Advertisers wait to unlock Iraq

Devastated by war, off limits to all but the bravest of outsiders, Iraq is the great untapped market of the Middle East. With a new government sworn in last month, Richard Abbott asks if the country is ready for advertisers to return

  • E-Mail
By  Richard Abbott Published  June 4, 2006

Advertisers wait to unlock Iraq|~|iraq2002.jpg|~|Iraqis browse the country’s media|~|With Saddam Hussein overthrown and a new government sworn in, there is finally a little optimism for the advertising industry in Iraq. With an estimated population of more than 26 million —bigger than Saudi Arabia — it has the potential to be a lucrative avenue for agencies and media owners. But no-one is counting their chickens just yet. Iraq has a long way to go before it can be considered a safe place to do business. There were signs of growth in the early 90s, but the advent of the Gulf War meant that advertising spend was reduced to virtually nothing. When a ceasefire was established, marketers nervously returned amid a tense political atmosphere. But the World Trade Centre attack in 2001 saw campaigns once again delayed or pulled completely. The bloody capture of Saddam Hussein three years ago was yet another twist in the Iraq story, and one that gave the people a new wave of optimism. Multinationals initially came in, but their enthusiasm was tempered by difficulties in setting up and the ongoing security risks. According to a briefing document from the Baghdad-based Centre for Social and Media Studies (CSMS): “The situation in Iraq is very tense, politically, ethnically and socially, and it can deteriorate further if no long-term action is taken immediately.” Today, business in Iraq is done at arm’s length, with none of the major regional agency networks having a direct presence there. Offices in Jordan and Kuwait carry the extra administrative burden, due to their close proximity, with campaign work being carried out at regional hubs such as Dubai, Beirut and Jeddah. Some clients have formed relationships with local businessmen who have agreed to be their ‘man on the ground’ in Iraq, but even this does not compensate for the presence of a dedicated regional marketing department. For anyone looking to do business in Iraq now, security is the number one issue. Companies spend up to a quarter of their total investment on making their office and staff secure. Hassan Jabbari is the managing director of URFM, an Arabic music station that operates from a studio in the UAE and broadcasts in Baghdad and its surrounding areas. His mission, upon launching the station in January 2005, was to give multi-national advertisers access to the ever-expanding Iraqi market. But although the station has been well received by listeners, the advertising sell has not been plain sailing. “The market is fairly depressed, primarily because of the security situation. There are lots of people who want to advertise but they are held back,” he says. “For example, we know all the major car manufacturers want to advertise but it is all on hold.” Jabbari, who was born in Baghdad but spent two decades in the UK, explains with frustration how multinationals know the potential of Iraq but are reluctant to spend money because of the scenes of violence they witness on television. However, with all of the big international brands available on the supermarket shelf, he points out that manufacturers are losing sales by not advertising. “All of their products are here so they should advertise. They should consolidate their brand regardless of the situation. It is our job to find the money from these guys,” he says. “I am trying to remain optimistic. But it all comes down to security. “There are so many black holes all over the place. Once this is controlled, everything will fall into place.” He adds, with defiance: “They will not deter us.” The potential of the Iraqi market is massive. Iraqis have suffered years of repression and have longed for the quality of life enjoyed in their bordering nations.||**||Advertisers wait to unlock Iraq|~|iraqradio200.jpg|~|‘There is no going back. We have a democracy now. Yes, we have a lot of problems but Iraq is now a consumer market. The advertising market has huge potential’ Hamid Alkifaey, chairman of the Centre for Social and Media Studies|~|They are keen to try new products, and the relaxing of trade restrictions means that more goods are coming into the country. Hamid Alkifaey, a journalist and broadcaster who chairs the CSMS, is confident that the market will turn the corner once the police and security services establish control over criminal activities. And he has a more optimistic take on the future: “There is no going back. We have a democracy now. Yes, we have a lot of problems but Iraq is now a consumer market. The advertising market has huge potential.” Nabil Hijazin, managing director of Diyar Outdoor, shares the optimistic outlook, although he admits that 2006 has been disappointing so far because bombings have prevented people from leaving their homes. He also runs Action PR in the region, with two PR officers working from home. But even the apparently simple process of media relations can be fraught with danger in Iraq. “We can’t act as a professional media relations agency in Iraq. We can’t even go around and circulate press releases. It could be dangerous,” he says. But Hijazin insists this is only a short-term state of affairs: “Once the security issue is resolved, people will move very fast,” he says. The huge potential in Iraq can be witnessed in the telecoms market, which has seen massive growth in mobile phone subscriptions. The number of total subscribers to Iraqna Telecom rocketed by 172% in the 12 months to March 2006 to over two million. Iraqna’s success has been influenced by its high profile deal with prominent Iraqi singer Kathem Al Saher, who starred in a TV ad for the company last year. The ad aired on pan-Arab satellite stations, as well as international news channels. The other two mobile phone operators in Iraq are Asiacell, mainly in northern Iraq, and Atheer Telecom. With fierce competition to snap up the thousands of new subscribers, these telecoms companies, as well as mobile phone manufacturers, are among the biggest spenders on advertising in Iraq. One company that definitely has plans to set up an office in Iraq is Wunderman, which won the creative and media business of Iraqna earlier this year after a competitive pitch involving seven other regional agencies. The below the line brief was secured by Wunderman, while its sister agency Team Y&R Beirut was tasked with developing above the line creative, and Mediaedge:cia looks after media. Nassib Boueri, managing director of Wunderman, says he hopes the office will be open by the end of this year. “This is going to be a challenge,” he says. “We know we can serve our clients better if we are there, but it all depends on the current political situation.” On a positive note, he adds: “We want to be part of the restructuring cycle as well. The big business might not be there today but you have to be ready for tomorrow.” One thing that Iraqis are not lacking is good will from the rest of the Middle East. Once security can be assured, clients and agencies alike are keen to help the country get back on its feet through direct investment in offices, local staff and, of course, advertising. Alkifaey says: “For so many years there has been a blockade against the country. Now there is total freedom. Business will increase in the future. “The country is in need of reconstruction so people need to advertise. It is not just one party that is selling to the people anymore. Now different companies manufacture, import and sell.” Hijazin agrees that market conditions are ideal for brands to invest in advertising. “People should advertise in Iraq. The people here are hungry to learn and to find out about what they can buy,” he says. “People were cynical when I started working in Iraq, but the potential is massive here.” Diyar Outdoor employs almost 50 people in Iraq, including sales staff and contractors. All are Iraqi nationals. “Local companies come up to us and ask for our services. We are working together,” says Hijazin. Diyar has enjoyed success in the Iraqi market by giving clients the tools to manage their campaigns from outside the region. By logging in to the Diyar website, customers can use a password to monitor their campaigns, check interactive maps and updated photos of their creative. This kind of campaign feedback is relatively unheard of in Iraq. Print audits and TV people meters are a long way off, and the absence of any kind of regulatory body means that any aspiring advertiser can trespass on public property to post their makeshift billboard sign. The good news is that some local authorities have attempted to establish a relationship with agencies and media owners like Diyar to approve certain sites for advertising. Consumer insight from inside Iraq is sadly lacking too. Data on how consumers spend their time is virtually non-existent because no-one is willing to conduct the research. The major market research companies will be eyeing Iraq just as keenly as clients and agencies. For most people, it is a waiting game. Waiting for conditions to stabilise enough for outsiders to feel safe; waiting for a sign that the country is entering a period of prolonged and sustainable stability. But Hijazin, for one, is not willing to wait forever. “I am not interested in convincing people to advertise in Iraq,” he says. “I am interested in people who have taken the decision to go into Iraq.” While most people accept that Iraq is a market with huge potential, Wunderman’s decision to set up an office there is the exception rather than the rule. Few clients or agencies are brave enough to step across the Iraqi borders yet. The future, on paper, looks bright. But Iraq’s immediate prospects remain bleak. The stand-off is likely to continue.||**||Iraq’s booming media industry|~||~||~|The Iraqi media scene has exploded since the overthrow of Saddam Hussein in 2003, heralding a new era of political and cultural freedom of expression. Newspapers are the media of choice and there is more choice than ever before, with more than 50 titles available. Among the strongest titles are the daily Al-Zaman, which was launched from London in 1997 and prints editions in both Baghdad and Basra. Of the newer titles, Al Manarah and Al Mashriq claim circulations of 20,000 and above. Not all of the new media owners are expected to survive this initial boom, with some unable to secure wide distribution. An inevitable shake-out of the weaker players is expected once the market matures. For now, everyone with the means to produce media is having a go. Hamid Alkifaey, chairman of the Centre for Social and Media Studies in Iraq, says: “The media market will be slimlined. Many of those who entered will go out of business or be taken over by larger groups.” Satellite TV was banned under Saddam Hussein’s regime, but the dawn of the new Iraq has seen dishes and receiver boxes become widely available. For those that can afford it, this has opened up access to information from the wider Arab world, most notably through pan-Arab TV channels such as Al Arabiya and Al Jazeera. The main free-to-air channels are the state-run Al Iraqiya portfolio, which includes two mainstream channels and a sports channel; and the privately owned Al Sharqiya. The Kurdish enclaves in northern Iraq are targeted by Kurdistan TV, which is also run from the north. The number of radio stations is also on the rise, with more than a dozen local and regional stations available over the Iraqi airwaves. New independent radio stations include commercial pop music station Hot FM and the talk radio channel Radio Dijla, which gives Iraqis the opportunity to phone in with their thoughts and opinions. There are also stations in different languages for local ethnic communities. The outdoor market has in the past been dogged by security problems, which have made maintenance and upgrading of sites difficult. Outdoor companies that have their eyes firmly set on Iraq include Diyar Outdoor, which claims to be the biggest operator in Iraq, with more than 500 faces and recent expansions into Karbala and Diwaniya. Pikasso, already a major player in neighbouring Jordan, offers a range of networks featuring unipoles and rooftops in Baghdad and Basra. Iraq has one of the least developed internet markets in the Middle East among the countries surveyed by InternetWorldStats. Just one in every thousand individuals uses the medium.||**||

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code