Turmoil in Egypt Closes Agencies

Lowe, BBDO Among Those Shuttering Offices; Government Stops Transmission of Al Jazeera Network Amid Political Unrest

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NEW YORK (AdAge.com) -- Amid continuing turmoil in Egypt, advertising agencies are closed and the government is cracking down on the widely watched Al Jazeera satellite channel. Until recently, Egypt was a relatively thriving ad market, where PepsiCo Co, Procter & Gamble Co. and Coca-Cola Co. were among the top 10 advertisers.

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"The situation is very bad, scary," said Mounir Harfouche, the Dubai-based CEO of Lowe Middle East and North Africa. "It's a war zone. All of IPG's offices are closed. The offices are fine and the people are OK, but I don't know much more than that. It's difficult to reach people there -- you can try the whole day just to get one SMS through. Even in Syria they stopped the internet a couple of days ago."

BBDO Worldwide's President-CEO Andrew Robertson, who is in the Middle East today, emailed from Dubai, "Until the situation improves, the agency [in Egypt] is shut. It is too difficult for our people to get to and from the office. We are in daily contact with our people, all of whom, thankfully, are safe. Many clients have suspended campaigns. Clients with retail outlets have basically 'shut up shop.'"

Coca-Cola's corporate office in Cairo has been closed for two business days. "[We] will not reopen until security in the city improves," said Kenth Kaerhoeg, a Coca-Cola spokesman. "We are monitoring the situation in Egypt very closely. The safety of our employees is our primary concern, and we are taking all necessary measures to ensure everyone's safety." Coca-Cola has operated in Egypt since 1946. Its system employs 11,000 people in the country, and it has eight bottling plants, one of which is based in Cairo. Mr. Kaerhoeg declined to comment on the status of the bottling plants. In one report of an industry executive getting involved in the street protests, The Wall Street Journal reported Monday that Wael Ghonim, a young Google marketing executive, has been missing since Friday evening, according to his family. Mr. Ghonim had earlier tweeted that he was going to join the Egyptian protests.

To Ad Age readers: If your company has a presence in Egypt, please send us an update so we can continue coverage of the fast-changing situation there.

On Sunday, the Egyptian government stopped transmission of Al Jazeera's Arabic-language service on main satellite Nilesat, and revoked the credentials for Al Jazeera journalists in Egypt. Al Anstey, a Doha, Egypt-based managing director of Al Jazeera's English-language service, said in an interview with Ad Age that on Monday six journalists from Al Jazeera English were detained, and some of their cameras and other equipment were seized.

"They're attempting to prevent us from broadcasting into Egypt and neighboring countries," said Mr. Anstey, explaining that Al Jazeera countered the Nilesat block on its Arabic-language service by switching to other transponders. "We remain resolute and determined. It's important to keep providing balanced, journalistic information into Egypt and the rest of the world."

Egyptian TV channels, subject to government control, aren't broadcasting scenes of military jets flying overhead, or of helicopters "almost buzzing protesters in the square," although Al Jazeera and other international media are, he said.

It's unclear if most viewers are still able to pick up Al Jazeera's Arabic service, but Mr. Anstey said "Audiences are quite smart about working out how to receive channels like Al Jazeera."

He said phone service in Egypt has resumed, but is a bit sporadic, and that internet service, cut off for several days, "is at a pretty rudimentary stage, operating at some places."

Few ads are airing on Al Jazeera. "It's so fast-moving," Mr. Anstey said. "The last 72 hours we've been broadcasting pretty much live from the ground in Egypt. We're breaking into the schedule, and taking over slots for advertising and promos, and replacing programming with rolling coverage."

Lowe's Mr. Harfouche said he doesn't expect a quick end to the current situation. "It's bad for business in general, there's zero stability. No matter what happens, it will take time to get back to normal."

"Egypt is a big market for us -- there are 80 million people there -- and it was going extremely well," he said. "This is a big hit. Advertising and communications is very big there, especially television -- there is a lot of humor. Egyptians are naturally humorous people. Everyone is at home trying to be safe. I don't see it ending anytime soon. People will not be leaving the streets until there is major change."

Egypt's ad market was worth close to $1 billion a year, and media spending grew by about 17% in 2010, according to GroupM forecasts. Adam Smith, GroupM's futures director, said TV and newspapers are the main media, accounting for about 85% of investment, and government and public utilities are among the biggest advertisers.

Pepsi is Egypt's top advertiser, spending almost $50 million on measured media in 2009, according to Ad Age's Top Global Advertisers ranking. The next three top advertisers are telecommunications companies Vodafone ($32.2 million), France Telecom ($30.2 million) and Etisalat ($27.2 million). In addition to Pepsi, there are two more U.S. consumer goods marketers in the top 10: Procter & Gamble is in the No. 5 slot, spending $9.5 million in 2009, and Coca-Cola Co. is No. 8, spending $9.5 million. (Data on advertisers' spending in Egypt was provided by the Pan Arab Research Center).

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Contributing: Natalie Zmuda
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