particularly in the television sector but also in the Outdoor Segment.

Lack of authentic and real data poses a great challenge to the advertising industry. The Nigerian media advertising total industry volume has historically performed below the global average benchmark relative to the country’s GDP, when compared with leading global and African markets (despite Nigeria’s position as a leading African economy).

5   In 2018, Price Water House reports that Nigeria’s total advertising revenue performed very poorly (0.12%), when compared with South Africa (0.83%), Kenya (0.35%), Ghana (0.29%) and even Tanzania (0.18%). This is attributable directly to a lack of Measurement and Currency of trading, a most basic requirement in all developed markets for the success of the Production industry.

6.   The current value of the Nigeria television advertising market is estimated at $200 million, despite a population of about 200 million, which translates to $1 per person,  In Ghana, its $3 per person, in South Africa, its $18 per person and in Kenya $7 per person. If Nigeria only reaches Ghana’s level of spend, this would triple the size of the TV advertising market to $600 million per annum, which is an extra $400 million par annum. And 90% or more of this increase would go directly to the businesses and the talents creating the content.

7.   This challenge has resulted in under-investment in the sector, which is necessary to foster the growth of the industry. The advertising community continues to rely on subjective factors when making decisions on the content they want, as opposed to how many viewers the content truly attracts.

8.   As a consequence, television platforms are subjected to renting out space on their channels to sustain their businesses, while content producers have become increasingly over-reliant on sponsorship which, unfortunately, skews the authenticity of their creative output in favor of a few decision makers, instead of the millions of TV viewers.

9.   The existing model will never enable the Nigeria’s Creative Industry to reach its full potential. It stunts the quality of the content that can be created and also limits the capacity of television platforms to invest in dynamic offerings that consumers will be attracted to.

10.   Also, the value of Nigeria’s Broadcasting Advertising Market is not proportionate to the country’s population, when compared to the top 3 markets in the Sub-Saharan Africa region. Despite having a population more than three times that of South Africa, Nigeria’s Television Advertising Revenue in 2016, US$309 million, was 76% behind that of South Africa (US$1,301 million)

11   By the end of 2020, the gap between South Africa and Nigeria is projected to marginally decline to 72%. Similarly, in the radio sector, the value of Nigeria’s 2016 advertising revenue of US$81 million was 75% behind its peers, South Africa and Kenya, both at US$343 million.

12   In both countries, the value and growth rate of the Broadcasting Advertising Revenue is largely influenced by the availability of a scientific Audience Measurement System that provides confidence to Advertisers in measuring their Return-On-Investment.

13.   It is thus imperative that we urgently put in place an Industry Framework that will ensure that content producers receive their just due for the value of the content they create, as well as provide objective guarantees to the Advertising community on their Return-On-Investment on media placements. This will then have the overall effect of guaranteeing greater spend by the Advertisers, who are all seeking to grow their market share.

14   This Industry Framework can only happen if the Ministry of Information and Culture acts as a catalyst for putting in place a robust Audience Measurement System that is in line with global standards and supports the realization of the immense potential that the Nigerian Creative Industry.

15.   The Federal Government has already taken a critical long-term decision to support the Nigeria Creative Industry by ensuring and funding the inclusion of a middleware that is capable of scientific Audience Measurement on FREETV DTT Set-Top Boxes.

16.   Currently, government  is expected to subsidize Signal Distribution because the Channels cannot pay for the carriage of their channels by the licensed signal distributors, who on their part have invested in equipment and technology for Digital transmission. Things cannot continue like this and the economics of the Channel owners has to change. Government cannot fund television forever, we must create a sustainable ecosystem.

17.   Considering the above, I have resolved to establish a Task Team of industry experts, with best practices related to Audience Measurement Systems, to work on the following THREE objectives:

    A) Identify best practice Audience Measurement System that will support the sustainable growth of the Nigeria Creative and Entertainment Industry;

    B) Recommend a Framework for supporting the sustainability of the Audience Measurement System, independent of the Federal Government;

    C) Recommend a Payment and Disbursement Framework among the key stakeholders in the industry, that is; Broadcasting Organizations of Nigeria (BON), Media Independent Practitioners Association of Nigeria (MiPAN) and Advertisers Association of Nigeria (ADVAN), that will ensure that system is transparent and rewarding.

18.   Members of the Task Team are Alhaji Garba Bello Kankarofi, Mr. Obi Asika, Hajia Sa’aa Ibrahim, Mr. Mahmoud Ali Balogun, Mrs Pauline Ehusani, Mr. Joe Mutah and a Representative of Association of Advertising Agencies of Nigeria. The Task Team will be inaugurated at a date to be announced

19.  Bringing the Nigerian TV advertisement market up to par could result in additional $400 million of revenue to the industry, based on current comparisons with other African countries. This is our next task and we invite all well meaning practitioners of this industry to join hands with us to achieve this.