Lebanon may be the birth-place of the Middle East’s advertising empires but a host of issues hold it back from being a big regional player in terms of what matters at the end of the day: client spend.
In 2010, an estimated $1.22 billion was spent on advertising in Lebanon, according to ZenithOptimedia. This is expected to grow by 5.8 percent to reach $1.3 billion in 2011 and upward to an estimated $1.43 billion in 2013. This growth is consistent with gross domestic product growth estimations but ask industry leaders and they will tell you that the numbers don’t mean much.
As with all regional (and perhaps global) advertising figures, the published numbers only represent those on the surface. They hide the discounts and deals underneath, leaving valuations of the industry in Lebanon unreliable and inflated (see story page 52). Several industry leaders told Executive that the true value of the industry may be as low as $110 million.
Advertising executives confirm that these deals, offers and discounts are commonplace to the market and of no great surprise or detriment to the industry. But Carole Hayek, general manager of Optimedia Lebanon says that this practice is causing a slow erosion of the industry’s integrity and sustainability.
Weakening the foundations
“Once you are used to having a lot of discounts, a lot of offers and packages offered by the media, then the client will feel that he doesn’t really have to put effort behind spending on advertising,” said Hayek.
She continued: “That doesn’t mean that I am pointing at the media for doing this. I understand that they need to reach a certain amount by the end of the year to cover their expenses so they are using a lot of [methods] to achieve their targets. But this should be a little bit more studied because you cannot continue this way.”
Furthermore, Hayek says that these practices common to Lebanon are growing in prevalence in other markets like Saudi Arabia and the United Arab Emirates, where they were formerly less of a problem, demonstrating a ramping up and not a tamping down of the practice. Exacerbating this issue is the lack of direct involvement between the clients and the agencies.
“Unfortunately, most of the clients in Lebanon are not the principals, they are agents — they are distributors so they don’t care about brand building. They only want to make short-term money,” said George Slim, chief operating officer of Lowe Pimo.
Standing out, outdoors
Besides industry culture, the physical environment of Lebanon’s advertising landscape makes for some challenging competition — especially out of doors. The great acknowledged challenge for the industry in today’s media landscape is which “touch point,” or point of contact between a brand and a client, is right for which brand. Outdoor advertising has been, and remains, a large part of that discussion with 10.5 percent of Lebanon’s advertising spend going to outdoor ads.
This may not seem like a large proportion but outdoor is second only to television in terms of media spending. With much lower prices, it represents a greater portion of advertising focus than the numbers would suggest. But the efficacy of outdoor ads is eroding as unmonitored and unregulated areas of the country grow clogged with billboards; agencies and media companies are frustrated with the effort it now takes for a campaign to jump out among the noise.
“Three or four years ago, with 300 faces [individual billboards] you could have a ‘wow’ campaign. Now even with 2,000 faces you are not achieving this affect,” said Hayek.
Solidere is an example of an area where existing regulations are being enforced, but outside of central Beirut any regulations that do exist are surely being ignored; the billboards jostling for drivers attention on the highways of Doura and Dbaye are nothing short of a forest.
This is not seen as a problem by all, so long as spending in this medium continues. “I think there are already some regulations that are not being respected or enforced but this is not holding back the advertising industry. More money is being spent there,” said Nabil Maalouf, managing director of Euro RSCG Beirut.
Perhaps all of these challenges are simply a part of the market’s evolution. Regardless, most agencies Executive spoke with seemed to accept it as the nature of the game. A concentrated effort, then, is the only way to bring about a change of culture. As of yet, no one is stepping forward. Even simple issues of payment seem to be an insurmountable problem to industry players who are generally at the mercy of the clients. “I wish there were laws that prevent clients leaving an agency without paying them. There is no respect for that,” said Slim.
With an energetic industry regionally acclaimed for forward and creative thinking, Lebanon is still leagues behind what it could be. Sadly, this is a familiar refrain. As Maalouf attests, “Lebanon is known to be the land of missed opportunities when it comes to business, to governments, [at] all levels.”
