It the MENA Cristal Awards from January 31 to February 4, Cairo was on everyone’s mind. Executive spoke to Raja Trad, chief executive officer for Leo Burnett Group MENA to ascertain what the advertising world can expect after 2011’s fiery start.
- What effect will the events in Cairo have on the regional industry?
In 2010 Cairo was definitely the fastest growing market in terms of advertising expenditures, as reported by PARC [Pan Arab Research Center]. Talking about myself as an agency, as Leo Burnett, we witnessed the highest growth in advertising spend in Cairo in 2010. I’d say there was also growth in Saudi Arabia but it was low single- digit growth. We had major growth in the Levant. So 2010 was not as gloomy as people are trying to project and, in my opinion, [for] any advertising agency that was able to secure single digit growth, that was an achievement and we did it.
The problem is you cannot sit and put a strategy in place because you don’t know what is going to happen. Everybody is saying that we will wait until the end of February. By the end of February we will sit and assess the situation and we will decide what are the next steps to be taken.
Honestly, my only concern for Cairo is for the safety of the people. When we had the war in 2006 [in Lebanon], we moved a regional team from Beirut to Cairo — 30 people — in one week. We did not want to interrupt the business. So you cannot sit and put a strategic plan without really having more clarity of what is going on.
- What are your expectations for 2011?
In my opinion the visibility is really bad. Cairo is an important piece of the MENA region. Pre-Cairo [revolution], when we were looking at 2011 we were forecasting growth. What will happen to this growth that we have forecasted? The answer remains to be seen.
Why were we forecasting growth in 2011? Because all of the new business that we brought in 2010 came toward the second half of the year so it will reflect on the full year in 2011. That’s why I was optimistic about 2011. It was single digit growth but it was looking good.
But with what is happening now, I honestly don’t know. If Chicago asks me tomorrow, I will say I cannot give you a forecast. I want to see how things are going to settle down in Egypt because Egypt represents part of this network and a good part of the revenue.
- Most companies in the region have been faced with the challenge of cutting operational costs in the last two years. Have you had to do this as well and how did you do it?
In the [United Arab Emirates] there were some clients who did not reduce their spending, they totally eliminated [it] — some local clients. There was a logical drop, which we understand because at the end of the day it was a reflection of what was happening in the marketplace, but overall, in 80 percent of cases, we did not witness a drop in existing clients. In fact, some clients increased their spending.
In our case we didn’t [need to cut operational costs] because we took a decision at that time: we said we were going to give it three to six months before we make any decision [in May 2009].
We made the decision that we were going to focus on new business; to do new business you need people, so we kept the people and went after new business. I would say that 2009 and 2010 were outstanding in terms of bringing in new business. This not only protected the people we had in the agency but we had to hire in 2010. We hired around 35 to 40 people in 2010, across the region.
“We witnessed the highest growth in advertising spend in Cairo in 2010”
