Egypt has entered a period of sustained growth, which can only be good news for the country’s communications industry. So why has its creative flair waned?
It has been a rollercoaster few years for Egypt. The Egyptian pound was devalued, advertising spend crashed, and unemployment, inflation and public debt all rose. Yet there are signs that the worst is now over and that the country is once again enjoying a sustained period of growth.
According to the World Bank, the country’s real GDP growth reached 5.6 per cent in June, up from 5.3 per cent the previous year, and unemployment has decreased to 7.5 per cent. There has also been a significant decline in headline inflation, private investment has picked up, and the gas extractives, tourism, wholesale and retail trade, real estate and construction sectors are driving GDP growth.
Such figures are a big improvement on just two years ago, when Egypt was facing its biggest crisis since the 2011 revolution. The economy was beset by political instability, the rate of inflation stood at 32.9 per cent, unemployment was above 12 per cent, and Egypt’s public debt stood at 101 per cent of GDP. No wonder consumer sentiment was low.
“Egypt is retaining its economic health/stability and this will be reflected on our advertising industry. We are getting there but it’s taking time.”-- Sahar El Zoghby, CEO MCN Egypt
The question for the communications industry is whether the improved economic situation is being reflected in advertising spend. According to Zenith it is, with the agency’s forecasts expecting overall adspend to grow by 4.3 per cent in 2019, with TV still dominating. Television accounts for 60.4 per cent of all adspend, according to Zenith, although digital spend is not included in its forecasts. Outdoor accounts for 16.7 per cent and newspapers 11.4 per cent. Digital and social spend now accounts for up to 40 per cent of clients’ communication budgets, according to Sahar El Zoghby, chief executive of MCN Egypt.
“The advertising industry has not yet regained its healthy double-digit growth rate following the recession in the past couple of years and the devaluation of the Egyptian pound,” says Zoghby. “There has been an almost stagnant rate of growth that has been reflected in the minimal increase of TV communication budgets from the real estate industry, the banking industry and telecom operators, the three categories that constituted a majority of the ad industry spend in the last 10 years… 2019 was projected to be a better year than it ended up being, but we remain positive for a better year ahead.”
The industry’s challenges remain significant. There is an absence of independent syndicated industry media research and a sizeable hole where a unified TV currency should be. Confusion still surrounds traditional media, particularly in relation to TV, with numerous changes within the structure of channel ownership. What’s more, media agencies are competing on trading/buying rates rather than on competence and strategic added value.
“It was a very good year for us as an agency. After four years of being in the market, this year has been our peak.”—Ahmed Badie, founder of AB&Partners and CEO ABTBWA
Clutter also remains an issue, especially within the outdoor and digital spaces, while the regularity of pitches is on the rise. “Nothing is long term any more,” says Ahmed Badie, founder of AB&Partners and chief executive of ABTBWA. “Pitches are increasing and sometimes every project is a pitch and invitees on the pitch are often not compatible. You can have an agency invited along with a director and a production house all competing on a creative project. There is a lot confusion going on in this area and it leads to a mess in the end, such as unfinished campaigns or backfiring that harms the brand itself.”
Perhaps the biggest dilemma, however, is a creative one. A traditional centre of creative excellence, Cairo has seen its once famous advertising output reduced to cookie-cutter executions that lack character, humour or originality.
“In all honesty, the ad industry has become somewhat stagnant,” says Mohamed Fouad, executive creative director of J.Walter Thompson Cairo. “It’s not really moving anywhere. It’s just there. A lot of factors have resulted in this outcome but I believe the main factor has got to do with clients’ strong interference with any agency’s creative process – from the idea to the actual execution of the ad. Creative freedom becomes very limited, resulting in where we are today.”
“Egypt is stuck on one medium: television,” adds Fouad. “What’s in today is out tomorrow, however, Egypt is yet to recognise that. There are endless media to work with and apply ideas to but we’re still applying the creative concepts from the perspective of television, which isn’t always the most relevant nowadays, regionally and internationally.”
“In all honesty, the ad industry has become somewhat stagnant. It’s not really moving anywhere. It’s just there.”--Mohamed Fouad, ECD of J.Walter Thompson Cairo
The merger of creative production house Good People with Kijami, Dubai Lynx’s independent agency of the year, was no doubt in part a reaction to this situation. The merger created the largest independent digitally-driven network in the Middle East, with the network operating under the name GP&K. In December the network also revived Elephant, which was originally founded by Ali Ali and Maged Nassar back in 2009 but was shuttered in 2012. During its short life it had become the most awarded creative agency in the region. Elephant will act as the network’s creative nucleus, with all of GP&K’s companies operating independently.
“Clients are increasingly shying away from agencies and looking for alternate offerings,” says Ali, a film director and the co-founder of both Good People and GP&K. “Hence we are bringing back Elephant, the non-agency agency. The counter offer. Out with the old 360 advertising retainer model and in with fresh ideas – brave ideas for a brave new era.”
“I’ve seen very little great work from Egypt this year to be honest,” adds Ali. “One or two Ramadan spots from TNA, but that’s about it. It hasn’t been a great year for Egyptian television. The films are all looking the same. Like bad re-runs of what used to be great ads. Egypt is suffering from a serious lack of creative firepower at the moment. We just got out of the jingle slump we’ve been in for five years now, but I would call this year an all-time low.”
Why so bad?
“The reason is quite clear,” replies Ali. “It seems to have become a rule that each and every creative person with an ounce of talent in him/her has decided to move on to directing. Or at least pursue directing as an end goal, rather than invest in becoming a better creative. So there literally is no one left on the creative landscape. Almost all agencies are headed up by a new breed of young, self-taught creatives that have never really been mentored or been given proper schooling.”
“Clients are increasingly shying away from agencies and looking for alternate offerings.” –Ali Ali, film director and co-founder of Good People and GP&K
Not all believe the situation is bad. In February, TBWARaad entered into a joint venture with the AB Group, establishing TBWA’s presence in Egypt and promising to deliver disruptive thinking through the newly created ABTBWA. “It was a very good year for us as an agency,” says Badie. “After four years of being in the market, this year has been our peak. We are handling the business of big brands and institutions that are key players in the Egyptian market. We released several remarkable campaigns that caused real change of behaviour and raised the curve of awareness to our clients.”
With branded content and social media gaining traction, digital growing, and the Egyptian market embracing user-generated content and mobile, the market is headed in the right direction. “The industry is evolving to catch up with the imperative need of innovative solutions, whether on the content or data, analytics and targeting fronts,” says Zoghby. “Egypt is retaining its economic health/stability and this will be reflected on our advertising industry. We are getting there but it’s taking time.”
“I am optimistic that things will get better for Egypt,” adds Ali. “The economy is getting better and with more money come better ideas, or rather, more relaxed clients that are willing to buy better ideas. Digital is getting bigger and clients are now demanding it. So there is more room for digitally-minded and data-informed work. Data that drives business through good creative thought. But until that happens, we can only be hopeful.”