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MAY 2013 | Cover Story

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Cover Story | MAY 2013

Sham advertising
Of all the challenges the Syrian ad industry now faces, its biggest has little to do with the crisis
by Vanessa Khalil

f our queries into the state of Syrias ad industry amid bloodbaths bordered absurdity, they were surprisingly met by calm and collected industry professionals, who have, in a now set behavioral pattern across the turbulent Levant region, adapted to a status quo that is all but new: two-and-a-half years of civil strife standstill with no near end in sight except, possibly, Syrias. Amer Aidi, founder and managing partner of The Agency Group, Publicis Graphics strategic partner in Syria, is currently residing and setting up shop in the UAE, occasionally meeting with his Syria team in Beirut. However, despite the fact that, according to him, more than 70 percent of the countrys small-to-medium-sized agencies have either shut down, or transformed the nature of their business, he also says that bulkier operations with regional reach are managing to keep minimal presence in Syria, if only in solidarity with a market that had fostered their growth. A big part in staying there has to do with loyalty; another with commitments and obligations towards multinational clients that are still in Syria. International agencies are more profit- and loss-sensitive than local, adds Hussein Jabri, owner and managing director of Syrian communication group Al Athar. Human recourses. Rami Omran, founder and CEO of MCN Syria, is a sensitive man, but not when it comes to profits and losses. Omran had

just learned his Syria team had won an Emerald Production Cristal for Saudi Arabias Vestel Stars campaign when he spoke to Communicate Levant in February 2013; he was proud his Syrian operation still employed 20 people, although it was not filling vacancies of those who left or relocated elsewhere in the region. The influential stakeholders in Syria are not here anymore. Our employees still wake up and go to work; sometimes it takes them three hours, sometimes they can hear the conflict outside, sometimes we dont have electricity, and they are still delivering. Id be very ashamed [in front of them] if I were not positive, he said. In fact, multinationals operating in Syria are not jumping ship as quickly as expected, even though Susan Bazzi, media manager at JWT Damascus, says some already have. Intermarkets recently shut down its modest operation in Syria, while Impact BBDOs Syrian affiliate Y2AD, is keeping its own on life support, employing two people and focusing on opening an office in Erbil. For the least part, Bazzi is deeply thankful that JWTs Damascus office (which now employs 50 percent of the staff it used to before the crisis, assigning some employees to the agencys regional operations) is relatively distant from heat points, even though its working time was reduced by two hours. But we are instructed whenever nearby conflicts are occurring to immediately evacuate the office. Its fine so far, she assures.

Amer Aidi. Founder and managing partner, The Agency Group

Hussein Jabri. Owner and managing director, Syrian communication group Al Athar

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never let me down? Loyalty is one of the main reasons why regional networks keep operating in Syria While some multinationals like JWT Damascus are largely surviving off of servicing their regional networks, the prospect of Syrias crisis outlasting their survival had other agencies in the country look for greener pastures, while keeping Damascus as their hub. We set up two small operations, one in Dubai and one in Doha, four to five months into the conflict. I dont want to sound like I have a crystal ball, but my intuition did tell me that the situation was going to get worse, explains Aidi, although his ball wouldnt go as far as advising his clients on their own expansion outside of Syria, something both Omran and Jabri say they have been doing. We just won Mehanna previously Diwan El Mehanna the largest catering and sweets manufacturing brand in Syria. It used to be Leo Burnetts [client], and we just did their rebranding, brand architecture, and even shop concept. Now they are expanding into Dubai, so we are taking care of that expansion too, explains Omran, while Jabri says hes helped take PVC manufacturer Maysore Plast and home appliances distributor Beko to Nigeria, and property developer Ammoury to Egypt. We had planned for expansion since 2005; we opened the Lagos office at the beginning of 2012, Egypt mid-2012 and the Jordan office now. It wasnt an overnight decision, but now is as good a time as any, he adds. Emergency exits. This expansion could, in fact, have little to do with visionary strategizing, and more with Syrias clients and agencies resorting to natural markets in times of crisis, namely Jordan, Turkey, Egypt and, to some extent, Lebanon, says Jabri. Sadly, Syrias situation is too reminiscent of the 1975 Lebanese civil war, when admen set up shop in Bahrain and Kuwaits emerging markets, and kept Beirut as a hub. At that time, inflation, price-distorting market entries and exits, the devaluation of the Lebanese lira, and corruption had driven not only market players, but consumers with low purchasing power out of the market. Almost 40 years later, Syria finds itself in the same paralyzing position as different or similar as the geopolitics may be. As Syrias Central Bank governor struggles to maintain the Syrian pounds exchange rate against the US dollar, consumers are hastily swapping their local money for foreign currency, weakening their purchasing power against the markets overinflated prices. Worse still, Jabri says the difficulty of transporting goods on grounds more easily accessible to unregulated grey markets is driving legit businesses out of Syria aside from those that were burned down or vandalized beyond recovery. Omran likes to say hes lost the billings, not the 60 clients 10 percent of which are active. However, one of his biggest, dairy manufacturers, Candia, has suffered losses beyond recoup as its factory and farm are located in what became one of the hottest battlefields in Syria. The two cities of Damascus and Aleppo represent a big share of total consumption of Syrian FMCGs in particular; the fact that Aleppo is in trouble drove 25 percent of the FMCG market out of

2012 ADVERTISING EXPENDITURE ALL MARKETS-ALL MEDIA (source: ipsos) Country PAN ARAB EGYPT UAE KSA LEBANON KUWAIT IRAQ PAN ASIAN QATAR JORDAN OMAN BAHRAIN SYRIA TOTAL Amount in $ million 7,870.50 7,228.8 1,848.0 1,567.7 1,236.40 971.0 413.7 365.7 326.9 301.7 268.0 195.5 15.0 22,609.0 Amount in % 35 32 8 7 6 4 2 2 1 1 1 1 0 100

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the country, he explains. Indeed, at the end of 2011 saw market exits by big international and local players, like Bel Group, household and industry detergents Shaer Chemical Group, and sugar and confectionary product manufacturer Akrami.Byblos Bank, for which we recently worked on a regional campaign, reduced its ad spend, but has not fully sut down [] Cars are out. Property developers are too, but they will need to advertise again once the infrastructure is rebuilt, says Bazzi. Consequently, Jabri says that Syrian investors and business owners have changed priorities to transporting goods, providing electricity and power to the factories, laborers commuting from and to work, stopping production lines in spite of the high demand. And, naturally enough, advertising is the least of their worries. Bleeding money. No wonder, then, that very few clients remain to serve in Syria, with even less money to wonder, then, that remain very few clients left to serve in Syria, and even less money to go around a chaotic media scene. Tight-lipped authorities have made accurate stats for media in Syria quite rare, says Aidi, and monitoring the progress of the industry, or the opposite, is difficult. Still, its not hard to wild guess on current

media spend in Syria: close to zero. Media spend has dropped approximately 97 percent since the crisis started, for the whole industry, estimated Omran, while Bazzi, taking into account spend on radio and outdoor which Ipsos leaves out in addition to some press titles prays media spend will have reached, in 2012, five percent of what it had in 2010, on the net rate card. The Ipsos number is close to 18 percent on the gross rate card, she says. UG, Syrias largest media group which owns Concord, one of the only two outdoor players aside from Group Plus, and represents titles like Gala reported in its 2011 fiscal results a loss of SYP45 billion, and a 63 percent drop in revenues for the first half of 2012. Meanwhile, regional outdoor supplier Group Plus and Syrias biggest (operating under the name of Kawalyss), covering over 2,000 panels across 15 highways in Damascus, its airport and the coastal area, and the only player to offer unipoles, 4x3 panels, and LED screens, is currently running either no or old campaigns, mostly for FMCGs, and mainly in high concentration stable areas. The group has laid off a big chunk of its 25 managerial and 100 on-the-road employees, and Amanda Hajjar, marketing manager at Group Plus, estimates that the drop in spend on its outdoor network is no less than 75 percent. The running costs of the panels are not significant. We cant take too

Amanda Hajjar. Marketing manager, Group Plus

Susan Bazzi. Media manager, JWT Damascus

Sibling rivalry: Why Lebanons advertising industry will still grow at the expense of Syrias For Syrias advertising community, it is not the current state of affairs that pours salt on wounds; its the potential the industry held before the crisis. It was evolving in an amazing way, to the point that we introduced LEDs in 2008, says Amanda Hajjar, marketing manager at outdoor supplier Group Plus, which has been operating in Syria since 1996. Saad El Zein, now CEO at The Network communication group, recalls scouting for outdoor locations in Syria with the Group Plus team in early 1995, when he was setting up Al Sham Leo Burnett, at the request of Philip Morris. He later came back with Publicis Graphics which now works in affiliation with The Agency local group that established its local operation in 1998 at the request of Nestle. It took other agencies some time after to set up shop in Syria, as many had focused on expanding their reach to the GCC after the civil war, at a time when Bahrain was a financial hub, Saudi Arabia was highly penetrated by international brands, and the UAE was emerging. Although Syria should have been a natural extension, its closed economy evident in Syrias previous policy forbidding foreign banks to open in the country and the governments tight grip on the media sector, had discouraged Lebanese admen. Instead, many serviced the Syrian market from Lebanon up until the late 2000s; and strangely, some served it in Lebanon. Banks catered to Syria from the Bekaa region, because most Syrians would come to Zahleh to do their transactions. Even for Philip Morris, our key advertising area was the Bekaa and [Lebanons] northern area, at the border points, where Syrians cross from and to Lebanon. According to our data at the time, 1 to 1.2 million Syrians were working in Lebanon, explains El Zein. But as Syrias economy opened up to outside markets, multinationals felt a wind of change. Foreign banks could hold the first 49 percent, and then 60 percent ownership of local banks, car and electronics distributors entered the market whereas previously, the automotive industry was non-existent, and TVs were banned from entering Syria, says Al Zein. By 2010, luxury automotive brand Maserati had launched its showrooms in Syria, while a more scalable development caught the attention of the Wall Street Journal: American-style luxury housing and mixeduse estates are springing up like daisies in this desolate valley set against the hills just a few miles from the capital Damascus, the latest manifestation of a Middle East realestate boom, said the WSJ article. Hussein Jabri, owner and managing director at local Al Athar advertising group, says media growth exploded in 2007 and 2008, while Susan Bazzi, media manager at JWT Damascus, adds that seven private TVs were licensed before the crisis started. But Amer Aidi, founder and managing partner at The Agency, wouldnt say media was exactly blooming, let alone booming. There is a window where it opened up for a few months in 2001, but it quickly shut down. I wouldnt label the medias growth as organic, natural at most, he says, adding that the creative communication is still a nascent concept in Syria. Lebanons cultural references and word plays would never resonate with the Syrian market. It is still very old school, straight-to-the-point there; when you are talking to Syria, you are not talking about high-end areas like Al Malki; you are talking to a huge country and a dispersed population, he explains, comparing Syria to Lebanon where high and lower end areas are either too intertwined or one of the same like in Achrafieh or Verdun and consumers, although from different socioeconomic backgrounds, have a common culture and sense of humor. Whatever the progress Syrias ad industry had made before the crisis, it wont show through for the time being, while it still resonates at least for most Lebanese consumers with director Fawwaz Jabers tawdry 90s TVCs for Notex , Karam Milk and Hindico fans on YouTube. But at least n the humor is there.

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ghost of opportunities past. The wasted potential the Syrian industry held before the crisis pours salt on wounds more than the conflict itself many precautions in these circumstances, she says, commenting on protection against vandalism. However, opinions diverge on which media were hit the hardest. Jabri says that 2011 still saw some media growth because budgets had been decided upon beforehand, but afterward, brands stayed at 10 percent of their budgets, at most. But although he adds that the movement on the ground has made the installation of billboard ads impossible and shifted the remaining budgets toward BTL, magazines and some radio, while clients were bluntly asking to not be associated with pro-regime Syrian TV, Bazzi argues that it is the high production reduction, and impossible door-to-door distribution of print that makes outdoor more specifically secure outdoor, like wall units and rooftops rather than regular networking, and in stable areas the last medium standing, although she agrees some advertisers have restrictions on sanctioned TV stations and press media. Guilt by association. Simply put, if you publish on Syrian media Al-Mayadeen [TV channel], Al-Akhbar [newspaper] you will be considered pro-regime immediately; if you do it on Al Jazeera, Al Shark El Awsat, you are antiregime, says Omran. Its a big country, but its small in the sense that business owners are known and their political tendencies are as well. And everyone knows who owns the outdoor; its kind of a vicious cycle, adds Aidi. Whether supportive of, or against the regime, media outlets in Syria are suffering the same cruel fate. In early 2012, the US treasury has added Syrian state-owned media to its blacklist, while the European Union sanctioned around the same time private media, such as Ad-Dunia TV, and daily newspaper Al-Watan; measures that might have led to the Syrian governments announcement to merge two of its state-owned dailies. In September 2012, Arabsat and Nilesat operators stopped broadcasting Syrian channels, and Hotbird satellites French operator Eutesalat Communications followed suit a month later; in November 2012, Syrias last English-language magazine Syria Today suspended its operations. As a result of the drop in traditional media, Aidi says 60 to 70 percent of his work has shifted to digital, supported by a fully fledged department in programming, designing and content development. Digital, for the time being, should make the only neutral ground for communication, explains Omran, although the social media war waged against President Bashar El Assad, including the dubbed cleansing campaign that featured YouTube videos of Syrians getting rid of El-Assad visual symbols, and muppet webisodes poking fun at him, are all but neutral. If the international media is truly expressing concerns for Syrian freedom of expression, they are certainly not helping, adds Omran. He is referring to sanctions by Facebook prohibiting advertisers from specifying Syrian IPs meaning brands can simply not target Syrian users with an ad campaign even though the Syrian government, in a goodwill gesture, had lifted a five-year Facebook ban in 2011. Even online ranking and monitoring platform Alexa was blocked around a year ago, says Bazzi, and you cannot get data

Saad El Zein. CEO, The Network communication group

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Cover Story | MAY 2013

on Syria, no research to evaluate digital usage in Syria in 2012, while Aidi adds that advertisers also could not benefit from Google products before the crisis. Not to mention that, sanctions aside, Omran warns that if you advertise as a company, it means you have some cash, which means the owner is a good kidnapping target. Damned if you do. Bazzi agrees that some clients faced problems upon advertising on some media channels , and shes put the brakes on some brands out-of-context communication; but not Nestles, which, in a corporate campaign, announced that the FMCG brand was still serving the Syrian market at the same prices after a sizeable part of its factories was burned to the ground; and neither LG Electronics, which has recently released some promotional campaigns, including one for Mothers Day home appliances, and others for HD screens and mobile. It [LG promotion] is more for the high-end market; and it really depends on the area. Damascus wasnt really that affected until late 2011. Even till now, we still do media planning for relat ively stable areas like Damascus, Tartous and Lattakiya, while we are not doing anything for other areas, she explains. Aidi is currently developing a website for an international toys manufacturing company, micro-sites for its brands, and doing tactical and direct marketing work for a pharmaceutical products company, both of which he preferred not to name. Last thing I heard, telcos and financial institutions are the only active players in the market, he says. Whether out of hope they would be the first beneficiaries to Syrias comeback, or sheer faith that the storm will eventually subside, some are defying a practically inevitable decision and still communicating, but never hinting at a problem, Aidi explains: If they [telcos] are promoting special deals its because they are special deals, not because the population is suffering. The first three months into the crisis, a lot of companies I know were forced to advertise to reinforce the idea that nothing was wrong. Omran says its a bit trickier than that, as even FP7 Syrias public awareness campaign on supporting the country not the government was labeled pro-regime. In Egypt, the whole revolution before the toppling of Mubarak lasted for 18 days; a brand could take sides for 18 days, it didnt matter which one it was. In Syria, it [the revolution] has been for almost two years now; even public opinion sides are changing every day. And, frankly, for the majority now, there are no sides, he asserts. Bazzi concurs: At the beginning [of the crisis], one campaign was released to support local products against imported ones, and some local brands sponsored it; but it was too big a crisis for consumers to listen. No point. Jabri says that although some brands were willingly ignoring the crisis, it was a belief

to the point. In Syria, you are talking to a huge country and a dispersed population spread by the Syrian government among the business community that had some investors hold on to the market longer than they should have. Based on this propaganda, the withdrawal from the market came in stages; the international brands were the first to fully retract from the market, and the belief that it would be over soon started changing [at the] beginning [of] 2012. The picture became clearer and more complex, he explains. Try, as he may, El Assad could not succeed in holding the media scene together or the country for that matter despite measures hes taken to appease the activists. In late 2011, Syria issued a law granting more press freedom to journalists, allowing them to protect their sources (when they couldnt before), albeit vaguely restricting them from reporting on news that could escalate tension, threaten national security and unity, and incite hatred and terrorism. A few months later, Syrias National Media Council the result of the law issued in 2011 granted licenses to 16 new publications, but withholding information on their ownership. The media scene is still continuing to report massive losses and budgets keep shrinking, as tension escalates in Syria. El Assads attempts seem to have proved futile. Aidi says that if anything has come out from this very sad and unfortunate reality its that the level of creativity is there. I still believe that we Syrians, Lebanese and Palestinians are highly creative people. It blows my mind to see the satirical slogans and plays Syrians are coming n up with lately.

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