Anchor Outdoor Displays
It is our submission that there is no relationship between the amount spent on advertising a product and the actual demand of the product.
Advertising does not stimulate or retard demand, advertising merely informs users of a choice.
The consumption of tobacco advertising is not related to the amount spent on advertising or the actual advertisement.
The proposed ban on cigarette advertising creates a new form of autocratic censorship and it is our belief that this sets a dangerous precedent.
The proposed ban would seriously affect our business.
Due to the importance of tobacco advertising with regards to the outdoor advertising industry, amongst other beneficiaries, we feel that the phase in period of such should be at least five years. (Around 2003)
Muhammad Ismail Omar
Saturday, October 17, 1998
I would like to thank the committee members for granting us the opportunity to express our views and we hope there would be enlightenment on the subject of advertising and the demand for a product.
There is no relationship between the amount spent on advertising and the actual demand for the product.
No advertising agency or media company would guarantee if more money and resources were spent on advertising then sales, either in Rand or product volumes, are going to show a definite increase.
If one considers demand creation via advertising budgets alone, then MTN ought to have a greater market share than Vodacom (FM, Adfocus 29/5/98 Pg. 46)
A common defence to our argument is if advertising does not affect sales why is the tobacco industry so vociferous in its opposition to the Bill. Advertising deals with awareness and choices.
Advertising petrol more aggressively does not lead to person going and buying a car, nor increasing the amount spent by a person buying petrol. The aim of advertising would be to inform, to build up a brand and to reinforce a perception.
If one considers the tobacco Industry and the new products that are launched or advertised, one observes a trend towards lighter and milder choices.
The proposed Bill may put an end to this, as there is no incentive and competition to market lighter products.
The situation merely entrenches the status quo with regard to existing brands
Freedom of Speech
In South Africa we have made exceptional progress regarding the development of human rights. The Constitution and the forthcoming elections are testimony of our country and the government in ensuring that South Africa sets an example to other autocratic regimes that the prospects are better under a democratic government.
Whilst the government has a duty to protect its citizens, the measures taken to protect them has to be effective.
Parliament, by passing this bill sets about a trend that restricts commercial activity.
Whilst previous regimes restricted political activity, it seems that certain forms of commercial activity would be the next target.
There are already rumours that advertising of alcoholic beverages may be the next.
Further down the road we may even see carbonated beverages, fast foods and possibly the content of motor car and related adverts.
The television advert of a person driving a fast car on the roof of a building to display the performance of a tyre may not appeal to some safety enthusiasts.
Where does one draw the line?
Should there be a ban on tobacco advertising, this has to be a worldwide
initiative endorsed and regulated by an international agency such as WHO or the
What stops a tobacco company from sponsoring a South African sporting event with a phenomenal budget to be hosted in Zimbabwe or a country with a favourable perspective towards advertising tobacco products.
One can go further, if the event is to receive extensive media coverage, then the sports arena may be covered with the sponsors trademarks or identification. What would stop the tobacco companies from sponsoring a major team or the Fl Grand Prix outside the borders of South Africa?
Swallows or Chiefs playing Liverpool in Kenya sponsored by Rembrandt or BAT. Are the tobacco sponsors trademarks going to be blacked out on our screens and news readers instructed not to mention the sponsor's name?
Invariably this would affect the Freedom of the Press/Electronic Media as the proposed ban would hurt their cash flows hence their ability to recruit and deliver better media coverage, as advertising subsidizes such.
Beneficiaries of Outdoor Advertising
Amongst the beneficiaries of tobacco advertising are the print and electronic media, the entertainment industry, sporting bodies, events marketing and the small players in the outdoor industry.
Outdoor Advertising has emerged from its shackles in South Africa following a serious re-investigation by many local authorities who had discovered that there is a place for outdoor advertising signs and a beautiful city.
In many instances, billboards had changed the focus from a dull and dreary building or bridge to an exciting and lively message.
Examples of such are Times Square New York, Picadilly Circus in London and Ponte in Gauteng.
The employment opportunities in the outdoor industry are the engineering services. (The people that fabricate the structure).
This is a business on its own. From the concrete bases, the steel, the structural engineers the Crane Company and the subsequent maintenance.
The posting services. Printing of the faces, the flighting and changing of faces and general inspections.
Lastly us, the small contractors.
If one analyses the outdoor industry, the small contractors have been at the forefront of the development of sites.
The proposed Bill would curtail our activities and may see more mergers and consolidations.
This would be against the spirit of free enterprise.
The Rembrandt Group has been a contributor to our progress with their decisions based on business principles placing the interests of their brands as primary.
The State would also be a major loser.
Amongst the recipients of advertising revenue from tobacco advertising are
Spoornet, Airports Company and Intersite.
The rental revenues derived by these parastatals and enterprises are usually a
percentage of the rental charged to the client. This varies from 20 to 50 %.
Tobacco is a major player.
The argument can be raised that other advertisers would be found in the place of tobacco.
Yes, but probably at a much lower rate and this would take some time.
As outdoor contractors, we also deal with numerous small landlords who would suffer similar financial losses.
As a matter of interest about 30% of our revenue accrues to landlords.
A further aspect is that we have entered into lease agreements involving contractual and financial implications.
These are private and state landlords, financial institutions and individuals.
Should the Bill be effective, this places us in a very awkward financial predicament.
The social and medical effects of tobacco are researched and published. In order to reduce the number of people smoking and to prevent people from smoking many methods and angles can be explored.
The best weapon is information.
Considering the asbestos debate. Via information and awareness campaigns through the media, the situation had changed and peoples concern for the use and mining of asbestos has improved.
The mining of asbestos was not banned, nor was the advertising of such restricted.
The awareness of cigarette smoking and its possible effects should be more prominently advertised and published.
A possible suggestion would be over a five to ten year period, a phasing in of an advertising tax whereby advertising agencies handling tobacco advertising would contribute to a fund and this would cover the costs of such a campaign. The funds are to based on a percentage of the amount spent on advertising tobacco related products and should be proportionate to the percentage spent on the various media categories.
An example would be 5 % from each advert placed.
The percentage and exact implementation can be discussed at the appropriate forums.
As a last measure, if the ban is to be effective, it is our submission that the implementation date of such would be around the year 2003. Taking into consideration our contractual obligations, our ability to develop sites and obtain advertisers for existing structures that currently have tobacco advertising.
Once again I wish to thank the honourable members and delegates for the opportunity and the hearing given to us and I hope we see progress on all the various organizations and business lobbies objectives and agendas.