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Power shift, Part I
The economic downturn may have jolted the region’s media industry, but it is triggering changes that are long overdue, Part I.
September 20, 2009 9:02 by Sam Potter
Similarly while the UAE and Saudi Arabia recorded a downturn in ad revenue (of 6 and 8 percent respectively), other countries made up for this with significant growth. So, how is it that a financial maelstrom can strike and yet revenues can grow?
The agencies. “What is happening is that FMCG (Fast-Moving Consumer Goods) clients, like P&G and Unilever, are constantly on TV,” says Elie Haber, regional MD for global media agency Mindshare. “They came to TV owners and found an opportunity to increase their mileage. So by investing the same dollars they are getting extra value, extra mileage.”
Industry figures corroborate this dramatic shift from real estate and financial services advertising towards FMCG and telecoms. The Pan Arab Research Center says that, year on year, 2009 has so far seen a 64 percent drop in advertising spend from the insurance, real estate and property sector, and a 24 percent fall in money from financial services. Meanwhile, major increases are recorded in categories including communications and public utilities (74 percent), food, beverages and tobacco (58 percent), and toiletries, hygiene and homecare products (37 percent).
On top of this shift, advertisers are now demanding (and receiving) much more for their money. Shadi Kandil, managing director of media agency OMD, says that this lends credence to the three trends he has identified in the new environment.
“Clients want to seek efficiencies, either through pitching, visiting existing contracts or renegotiation with their agencies,” he says. “And with more pressure from clients, media tends to be more consolidated.