AISOP will drive innovative practice in Nigeria’s advertising ecosystem – Kehinde Salami
By Ididunni Banjoko
Kehinde Salami, Founder and MD/ CEO of Ideas House, has stressed the need for the Advertising Industry Standards of Practice (AISOP) to be supported by all and sundry, as the reform, he stated, will provide solutions to key issues in Nigeria’s Integrated Marketing Communications (IMC) industry.
Mr. Salami’s position corroborated the crux of presentations made by the event host, Guest Speaker and other distinguished panelists during the 2021 MARKETING EDGE Stakeholders Virtual Quarterly Summit.
The virtual summit, which had the theme, “Nigerian Advertising Industry Reform, To Be or Not to Be?”, featured seasoned marketing communications professionals across all sectoral groups.
Commenting on the theme from an experiential perspective, Mr. Salami said: “With AISOP, everyone knows the key issues and what Advertising Practitioners Council of Nigeria (APCON) is trying to address in the industry. I must commend Dr. Lekan Fadolapo, the APCON Registrar, for coming up with this initiative and pushing it through from an agenda perspective.”
He continued: “Within the marketing communication space, there are typical industry business models which are retainer model and conclusion-based model. For clarification, there are three standard cost of just which are operations cost, manpower cost and profit. For an agency to beg a client for fund is not in the model which makes it strange.
“For experiential operation, you must invest in asset over time. If 20 million naira is given as PO and your typical project cost is about 80%, client pays 10% agency fees and gets 10% for the project which means as an agency you have 20%.
In this 20%, you have to deal with operational cost and manpower cost which is 10% and leaving you with 10% agency fees that the client paid initially for activation.”
He explained that, in the 10% agency fees, you will deal with bank charges which are between 1.6% to 1.7% per month, on a 30-days PO that will be paid after 60 days making 90 days in a circle. “This makes bank charges 4.8% to 5% for three months, while the agency is left with 5% profit.”
For Mr. Salami, this calls for a question of which business survives on 5% profit. “Does any multinational company survive on 5% net income?” he asked. “No business”, he noted, “survives on 5% net income.”
Advising agencies to pay well, the agency boss stated that urged advertising practitioners to train and motivate workers in order to get the best of them.
“Everyone is competing for talent in the same space, but with the way we are practicing, we can’t attract people with talent, left alone motivation, train or retain them, that is why I am saying I really welcome this AISOP.”
On that last crucial part which is continuous investment and capacity building, Mr. Salami said: “Experiential is only profitable at scale which requires substantial investment asset. Investment asset is at 5% net income. I keep saying to marketing directors and agency heads that they can’t play experiential when they are working on 5% net income.”
Mr. Salami appreciated the efforts of Dr. Fadolapo, the APCON Registrar and his team for taking charge. He is optimistic that AISOP will promote fair business practices across all sectoral groups and also among all stakeholders in Nigeria’s IMC industry.
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