Ad men ponder effects of region's unrest

A mood of anxiety pervades the industry but there is also some optimism for the longer term. 'The sheer amount of turbulence and change will create unprecedented amounts of opportunities,' says one of the key executives interviewed

Elie Khouri, the chief executive officer of Omnicom Media Group in the Mena region.

Given the near standstill in those advertising markets now beset by turmoil in the region, a mood of anxiety pervades the industry across the Mena region. The National asks key executives what impact the unrest has had, and how it will shape debate at the Dubai International Advertising Festival, which starts today.

How have the uprisings in the Arab world impacted the advertising industry?

Tarek Miknas, the chief executive of FP7 Group for the Mena region:I think you can sum it up in one simple word - anxiety. Nobody knows how this is all going to play out. So though there's some optimism about the long term, there's a lot of anxiety about the short-term economic effects. And in some specific markets like Egypt and Bahrain, there's obviously been a significant slowdown of economic activity in the first quarter. And overall, it sure doesn't feel like the return to growth in the region that we were all expecting this year is … going to be felt before mid-2012.

Reda Raad, the chief operating officer for Mena at TBWARAAD: Just as we were seeing the light at the end of the tunnel following the [financial] crisis, we find ourselves now in a completely different challenge involving political instability and the creation of democratic fever that is out of our control. But if we take the flip side, the sheer amount of turbulence and change will create unprecedented amounts of opportunity and more empowerment to the democratic process, which we hope to be good for business and ultimately the industry.

Tarek Daouk, the chief innovation and integration officer at Starcom MediaVest Group for Mena:It will have a structural impact in how people interact with media. It will have a significant change in people's habits. What's going on now is somehow the end of the authority of any government-backed media. The impact of these revolutions will see people more and more against authority figures. I think the revolutions will accelerate significantly the decline of the readership of newspapers and, to a certain extent, magazines.

Elie Khouri, the chief executive of OMG for Mena:During the recent incidents, naturally viewership of TV channels moved toward more news-related programming.

What is your prediction for the change in advertising spending this year?

Mr Miknas:We expect it to be down on last year. Partly because of the big drop of spend versus forecast in the big Egypt media market across January-March, and partly because of the general anxiety among clients right across the region, and their understandable assumption that the regional turmoil is going to negatively affect consumption in a number of business categories.

Mr Raad:Considering the current situation in Egypt and North Africa, we can anticipate a reduction in ad spend in the vicinity of 10 to 15 per cent. As for the GCC, we assume will see a small increase of 1 to 2 per cent.

Mr Khouri:For the first quarter in Egypt it was very bad - everyone knows that. You're talking about a 50 per cent [drop]. But things are starting to move up again. Things are getting back on track. You're looking at minus 20 per cent in Egypt this year versus last year. [Overall advertising spending is] going to be about the same in Mena this year [compared to 2010]. Egypt's drop has been compensated by a rise in the Gulf.

What are the current trends in the creative industries in this region?

Mr Miknas: I think four key trends are already clear. First, we'll see a lot more happening online and on mobile. If the recent events have proved anything, it's the power of social media and the general digital space. Second, we'll see a lot more activity aiming to drive short-term results. There's still business to be done, and inventory to shift. So you'll see a lot more sales and promotions and special offers. Third, we'll see a lot more edgy work that's closer to the street. Clients will have seen the huge danger of getting out of touch with their customers. And fourth, I'm afraid that we'll see a lot of smaller creative companies under pressure. With so many clients either reducing spend, or delaying planned activity until later in the year, this is going to be a brutal year for cash flow.

Mr Raad: The one that will have the biggest impact on our business this year is the unprecedented level of media fragmentation. Now, our audience wants to pick content at the time they want it, on any platform they choose. The challenge from an advertiser's perspective is much more complex. Everything has to be on demand and now more than ever content is paramount. The big idea needs to work on TV just as much as an iPad app.

What are your expectations for this week's advertising festival and Dubai Lynx awards?

Mr Miknas:My expectations are high. I think the Lynx awards have evolved positively over the years. And the fact that the judges are international, gives this festival great credibility. Looking back to the first Lynx versus the upcoming Lynx, I think the work across the board has evolved with the festival. We have a greater quantity of better work in more diverse categories. And the festival has pushed agencies to better the product, making advertising an industry that is more exciting than ever to be a part of.

Mr Raad: Great creative work should be a collaborative process between agencies and clients. Creativity should be developed as part of an advertising agency's culture. It shouldn't be something that is bought. Keeping all of that in mind, we truly hope that we will have another credible awards ceremony and that we all recognise the importance of this show and how it benefits the growth of our industry. We hope other agencies will play fairly and the big winners on the night, win on real work, and on more than just one client. Our expectations are that when a winning agency rushes on stage to accept an award for a campaign, the only weight they should feel is the heaviness of a well-deserved trophy in their hands.

Mr Khouri:I think social media should be there. E-commerce, or social commerce, measuring and assessing the impact of a brand's presence on the social space versus the traditional space. I would hope they will talk about these things.