x Abu Dhabi, UAESunday 21 January 2018

Advertising fears spill over

Most advertising firms close their Cairo offices as clients pull ads from Egypt and other Arab markets.

Egyptians monitor developments on an outdoor television. Advertising agencies in Cairo have ceased operations during the civil unrest. Khaled Desouki / AFP
Egyptians monitor developments on an outdoor television. Advertising agencies in Cairo have ceased operations during the civil unrest. Khaled Desouki / AFP

Civil unrest in Egypt has caused a shutdown of the local advertising industry, with some companies pulling advertisements from the entire Arab region because of the protests and violence.

All of the advertising companies contacted by The National have closed their Cairo offices, citing the safety of their staff as the paramount concern.

Their clients are pulling advertising from the Egyptian market and some executives report a "spillover" effect into other Arab countries.

"We have clients that have just … stopped their activities everywhere in the Arab world because of what is happening in Egypt," said Dani Richa, the group president for the Mena region at the advertising agency Impact BBDO.

"You switch on the TV and it's bad news after bad news. And you don't want your brand to be sitting between two pieces of bad news," he added.

Mr Richa said BBDO's offices and those of two sister companies had been closed in Egypt, with 180 staff members asked not to attend work.

"At times like this, you don't think of the business, you think of the people there," he said. "But I have to say, if this thing continues for a week or two, it will really have a huge impact on our industry - not just in Egypt, but region-wide."

Egypt's advertising spending grew 24 per cent last year compared with 2009, according to the Pan Arab Research Center. Many in the media industry had tipped the country to be the best-performing regional market this year.

"We had high hopes for Egypt," said Mr Richa. "From the Mena region it's the largest population. So for many of our clients it was a primary market." Elie Haber, the managing director of the media planning agency Mindshare in the UAE, said the company's Egypt office was closed on Sunday. He said advertisers were "re-evaluating" the market and voiced concern that there could be a "spillover" into other Arab countries.

"Many clients and agencies had factored Egypt in as a growth region for 2011. The latest events have definitely made companies question whether they will be able to achieve their objectives," said Mr Haber.

"There are concerns of course that the spillover into other markets will also have additional impact [on markets] such as Jordan. It is a 'wait and see' time and ensuring safety to our staff is the company's first priority." But some advertising executives said clients had not yet reacted to the events. "None of [our] regional clients reacted to the Egyptian situation so far," said Raja Trad, the chief executive at Leo Burnett Mena. "As for our operation in Cairo the offices are closed pending the situation."

Given the internet blackouts in Egypt, online advertising took an obvious hit.

"During the Egyptian internet blackout, not a single online publisher was able to deliver any campaigns for Egypt," said Isam Bayazidi, the chief executive of the Middle East online advertising network ikoo.

"At this time we are all hoping that situation will stabilise, and the strong growth Egypt had been having will be even higher." Mr Bayazidi said his company had not seen any slowdown in online advertising bookings from other markets.

Several broadcasters and media companies have closed their bureaus and production facilities in Cairo. Mazen Hayek, the group director of PR and commercial at MBC Group, said the satellite TV broadcaster had closed its production facility.

"It's proving to be impossible for employees to commute in or out of Cairo. So far, this hasn't affected our on-screen programme delivery," he said.

Mr Hayek said the bureau of MBC's news channel Al Arabiya remained operational.