Media, Marketing Pros Keeping Eye on Middle EastThu, 10 Mar 2011 13:16:02 -0500
When Saudi Arabia's King Abdullah returned to his homeland Feb. 23 after three months of medical treatment in New York, the 87-year-old was greeted by newspaper and outdoor ads welcoming him home.
McDonald's, Isuzu, Boeing and the Saudi British Bank joined hospitals, universities and construction companies in using advertising to celebrate the monarch's return, giving an unexpected boost to the media market.
The health of the Saudi king and the political stability of his kingdom is of global political importance -- not only does Saudi Arabia sit on more than a fifth of the world's oil reserves, the region is a big deal for the media and marketing community.
"If something happens in Saudi Arabia, all bets are off," said Alastair Aird, chairman of MEC in Europe, Africa and the Middle East.
For now, though, the Middle East remains fairly stable in terms of advertising and marketing. The 10.7% growth Group M had predicted for the Middle East and Africa this year (and 16.4% for Pan Arab and the Gulf) is not going to materialize, but single-digit growth is still looking probable.
Mr. Aird, whose clients include Ford, Sony Ericsson and Colgate Palmolive, said media owners are not overly anxious. "It's more that everyone is frustrated because they thought things were picking up after three tough years," he said. "It's a blow, but then again there are almost always problems in the Middle East -- this is nothing new. We've had the property crisis, oil crises, the Gulf Wars. It's a volatile region, and things could escalate rapidly."
Samir Ayoub, CEO of Mindshare's Middle East and North Africa region, whose clients include LG, HSBC and Nissan, said that for the past four or five years, marketers have only ever planned on a quarterly basis, and in this respect nothing has changed. Mr. Aird agreed. "There's no sudden cutting of everything, but there's no real planning for the future, either. Marketers are maintaining a position where they can react quickly if they need to."
The bulk of TV advertising in the Middle East goes to pan-Arab TV channels such as Al Arabiya, Al Jazeera, Rotana Cinema and Dubai TV, which account for 90%-95% of TV spending. As long as Saudi Arabia and Dubai -- where most media is based -- remain stable, unrest in other markets is unlikely to have any impact on TV budgets.
"The fact that the United Arab Emirates is the farthest from all the unrest is good news for the media industry," said Elda Choucair, general manager of PHD Dubai, whose clients include Vodafone, Canon and Arla Foods. "The UAE remains the hub for most multinational clients. In fact, pan-Arab media tends to be the destination for advertising investments when national media are inaccessible. This could play into their hands."
Media consumption is also fairly stable, according to observers, except for the increase in viewing of news channels, but this has little impact on revenue because marketers are always cautious about advertising around news programming, even when times are good.
In Yemen and Bahrain, where there are ongoing uprisings and demonstrations, Mr. Ayoub estimates a 40% to 60% drop in spending. But in North Africa, where events have come to a head in Libya, Egypt and Tunisia, many categories of advertising have come to a complete halt.
With 70% of advertising from local marketers, Egypt has always been a market unto itself, Ms. Choucair said. She said, "Egyptians have different tastes. A show that is a hit elsewhere in the region may not even be shown in Egypt." Most of the national channels have been government-owned for decades, and since the arrest of former information minister Anas al-Fiqqi and former state-TV boss Osama el-Sheikh, everything is up for grabs. Libya and Tunisia are much smaller and less-developed markets, so the fallout from changes there is not expected to have much impact.
"For the last month and a half, there has been either no activity or very limited activity in Egypt," Mr. Ayoub said. "FMCG and telecoms are doing some advertising because they are part of people's daily lives, but for luxury items like cars and banking there is no activity whatsoever. There is a lack of trust in the future and people are keeping their money in their pockets."
Consequently, marketers are ditching brand-building campaigns in favor of short-term strategies. "During the unsettled period it's about moving products off shelves, doing promotions and giving added value," Mr. Ayoub said.
However, marketers across North Africa and the Middle East are still planning for the future. Mr. Ayoub said that he and his clients are preparing for when the situation returns to normal, planning and researching so that they are ready to move as soon as the time is right. Mr. Aird at MEC is having a lot of conversations about using the power of social media -- so compellingly demonstrated in uprisings across the region -- and has significantly increased his network's capability in the field.
In the long term, the whole region looks set to deliver good growth opportunities. "What is happening is dreadful from a political perspective but it might open up markets to more democratic governments and create freer economies," Mr. Aird said. "There will be big opportunities here, but there's one hell of a lot to go through first and it's horrible to see on the news -- especially Libya."
Mr. Aird, Mr. Ayoub and Ms. Choucair agree that the uncertainty across the region will at some point give rise to opportunity. Ms Choucair said, "The silver lining is that monopolies will become free markets, with new channels emerging and more competition bringing in more quality in order to survive," said Ms. Choucair. "It's a chance for entrepreneurs to invest and compete."
http://m.adage.com/article?feedid=642&articleSection=globalnews&articleSectionName=Global+News&articlePage=&articleid=http%3A%2F%2Fadage.com%2Fglobalnews%2Farticle.php%3Farticle_id%3D149317
When Saudi Arabia's King Abdullah returned to his homeland Feb. 23 after three months of medical treatment in New York, the 87-year-old was greeted by newspaper and outdoor ads welcoming him home.
McDonald's, Isuzu, Boeing and the Saudi British Bank joined hospitals, universities and construction companies in using advertising to celebrate the monarch's return, giving an unexpected boost to the media market.
The health of the Saudi king and the political stability of his kingdom is of global political importance -- not only does Saudi Arabia sit on more than a fifth of the world's oil reserves, the region is a big deal for the media and marketing community.
"If something happens in Saudi Arabia, all bets are off," said Alastair Aird, chairman of MEC in Europe, Africa and the Middle East.
For now, though, the Middle East remains fairly stable in terms of advertising and marketing. The 10.7% growth Group M had predicted for the Middle East and Africa this year (and 16.4% for Pan Arab and the Gulf) is not going to materialize, but single-digit growth is still looking probable.
Mr. Aird, whose clients include Ford, Sony Ericsson and Colgate Palmolive, said media owners are not overly anxious. "It's more that everyone is frustrated because they thought things were picking up after three tough years," he said. "It's a blow, but then again there are almost always problems in the Middle East -- this is nothing new. We've had the property crisis, oil crises, the Gulf Wars. It's a volatile region, and things could escalate rapidly."
Samir Ayoub, CEO of Mindshare's Middle East and North Africa region, whose clients include LG, HSBC and Nissan, said that for the past four or five years, marketers have only ever planned on a quarterly basis, and in this respect nothing has changed. Mr. Aird agreed. "There's no sudden cutting of everything, but there's no real planning for the future, either. Marketers are maintaining a position where they can react quickly if they need to."
The bulk of TV advertising in the Middle East goes to pan-Arab TV channels such as Al Arabiya, Al Jazeera, Rotana Cinema and Dubai TV, which account for 90%-95% of TV spending. As long as Saudi Arabia and Dubai -- where most media is based -- remain stable, unrest in other markets is unlikely to have any impact on TV budgets.
"The fact that the United Arab Emirates is the farthest from all the unrest is good news for the media industry," said Elda Choucair, general manager of PHD Dubai, whose clients include Vodafone, Canon and Arla Foods. "The UAE remains the hub for most multinational clients. In fact, pan-Arab media tends to be the destination for advertising investments when national media are inaccessible. This could play into their hands."
Media consumption is also fairly stable, according to observers, except for the increase in viewing of news channels, but this has little impact on revenue because marketers are always cautious about advertising around news programming, even when times are good.
In Yemen and Bahrain, where there are ongoing uprisings and demonstrations, Mr. Ayoub estimates a 40% to 60% drop in spending. But in North Africa, where events have come to a head in Libya, Egypt and Tunisia, many categories of advertising have come to a complete halt.
With 70% of advertising from local marketers, Egypt has always been a market unto itself, Ms. Choucair said. She said, "Egyptians have different tastes. A show that is a hit elsewhere in the region may not even be shown in Egypt." Most of the national channels have been government-owned for decades, and since the arrest of former information minister Anas al-Fiqqi and former state-TV boss Osama el-Sheikh, everything is up for grabs. Libya and Tunisia are much smaller and less-developed markets, so the fallout from changes there is not expected to have much impact.
"For the last month and a half, there has been either no activity or very limited activity in Egypt," Mr. Ayoub said. "FMCG and telecoms are doing some advertising because they are part of people's daily lives, but for luxury items like cars and banking there is no activity whatsoever. There is a lack of trust in the future and people are keeping their money in their pockets."
Consequently, marketers are ditching brand-building campaigns in favor of short-term strategies. "During the unsettled period it's about moving products off shelves, doing promotions and giving added value," Mr. Ayoub said.
However, marketers across North Africa and the Middle East are still planning for the future. Mr. Ayoub said that he and his clients are preparing for when the situation returns to normal, planning and researching so that they are ready to move as soon as the time is right. Mr. Aird at MEC is having a lot of conversations about using the power of social media -- so compellingly demonstrated in uprisings across the region -- and has significantly increased his network's capability in the field.
In the long term, the whole region looks set to deliver good growth opportunities. "What is happening is dreadful from a political perspective but it might open up markets to more democratic governments and create freer economies," Mr. Aird said. "There will be big opportunities here, but there's one hell of a lot to go through first and it's horrible to see on the news -- especially Libya."
Mr. Aird, Mr. Ayoub and Ms. Choucair agree that the uncertainty across the region will at some point give rise to opportunity. Ms Choucair said, "The silver lining is that monopolies will become free markets, with new channels emerging and more competition bringing in more quality in order to survive," said Ms. Choucair. "It's a chance for entrepreneurs to invest and compete."
http://m.adage.com/article?feedid=642&articleSection=globalnews&articleSectionName=Global+News&articlePage=&articleid=http%3A%2F%2Fadage.com%2Fglobalnews%2Farticle.php%3Farticle_id%3D149317
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