How good was 2022 for the ad industry in Lebanon? How would you assess the overall ad business?

2022 was a corrective year in terms of stabilizing the currency. Once most transactions were dollarized the market was able to correct its business dealings, and companies were able to plan, forecast and operate.

Irrespective of the government inaction the private sector was the engine of the economy, and it is this private sector that fought to avoid redundancies, created new opportunities and helped and supported the workforce.

The previous years were years of austerity where most of the agencies cut down on their expenses-- if their business was purely local-- or amplified their off-shore services to their agencies or clients in the GCC regions. This allowed them to improve their revenues in fresh dollars hence able to retain their staffs and achieve improved results versus the past years.

To note that small companies partly left the market or consolidated with other agencies and this reduced competitive edge and somehow regulated the prices of services.

Where does “new business” typically come from today?

The current crisis has incentivized the local production and hence a growing activity was witnessed for local brands either existing or new, versus imported ones.

The advertising as well as all communication cycle followed this trend, and what we see today are ads for local brands and services. Of course, clients faced the same challenges and hence had to go through the same exercise of optimization of spending and tactical action in order to grow their sales.

“The local market is no longer competing for consumers’ love; it is competing for their wallets.”

Many network agencies and even smaller local ones currently service the Arab region from their Beirut offices. Do you think that companies in the Gulf are taking advantage of the low-priced local services? 

The off-shoring activity has been on the mind of multi-national agencies a while ago, and some started it some five years ago, because it made business sense to create a pool of resources in a country that is rich wit talent. The savings were clear for them-- no housing, no travel tickets, not hardship etc.

This became more popular with the collapse of the Lebanese Pound versus the dollar where salaries once paid in fresh dollars dropped as a result of shortage of money available. So, the same talents became even cheaper for the foreign client or agency based outside Lebanon.

The supply market provided many jobs for these talents up until, they started fleeing the country to greener pastures. Low supply means higher prices, so now the market as mentioned earlier started stabilizing around a unified currency, which is the fresh dollar at a relatively higher ceiling.

If like most people claim you believe that creativity isn’t linked to big budgets, then how do you explain this creative rut we have been witnessing in Lebanon for the past few years, with barely a couple of advertising campaigns that have stood apart? 

The local market is no longer competing for consumers’ love; it is competing for their wallets. The local production trend is convinced wrongly that by advertising the availability of a product, it will be enough to win the consumers. This will remain true until competition between brands and products gets stronger. Why would a chocolate brand be creative if it’s the only one on the market?

Creativity is the expression of uniqueness and differentiation, and until we have that, clients will not demand an effort from their agencies and subsequently agencies will be too content in doing the minimum to produce an ad.

The other factor is that most of the creative talent is probably mobilized for the foreign markets where clients are more demanding and the markets a lot more competitive. Hence the creative power is appearing elsewhere.