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French Version

Times for ad industry discussion looks for sol. (Daily Star)

‘Action on the ground is lowering the market from $100 million to $70 million’
Monitored figures for advertising expenditure in Lebanon by the end of this year are estimated to reach $400 million, but in real terms they will not exceed $70 million.

Where has the money gone?

This question and many other problems hobbling Lebanon’s advertising industry were heatedly debated late Wednesday in a discussion at the Press Club titled “The Future of Advertising in Lebanon.”

The debate, moderated by ArabAd publisher Walid Azzi, included two speakers from pan-Arab advertising agencies, Talal Makdessi, CEO of Team Holding Group (THG) and Roy Haddad, CEO of TMI-JWT. “Action on the ground during the past few years is lowering the market from $100 million a year to $70 million,” said Makdessi.

He was referring to the price war among various media who are trying to undercut each other’s profits. The main issue is the media rate card, the official price for a spot in a media. Most of the time these official figures, which in Lebanon should be $400 million a year, at the end of the day turn out to be a quarter of that amount because the media are offering clients rates below the official ones. This problem is not restricted to Lebanon, a small market with a low per capita expenditure on advertising and economic stagnation. “Toyota sells in Britain 90,000 cars and spends $200 million on advertising,” said Haddad. “In the Arab world, it sells 120,000 cars and spends less than $30 million.”

Ramsay Najjar, president of the Lebanese Syndicate of Advertising Agencies, said international advertising agencies, particularly those operating in the Gulf, are partly to blame for Lebanon’s declining ad revenue. “I was one of the few admen who decided to renounce the temptations of the Gulf and stay in Lebanon,” said Najjar, one of the participants in the debate. “I call for neutralizing the Lebanese advertising market. Don’t treat Lebanon as if it is your second home.”

Najjar said Lebanon’s problems have been compounded by the advent of media buying units (MBUs), a group of advertising agencies who have banded together to find ads for their clients at the lowest price. “First there were two sitting at the advertising table,” said Najjar, referring to the advertising agencies and the regies of media outlets. “Now there is a third player.”

Makdessi and Haddad, who head advertising agencies that are part of an MBU called Mindshare, disagreed.“MBU is a worldwide trend that has come here and will develop,” said Makdessi. “We are appreciated abroad more than in Lebanon and our investments in Lebanon are not rational but emotional.”

Makdessi said MBUs cannot annihilate advertising agencies who should try to be more creative and have the ability to focus on certain clients, more than a big international firm. “The problem is small advertising companies are trying to imitate international companies,” said Makdessi.

He suggested the price war could be easily solved if the Ministry of Finance imposed the value-added tax on billings. He has also suggested that advertising agencies in Lebanon should invest 2-3 percent of their billings to finance research studies that will be used to determine the size, reach, readership or viewership.

Azzi, who conducted an interactive debate in which he conveyed queries and grievances of admen and media people who were not present, raised several problems. He insisted that it was high time solutions are found. Otherwise disaster will hit everyone in this business.

Beirut 17-11-2003
Dania Saadi
The Daily Star

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