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Al-Azhar’s online manuscript project delayed	Committee approves bank law amid criticisms
Following a rash of M&As, Kraft bites into Family Nutrition	Local construction, oil firms eye post-war subcontracts
New forex rules inspire fear and loathing	Oil ministry changes export strategy
Petrochems sector nurses dreams of export	State media feels the bite as ad sales plummet

state media feels the bite as ad sales plummet

one of the simplest ways to gauge the overall health of an economy is to look at advertising sales – after all, when company budgets are down, ads are usually among the first costs to be cut. it is therefore not surprising that – given the circumstances in iraq and other, related regional tensions – ad revenue is down across the board, and nowhere more than in the state-run media.

at the beginning of april, hassan hamed, the head of the egyptian radio & television union (ertu), announced that, because of the current situation in iraq, the union was losing more than £e 1 million daily – due both to the added costs of covering the conflict from baghdad and low ad sales.

the economies of the middle east have long been inured to the vagaries of nearby war and strife.
hani kamel, for one, remembers egypt’s 1967 war with israel, during which the newspaper he worked for, akhbar al-youm, the weekend supplement issue of government daily al-akhbar, was whittled down from its usual 20 pages to a mere four.

but while regional conflicts have come and gone, advertisers are saying that the current plunge in sales has been one of the worst downturns the industry has seen in recent memory. “in the last three years, we’ve had problems that we didn’t have in [the gulf war of] ‘91,” said kamel, now general manager of akhbar al-youm. he was referring to lingering fallout from the attacks of september 11, 2001, the devaluation of the currency and, now, the us-led invasion/occupation of nearby iraq.

the multi-pronged nature of the current downturn has left many egyptian publishers mulling the future of the local newspaper business.

kamel lamented that many of his longtime advertisers were currently “rethinking” their media campaigns. such decisions, he estimated, resulted in the newspaper losing 60 to 75 percent of its ad revenue in the last month alone.

his experience is hardly unique. two other of the paper’s state-owned brethren, al-gomhouriya and the egyptian gazette, are reportedly weathering advertisement shortfalls in the neighborhood of 50 percent.

marketers everywhere – from it companies to banks – appear to be, until further notice, in a permanent state of damage control.“they’re afraid of the war, the future and what’s going to happen now in the markets,” kamel said.

the global slowdown in trade since september 11, 2001 – especially between the united states and the middle east – has also dissuaded many would-be advertisers. according to hassan hamdy, general manager of advertising at the publications department of the state-run al-ahram organization and head of the pyramid advertising agency, there is little point for overseas clients to promote products that are now only trickling into the egyptian market.

locally organized boycotts on products originating in the united states and – to a lesser degree – britain have also been taken into consideration by advertisers. some brands closely associated with either country would rather keep low profiles than embark on expensive ad campaigns. “you’re going to get more anti-us and anti-uk sentiment on the street... the same way as during the intifada,” commented general manager of ama leo burnett advertising agency in cairo ramzy abou ezz eddin.

with such considerations already retarding ad sales, the launch of the us-led war on iraq merely served as a coup de grace to the ailing sector. “most multinational clients stopped advertising completely the day the war broke out,” abou ezz eddin added. “they’ve done the same thing in every other market in the middle east – it’s not egypt specifically.”

publishers, meanwhile, are coming to grips with the ad shortfall in different ways.
some advertising consultants, for example, believe that reductions in ad prices are inevitable, especially since advertisers had already been on the defensive even before the actual outbreak of war. “they should consider dropping rates on certain pages,” suggested ahmed taher, managing director of integrated marketing solutions (ims) in cairo.

such advice hasn’t been lost on the publishers of akhbar al-youm, who have been offering 15- to 20-percent discounts on ads since the war began.

al-ahram, on the other hand, didn’t simply slash rates, “because the advertisers need us,” said hamdy confidently. instead, 18 months ago, the paper began offering discounts averaging 20 percent to 25 percent if clients bought large numbers of ad insertions.

despite the long-range planning, al-ahram is suffering along with everyone else, with its number of pages falling from 40 to 22 between october and april, according to ims. ad revenue, meanwhile, fell 18 percent in the last year, hamdy said.

while a contentious, post-war us occupation in iraq will continue to plague the industry in the immediate future, state-run papers – at the end of the day – have little to worry about.
at akhbar al-youm, the sales staff may be losing commissions but, said kamel, the government will always be there to bail the paper out.

fawzia sheikh

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