Egypt is one country all advertisers agree can’t be ignored. Growth
is the keyword in the advertising market and across the country’s
economy as a whole.
According to figures from the Pan Arab Research Centre, based in Dubai,
advertising spend grew by 35 per cent last year, an increase felt by all
sectors of the media. Over the past three years, the Egyptian
advertising market has grown by 55 per cent in total. Spend on
newspapers soared by 42 per cent to USdollars 150 million while, in TV,
spend jumped by 29 per cent to USdollars 106 million. TV maintained a 38
per cent market share, while newspapers took 54 per cent of the
On top of this, the country’s economy is currently in a stronger
position than it has been for decades. Growth has increased steadily
from 3.7 per cent in 1991 to 4.7 per cent in 1995 and 5 per cent in
1996. The government predicts growth of 5.3 per cent for 1997.
The recent attack at Luxor, in which 58 foreign tourists were killed,
hit investor confidence as well as tourism and has galvanised the
government into speeding up the pace of privatisation to help reassure
the international community that Egypt is still worthy of outside
The liberalisation of the Egyptian economy and, with it, the extension
of the private sector, has furthered development of the advertising
sector and, as a result, the number of agencies has risen - in both
state and private sectors. Some international agencies have local
affiliates in the country, including Saatchi & Saatchi, Team
International, Young & Rubicam, AMA Leo Burnett, Impact/BBDO, TMI/J.
Walter Thompson and DDB Needham.
Newspapers remain the dominant vehicle for advertising, the biggest
being Al Ahram - which has editions for Europe and the Arab world -
Akhbar Elyom and Al Gomhouria. The Egyptian edition of Al Ahram is
packed with advertisements for electrical goods, mobile phones, banks,
fashion accessories and recruitment, although ads for alcohol, casinos
and the National Lottery are all banned.
Dr Samir Mohamed, marketing director for Al Ahram in London, says the
government’s push towards privatisation will have an enormous effect on
the advertising market. One of its main priorities is the privatisation
of the telecommunications sector. Ericsson, one of the newspaper’s top
brand advertisers, currently promotes mobile phones through the
government but Mohamed expects to see more advertising from competitors
once the sector is opened up and companies launch joint ventures.
Similarly, liberalisation in the car industry and cheap labour has led
to the establishment of foreign car assembly plants in the country - of
which there are currently eight, including BMW, Mercedes-Benz, Honda and
Daewoo. Production also started recently for Rolls-Royce and Jaguar. Al
Ahram has begun publishing eight-page colour supplements with its Friday
edition to help absorb advertising.
Privatisation is sweeping through the tourism industry and an overall
increase in visitors and the growth in personal incomes for the middle
and upper classes has put hotels, seaside villas and leisure complexes
among the top advertisers in newspapers.
While newspapers tend to be the favoured medium for reaching a target
audience with a high average purchasing power - given the high
illiteracy rate and low purchasing power among most of the country’s 61
million people - much of the television advertising is for the mass
market. The top brands on television last year were Ariel, Persil,
Coca-Cola and Pepsi.
Broadcasters say that although they expected to lose up to 50 per cent
of their ad revenue to satellite when it took off in the early 90s, this
has not proved the case. They point out that while the mass population
in the Gulf, particularly Saudi Arabia, enjoys a high purchasing power
and, therefore, access to satellite, this does not apply to Egypt. But
satellite in Egypt still can’t be ignored. Nile Sat is about to be
launched in the next few months and the leading stations - MBC, Future
Satellite, ART and LBC - have been quick to sign up. If advertisers only
use the medium to capture a certain percentage of the huge population,
the target audience is still potentially high. In tandem with the launch
of the Egyptian satellite, a media production city just outside the
centre of Cairo has been under phased construction for the past few
years. This year will see the beginning of construction of a huge studio
complex for television production and filming facilities.
Much of the country’s advertising is dominated by government agencies
owned by the two biggest publishing groups, Al Ahram Advertising Agency
and Al Akhbar Advertising - the source of much complaint by privately
owned agencies. They claim these agencies offer huge discounts to some
Joe Ayache, the managing director of Team International/Y&R in Beirut,
helped set up the Saatchi & Saatchi operation in Egypt in the 80s and is
now based in Beirut with supervisory powers over Team’s operation in
Egypt. ’The public agencies have a lot of power,’ he says. ’There are
certain things the government will turn a blind eye to. The government
charges a 36 per cent tax for all advertising, for example, a cost which
has to be passed on to the client. But the question has to be asked that
if you are a government agency, are you paying the tax?’
Ayache adds that the only way the private sector can compete is on
professionalism and claims private agencies talk the language of the
multinationals that are coming to the market better than the public
agencies, and are better versed in the areas of research, innovation and
media planning. ’When I helped set up Saatchis, the fight was for pure
financial issues but now the issue in Egypt for the private agencies is
creativity. Multinationals want standards they are used to in other
parts of the world,’ he says.
Wael Hussein of Saatchis in Cairo agrees a big problem for private
agencies revolves around discounts. ’On top of the 36 per cent tax on
advertising, there is a further tax for advertising prime slots,’ he
For the future, given the huge potential of the industry, many have come
to rely on the advertising industry being included in the government’s
current privatisation agenda.