Newspapers are gaining traction in Egypt, but Communicate finds that television is still number one for both the marketing industry and the audience

Originally covered in Communicate, April 2010

Dubai Press Club’s Middle East Media Outlook report cites Zenith Optimedia/Value Partners data saying that advertising spend in Egypt is focused on print, with 55 percent of the country’s advertising money going to newspapers. But those on the ground beg to differ.

Television has traditionally been predominant, says Randa Abou, CEO of independent Cairo ad agency Creative Lab. But times are changing. “In the past, 90 percent or 95 percent of the budget would go into television,” she says. “It’s not the case any more. Clients go with the press, with billboards, and radio is becoming very popular now.”

But Karim Nour, corporate officer at TN Holdings, the holding company behind Egyptian advertising behemoth Tarek Nour Communications (TNC), guesses television still accounts for 65 to 70 percent of advertising outlay today.

He admits, though, that monitored spend is often inflated, especially when it comes to the Egyptian government. TNC handles government accounts including its campaign to make people pay their taxes (see “The maestro of Cairo,” Communicate, Jun. 2007). Nour estimates that the government spends $10 million to $15 million each year, and with a media largely owned by the state, this can go a long way. (By comparison, the UK government spent around $300 million in 2009, according to the BBC.)

CONTENT AND CONSUMPTION. Media agency UM’s managing director for Cairo, Dina Hashem, says television is certainly the most consumed media in Egypt, as it is the cheapest source of entertainment in a country with a population just shy of 80 million and a per-capita gross domestic product of only $2,160.

The Middle East Media Outlook says 93 percent of Egyptians watch television, and 43 percent of the country has access to satellite stations. Egypt is a major content producer, unlike most other countries in the Middle East region, and although the government’s Egyptian Radio and Television Union (ERTU) owns all 17 of the country’s terrestrial channels, the quality of their programming has risen with the appointment of a new managing director of Sout Al Qahira, ERTU’s media representative. Walid El Essawey founded the new department and is widely credited with significantly raising the standard of television in the country.

Essawey rebranded two of the broadcaster’s channels, ETV 1 and ETV 2, and lowered their rate cards in an acknowledgment of the growing pressure from satellite television. Coming from the private sector, he also sliced through much of ERTU’s governmental bureaucracy, and eased off the censorship of advertising that government channels previously practiced.

He also improved the content of the government channels, again to compete with satellite. It was Channel Two that had exclusive broadcast rights to the football match that put Egypt out of the World Cup after a 1-0 defeat by arch rivals Algeria. And he programmed some good soap operas during Ramadan.

The increase in sports programming on government channels, as well as the introduction of private satellite channels, allows them to compete with the continuing success of outside broadcasters such as Jeddah-based Arab Radio and Television Network (ART), which helped drive up satellite penetration by carrying coverage of last year’s African Cup of Nations. As well as pushing the bar higher, competing channels with attractive programming can drive up viewership across the board.

Other private stations such as businessman Ahmed Bahgat’s Dream 1 (the Dream network was launched in 2001) and Modern Sports (which is owned by the Deabes family, who are behind Egypt’s educational network of Modern schools and universities) have also moved in to try and tap the lucrative sports market; Modern carries the Egyptian League. With increased competition, the football federation has raised its prices to match.

Another new station is the general entertainment channel Al Hayat, run by businessman Said Badawy, and launched only a couple of years ago. A Nielsen study for the Arab Media Outlook found that 57 percent of respondents listed this channel as their “top” channel – it has the highest approval rating for any channel.

LOST LOYALTY. Content is now becoming key, says Hashem. Viewers are becoming less loyal to channels and are instead following television programs and actors. “You can no longer buy something and then force them to watch it,” she says. For example, last Ramadan, spending was down by around 30 percent – due, in part, to the crisis – but there was a boom in content, with four times as much programming as the year before. “This Ramadan was a big mess for Egypt,” says Hashem. More than 56 Arabic serials were produced for the Ramadan season in Egypt alone. And the cost to stations is going up; last Ramadan, one show was sold to Dream for $3.5 million. It was also sold to Cairocentric and Egyptian TV.

This makes life harder for planners, says Hashem, as media agencies mix art with science to predict and book the most attractive slots. It is also in part responsible for the dwindling numbers of expats in an industry that was dominated until five years ago – as media buying is elsewhere in the Middle East – by Lebanese executives. Media buying units are now hiring Egyptians almost exclusively, says Hashem. “Egyptians know Egyptians.”
Managing director at media agency Starcom MediaVest Karine Barkett, herself Lebanese, says she agrees. She is currently grooming an heir who will one day take over the reigns. Her successor will be Egyptian, she says, but refuses to give a name. (She does reveal, however, that when the time comes, whoever steps into her shoes will have his or her own private elevator as part of the job’s perks.)

Media in Egypt: What’s happening beyond television?

Radio.

The rumor is that Essawey is now turning his hand to reinventing Egypt’s state-run radio stations, Radio Misr and Agahani, starting with revamped rate cards.

Elsewhere on the Egyptian radio scene, Good News Group launched two channels around four years ago: English-language Nile FM, and Nagoom FM, an Arabic-language station. Creative Lab’s managing director, Mohamed Khalifa, calls these stations “the MTV of radios,” saying they offer a refreshing break from the more staid, conservative programming that went before. Good News is run by three brothers: Amr, Adl and Emad El Adib. All were well-known media personalities before they launched their own station. Amr presents the talk show Al Qahira Al Youm on Orbit; Emad also hosts a chat show, Ala Al Halawa; and Adel is the producer behind films such as The Yacoubian Building.

There are also rumors that Rotana is preparing to launch radio stations in Egypt.

Newspapers.

First published in 1876, Al Ahram is the biggest newspaper in Egypt. Whether or not its claimed circulation of more than a million copies daily is accurate, it is a clear leader over the competition. On Friday its circulation rises further still, and so does the page rate: from 218,000 Egyptian pounds ($39,800) to 249,000 Egyptian pounds ($45,400).

Rival publication Al Akhbar has an advertising peak on Saturday, and boasts a daily circulation of 800,000. Both those papers are owned by the government and are regarded as establishment titles.

However, alternatives are emerging. Al Masry Al Youm was launched in 2004, and only has a circulation of 180,000 (according to the Middle East and North Africa Media Guide). However, in The Arab Media Outlook’s survey on readership habits in Egypt (conducted by Nielsen), 34 percent of respondents said they regularly read Al Masry Al Youm. Al Akhbar got 29 percent, and Al Ahram 50 percent.

According to Hashem, space in Al Masry Al Youm is less than half the price of Al Ahram, at 80,000 Egyptian pounds ($14,600) per page. On top of this, it’s not controlled by the Mubarak government and is therefore seen as being more unbiased in its coverage (in a country that rates 143rd out 175 on the Reporters Without Borders’ Press Freedom Index). It also has less clutter. “On Friday, Al Ahram is just ads,” says Hashem.

Internet.

Internet World Stats Web site puts Internet penetration in Egypt at almost 16 percent of the population. The Arab Media Outlook predicts online advertising activity will rise from accounting for 0.7 percent of Egypt’s total ad spend in 2009 to 4 percent in 2013, a compound annual growth rate of 67 percent over five years.

Nonetheless, Internet usage is held back by illiteracy. The CIA World Factbook estimates that only 71 percent of the country is literate. However, the government is trying to get its citizens connected. In 2006 it re-launched its “Computer in Every Home” drive, offering subsidized PCs and low-cost or free Internet access to households that would otherwise have been unable to get online.

The use of digital advertising is growing, say the agency execs Communicate spoke to. Starcom’s Barakat says there is a shift in client perspective to Internet and digital. “Digital is growing,” she says. “The execution is still pretty basic, but in terms of banner advertising I think most of the plans that get out of Starcom have a Facebook and an MSN Arabia on them.”

There is a sizable Egyptian community on both Facebook and MSN Arabia, and clients are starting to move some spend there. This ought to be good news for Connect Ads, a subsidiary of Link Dot Net (which is owned by Orascom Telecom Holding Company, a gargantuan Egyptian telecoms company). Last month Connect Ads announced a contract to be Facebook’s official advertising representative in the MENA region, on top of its status as exclusive media agent for MSN Arabia. “[Advertisers] are not dealing with digital in a consumer-generated way or doing the big ideas,” says Barakat. “But they are at an awareness level, so their brands are there.”

Mobile, however, is doing better than broadband. Egypt has a mobile phone penetration rate of 72 percent, according to the Arab Media Outlook, and marketers have attempted to capitalize on this. In a country where advertising has traditionally been music- and jingle-led, some marketers have started using ring-tones as a selling platform. Soft drinks brands 7-Up and Pepsi have both distributed their advertising jingles as ring tones during Ramadan, says Karim Khouri, managing director of Impact BBDO’s Cairo operations.

Magazines.

Newspaper readership might be huge in Egypt, but magazines are still fairly niche. The Middle East Media Report lists magazines as receiving 6 percent of spend. Karim Khouri says there are a lot of magazines, but they are “quite niche.” “I don’t think they are very effective here,” he says.

Hashem goes as far as to say, “Magazines are a dying medium in Egypt. Dying.” They generally have low circulations and are faced with more than 200 competing titles as well as the Internet. Egypt just isn’t a magazine market.

Monitoring.

Monitoring is an issue that comes up again and again in Egypt. For TV monitoring, TNS provides diary research, where viewers keep a diary of what they watch. PARC and Ipsos both supply computer-aided telephone interview (CATI) data, where subjects are called up and asked about their viewing.

Barakat says CATI tends to work better in the market. “Usually, on a global level, between day-after-recall CATI and a diary, diary is a better measurement,” she says. “But in Egypt specifically, knowing the consumers, I don’t think they will take the time every 15 minutes to fill up a book. So I would rely on a phone call. At least they are being probed, asked and cross-checked.”

But, like elsewhere in the Middle East, the industry acknowledges the flaws of both systems, and is keen to implement people meters, which can give live feedback on viewing habits. Barakat says the industry made steps toward introducing the boxes, and that key agencies were on board, but then the government became involved. “When the Minister of Information interfered, because he said he wanted to take the lead, I formed a committee,” she says.

“We had three meetings and then everyone disappeared.”

Thanks to the low cost of staff in Egypt, agencies working in the country can afford to employ their own monitors. It only costs around $200 per month, says Barakat, to pay a part-timer to drive around Cairo and carry out proprietary measurement. “In every agency we have an outdoor guy who does the monitoring with a camera,” she says. “And we have a guy who looks into magazines and does the clippings and sends them to clients.” In many other countries, this work would be prohibitively expensive for an agency to carry out.

Outdoor.
Because of Egypt’s size, little goes on in the long tail of media planning outside the main cities of Cairo and Alexandria. Even the latter tends to be seen as a remote outpost, and the media industry is focused tightly on the country’s capital.

Much of Cairo’s outdoor is controlled by Pyramid, part of Al Ahram newspaper. General manager Hassan Hamdy tells Communicate his company owns 65 percent of the outdoor in Egypt. It owns the airport concession, the underground concession, and the bus concession in Cairo – a city where nail biting traffic makes public transport all the more attractive. Pyramid has a production house and also owns sporting events. It can therefore sell space on football teams’ stadiums and t-shirts. As if to emphasize the company’s ties to Egyptian football, when Communicate asks for a photograph of Hamdy, his secretary gives us an A5 print, laminated with plastic and strung on a ribbon, to be worn round the neck. Hamdy is also chairman of Cairo football club Al Ahly (a team he played for in his youth) and fans are wont to wear his image when the squad does well.