How Government Policies Affect Advertising

Introduction

Advertising is a paid form of non-personal marketing communication by an identified sponsor to promote or sell a product, service or idea. The identified sponsors of advertisements are typically businesses or individuals who wish to promote their products or services.

You don’t just start a business in isolation. You need to make people aware of it through some form of promotion. Progress in the business is achieved with increase in customers and patronage. One major means of reaching customers is advertising. When the business is advertised through the mass media and other channels of communication, people get to know about its products and services, and the business is able to run in a competitive environment.

As Jack Trout (2006) stated, “Marketing battles takes place in the mind of a consumer or prospect. That is where you win. That is where you lose.” Drawing from the above view of consumers, marketers today struggle their best to secure acceptability of their products and services in the minds of their target audience using every possible means available to them to remain in business. Marketers from around the world have recognized that the target audience of a certain product is not all alike. They differ in terms of demographics, attitudes, needs, location and social affiliations. The import of this message is that any of the above factors can determine the success or failure of advert message targeted to a particular audience. Most markets are made up of different individual customers, sub-markets or segments. Segmentation and targeting of customers allows the marketer to deliver a product within the target audience needs and wants (Pickton and Broderick, 2005, p. 373).

Advertising is very essential to businesses. It plays an imperative role for both manufacturers and consumers. Advertising is important for the business on the whole as it lets the business gain more customers, thereby increasing business turnaround. Advertising can be achieved using various media like television, newspapers, radio, banners, pamphlets, websites etc. Advertisers have to check the pros and cons of each channel before selecting a particular media.

Advertising plays very essential role in the economy of any nation. It contributes immensely in stimulating economic growth. In a country in which consumer spending determines the future of the economy, advertising motivates people to spend more. By motivating people to buy more products they have been made aware of, advertising promotes both job growth and productivity growth both to help meet increased demand and to enable each consumer to have more to spend.

The fact is that the advertising industry does not exist in isolation. Societal forces also influence advertising. Among those forces are government policies and political issues in the society. They could influence advertising positively or negatively. Advertising professionals and clients exist in the society and when activities in the society affect them, this could have implications on advertising. This article focuses on taking a look at the Nigerian environment with a view to explaining how government policies and political issues could affect advertising and how such influence impacts on economic development of the country.

How Government Policy Influences Advertising

The fight against corruption is a major economic policy in Nigeria. President Buhari’s government is using the Economic and Financial Crimes Commission (EFCC) to go after public and private individuals suspected to have engaged in corrupt activities in the past. This includes celebrities such as entertainers who may have indulged in crime before they became successful. A typical Example is the high-profile singer and song writer Naira Marley. He is accused of financial crimes by the EFCC. Advertisers use celebrities for product endorsement but such celebrities must have a clean record and public acceptance. It will be difficult for serious companies to use Naira Marley for endorsement of their brands in advertising, especially if such companies want favourable relationship with government.  Most advertisers indulge in the use of personalities that enjoy public acceptance and credibility to appear in the adverts and endorse their product, as most believe that it can heighten product identification among consumers, facilitate audience recall, and influence the purchase intentions of consumers. The huge investments of companies in advertising are not without motives, as companies try to outsmart each other with their advertisements in order to obtain a domineering share and win customers’ favour.

In Nigeria, celebrities especially in the fields of sports and entertainment appear regularly in advertisements endorsing various products. Several examples abound such as Austin Okocha’s endorsement of ‘Chi Soya Milk’, Genevieve Nnaji (Lux), Banky W (Etisalat), Dakore Egbuson (Amstel), etc. Norr and Serena (2007) are of the opinion that celebrity endorsement strategy in advertising is a valuable strategy that can reflect the growth of a variety of products ranging from entertainment, sports, food and business, to politics. Byrne and Breen (2003) argue that . . . a celebrity can build, refresh and add new dimensions. What celebrities stand for enhances a brand and they save valuable time in terms of creating the credibility a company has created in order to build its brand by transferring the values to the brand. When consumers see a credible celebrity endorse a product, they think the company must be okay. In fact, research has shown that people are likely to patronize products and services endorsed by celebrities than those that are not (Agrawal and Kamakura, 1995; Dyson and Turco (1998) all cited in Apejoye, 2013). However, if a celebrity is involved in any corruption allegation especially by the EFCC, that celebrity will not be used by credible companies for brand endorsement. This is one major way government policy or economic issue can influence advertising activities.

Advertising and Economic Development

Advertising is a major tool for economic development. According to Arrow, K. & Stiglar, “Advertising is a powerful tool of competition. It provides valuable information about products and services in an efficient and cost-effective manner. In this way, advertising helps the economy to function smoothly—it keeps prices low and facilitates the entry of new products and new firms into the market.”

One could ask the question, what is the economic rationale for the use of advertising in any society? Advertising provides information which reduces consumers’ search costs (time spent looking for products) and reduces disutility (unhappiness or lost value) from picking the wrong products. Advertising performs essential economic role through the following functions: Describing new products and what they do; Alerting consumers to product availability and purchase locations; Showing consumers what to look for on store shelves; Helping them differentiate among competitive choices; Advising them of pricing information and promotional opportunities; and Saving consumers money by encouraging competition that exerts downward pricing pressures, among others. This way, advertising also plays crucial roles role in the business cycle and could further be described as a catalyst to economic development in any nation.

Relationship Between Government Policies and Advertising

To begin with, it is pertinent to note that advertising in Nigeria is regulated by a combination of federal, state laws and subsidiary legislation and guidelines. Different rules apply to different products. The three regulatory agencies are Advertising Practitioners Council of Nigeria (APCON), National Agency for Food and Drug Administration and Control (NAFDAC), and National Broadcasting Commission (NBC). This means that the advertising industry does not operate in isolation. It is always having some form of contact with government policies, laws and actions.

Government policy can be resource that supports market practices directed at achieving superior performance. A government policy is a rule or principle that hopefully better guides decisions, resulting in positive outcomes that enhance the community or unit. They contain the reasons things are to be done in a certain way and why. Government policy could lead to better performance of a company. Advertising agencies in Nigeria are companies in the society and they could also be affected by government policies, whether at state or federal level.

Government policies regulate food marketing and advertising. Such policies that oversee the quality and safety of the food supply, including advertising claims. For instance, the National Agency for Food and Drug Administration and Control (NAFDAC) has the mandate through NAFDAC Act CapN1 LFN 2004 to regulate and control the manufacture, importation, exportation, advertisement, distribution, sale and use of foods, drugs, cosmetics, medical devices, bottled water and chemicals. This body has the responsibility for the regulation and control of advertisement of these products primarily to ensure food safety in the country. They do this by issuing advertisement permits after careful evaluation of the claims made and monitoring of the advertisement to ensure that exposed materials correspond to the approvals given. Through this measure the body prevents deceptive advertising. Authorized advertisements are not legally allowed to be made available to the public through the mass media and other communication channels. This shows a link between government policies and advertising.

Political Issues Influence on Advertising in Nigeria

A typical example of one political issue that can affect advertising in Nigeria is the feud between Governor of Edo State, Godwin Obaseki and National Chairman of All Progressives Congress (APC), Adams Oshiomhole. Oshiomhole who is the immediate past governor of the state had supported Obaseki to succeed him but the two felt out along the line after Obaseki had become governor. The fight deepened even amidst reconciliatory efforts by the party. In relation to advertising and economy of the state, groups loyal to Adams Oshiomhole will not be allowed to place any political advertisement which is not favourable to the state government or governor on any of the state owned media houses, Observer newspaper or Edo Broadcasting Service (radio/television). This will deny the state revenue which it would have made through the advert and this could have effect on the economy.

Another issue is the faceoff between owner of Africa Independent Television (AIT), Raymond Dokpesi, and members of the ruling APC. Dokpesi is a member of Peoples Democratic Party (PDP) and he has had crisis with government is believed to be because of his affiliation with the PDP. His membership of the PDP could affect advert revenue from government agencies and parastals which would prefer other stations either owned by government or private individuals that support the ruling party. Among such media that will benefit from advertisement from government agencies are TVC (Television Continental) and Nation Newspaper both owned by Ahmed Tinubu, one of the leaders of APC. Whereas media organizations which owners support government or the ruling party directly or indirectly would benefit from government adverts, those that are not will not benefit. Economic development could be negatively affected when organizations are denied advert. If such organizations denied advert close due to lack of operating fund, workers will be thrown into the labour market and unemployment is a factor that affects the economy negatively.      

Impact on Economic Development

When political issues or government policies influence advertising, this invariably has a positive or negative effect on the development of the economy. Advertising boosts the economy of any nation by making the public aware of existing products and activating the sale of such products. This helps the economy to grow. When a political issue affects advertising negatively, it also affects economic development negatively.

For instance, in Nigeria some state governors have been accused of preventing their rivals from placing campaign billboards on strategic places during election. Some states controlled by a particular political party have also been accused of not letting specific opposition party candidate display billboards in strategic points. When such happens, the advertising agency that is supposed to make profit from the billboards will lose out, and these agencies also pay tax to government. When they do not do business they will not pay tax to government which also a revenue source for the nation’s economy. If the advert agency is forced to close down due to lack of contracts, its workers will be forced back to the labour market and unemployment affects a nation’s economy negatively.

Advertising is a major industry in Nigeria and across the world. It contributes to the economy directly by creating jobs through advertising agencies and other professionals that produce advert messages. It also stimulates demands by providing information about existing products and services, thereby making the economy active, lively, buoyant, and progressive. This way, it impacts on economic development positively. Any political issue or government policy that affects advertising negatively will directly or indirectly affect economic development of Nigeria negatively.

Conclusion

Political issues affect advertising positively or negatively. This invariable has effect on the economy. Advertising industry does not exist in isolation. It is art of the wider society. It also has a mutual relationship with the society. It affects the society in various ways just as the society also influences it. From an economic or business standpoint, advertising has a very positive effect on the society as it stimulates the economy by producing demand for products and services, which strengthens the economy. When government policies or political issues affect advertising, economic development is affected.

References

Apejoye A (2013) Influence of Celebrity Endorsement of Advertisement on Students’ Purchase Intention. Journal of Mass Communication Journalism 3: 152. doi:10.4172/2165-7912.1000152

Arrow, K. & Stiglar, G. (1994). Advertising Tax Coalition, quoted in House Subcommittee on

Select Revenue Measures of the Committee on Ways and Means, Miscellaneous revenue issues: hearings before the Subcommittee on Select Revenue Measures of the Committee on Ways and Means, 103rd Cong., 1st sess., 1994, http://www.archive.org/stream/miscellaneousrev02unit/miscellaneous rev02unit_djvu.txt (accessed January 7, 2020).

 

Byrne, A.W. and Breen, M.S. (2003). The Naked Truth of Celebrity Endorsement. British Food Journal 105: 288-296

 

Norr, A.C and Serena. E. (2007). The Power of Celebrity Endorsement. Tea and Coffee Trade

Journal 4: 179.

 

 

 

 

The Author

Chinenye Nwabueze

Nwabueze is a communication researcher with several years of lecturing experience in Nigerian universities.

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