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Egypt: Advertising and Covid-19

Egypt’s advertising industry has been another casualty of the Covid-19 pandemic

Nesmahar Sayed , Thursday 21 May 2020
Advertising and Covid-19
Empty billboards in Cairo's main roads (photo: Mohamed Mostafa)
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While Ramadan is usually a high season for advertising in Egypt, this year things have been different.

Most billboards on main commuter routes such as the Cairo Ring Road, the 6 October flyover, and Cairo’s Tahrir Square are empty and are not carrying any advertising as Covid-19 and the partial lockdown to halt the spread of the new coronavirus take their toll on the industry.

 “We are facing a very big problem,” said Mohamed Al-Shenawi, manager and partner of Three Angles, an advertising company. Although at the beginning of March all billboards were rented, most contracts were then cancelled after Egypt announced a curfew on 15 March, he said, explaining that contracts allowed cancellation in “compelling circumstances”.

Hisham Lotfi, general supervisor for advertising at Al-Ahram, agreed. He has more than 25 years experience in the field of advertising and said “these are the worst times the advertising market in Egypt has ever seen.”

He said that all advertising campaigns had been halted, especially Ramadan staples such as real estate and tourism. This had been augmented by the fact that advertisements in sports venues had also been affected due to the stoppage of sports activities.

It was not just advertising companies and agencies that were suffering, Lotfi said, pointing out that exhibitions and conferences had also been hit hard.

He remembered that losses during the Gulf War of August 1990 to January 1991 had been high, but they had not been as high as today even though the market then was smaller. “Even in the period following the 25 January Revolution there was tourism in Sharm El-Sheikh and Hurghada and the airport was open. The losses were not as big as today,” Lotfi explained. 

Merihan Al-Kadi, general manager of FCB Cairo, a multinational advertising agency, concurred. “There were many ‘Supporting Egypt’ billboards during and after the 25 January 2011 and 30 June 2013 revolutions,” she said.

Today’s lockdown had affected advertising for luxury products such as automobiles, real estate, mobiles, and electronics products because customers were postponing buying these products at a time of crisis. 

During March and April, her agency had succeeded in persuading clients to shift their campaigns to digital and social media, she said. A 20 per cent discount was also offered to clients during April.

“We shifted from television and billboard ads to social media and created ideas suitable for these while offering discounts,” she said. 

The only companies making a profit and able to afford to advertise today were telecoms and food and beverage companies, she said. However, these were advertising at lower budgets. Television channels were offering payment facilities and running more spots to increase viewing, she said.

For Nourhan Moaz, an advertising creative director, the lockdown had shifted the theme of many advertisements to focus on “staying home”, with telecom companies being able to make the most of this theme.

A report by Egypt-based AdMazad, a data-driven solutions provider for out-of-home (OOH) advertising, showed a 100 per cent increase in empty billboards across the Greater Cairo area in the first week of April 2020, reflecting the reduced spending sentiments of multinationals and large national companies during the pandemic.

AdMazad analysed over 1,900 large billboards across Greater Cairo throughout the months of March and April 2020. 

Although every year OOH advertising expenditure increases during Ramadan; this year the rise was driven exclusively by media companies and TV channels. According to the report, the Ramadan 2020 TV season had seen a decline of 30 per cent compared to last year.

One major broadcast network decided not to use billboards during this time for the first time in five years. Overall, the average OOH campaign size of local TV channels declined 20 per cent, with the overall number of occupied billboards declining to 120. 

The banking sector had not participated in the advertising marathon this Ramadan either, said Rami Nabil, owner of the Al-Negma advertising agency. Nabil, who has been in the advertising industry since the 1980s, said that social media had replaced television and outdoor ads, because of the number of subscribers on social media and the “stay home” phase.

“Social media is a great threat to the advertising industry,” Haitham Erfan, general secretary of the Advertising Division at the Federation of Egyptian Industries, told Al-Ahram Weekly. 

He said that no taxes were collected on social media ads, which meant millions in losses for the government. He added that if this situation continued for another three months, the sector would suffer huge losses and would not easily recover.

According to Al-Kadi, besides above the line (ALT) advertising that includes visual ads published in the press, on TV or on social media, advertising companies had also tried to be innovative with below the line (BLT) ads that include events, press conferences and public-relations activities.

She said gifts had been sent to customers and they had been asked to take photographs while enjoying the gifts and to publish them on social media. The gifts had included colouring books or board games that they could enjoy at home, as well as health and safety kits that included masks, gloves and sanitisers. 

“It is not clear when this crisis will be over, so our main concern is choosing an idea that touches the targeted audience,” Moaz said.

According to Al-Shenawi, advertising agencies have to pay annual licence fees to the state to rent billboards. But these were being viewed less and less because of the curfew hours, especially since they were at their best at night when they were lit up.

The agencies were required to meet their financial obligations, Al-Shenawi complained, despite the loss of revenues. In an attempt to create demand, his company had offered clients discounts to fill billboards with health-awareness messages, he added.

Nabil, Al-Shenawi and Lotfi agreed that the government should support the advertising sector by decreasing licence fees during the Covid-19 pandemic. They hoped the government would understand that this was the worst crisis the industry had experienced and would extend their current licenses to cover part of 2021. 

Chairman of the Advertising Division Ashraf Khairi told the Weekly that it had applied for a reduction in fees. “The advertising companies, especially the outdoor ones, are still paying taxes, salaries and license fees” despite the crisis, he said.  

He said the main concern was to save employment in the sector. “It is a very specialised sector, with more than 25,000 workers in more than 200 companies,” he added. 

Lotfi suggested the establishment of “disaster funds” for workers in the sector. But Erfan believed the solution is in the prime minister’s hands. “Our main demand is to freeze licence fees during this critical phase,” he said.

Al-Kadi had seen a slight improvement in advertising at the beginning of May. “People feel that the Covid-19 situation will last for some time, and the companies think that customers may have new needs. They hope that by June they will see some income, but nothing is sure yet,” she said.

*A version of this article appears in print in the 21 May, 2020 edition of Al-Ahram Weekly under headline: Advertising and Covid-19

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