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In the early 1940s, only about 10 agencies were doing business in Israel. Two of those, both owned by German Jews who had fled the Nazis, were in Haifa. The approach of ad agencies then was stiff and conservative; institutional-style ads full of references to the Bible were the norm.

Most of the ads at this time appeared in two daily newspapers, the Hebrew Ha'aretz and the Palestine Post, as the Jerusalem Post was known before Israeli independence in 1948. The other papers of the day carried virtually no ads.

The only other effective ad medium through the 1950s were trailers shown at movie theaters. Israel had no TV station of any kind until 1969, and the state-run radio monopoly began accepting commercials only in the 1960s. Films, which could be subtitled in a variety of languages, were the major form of entertainment for the immigrants from Middle Eastern countries and displaced persons from Eastern Europe, who flowed into the country after its independence and did not yet understand Hebrew—the national language. (To this day, Israel Radio has special programs in a variety of tongues, from Amharic for Ethiopian immigrants to Russian and Romanian.)

Those years also posed a special challenge for advertising professionals. Some immigrants from less developed nations knew nothing about modern appliances; others, from countries such as the Soviet Union, which lacked a modern economy, had to be taught about bank accounts and insurance policies.

Broadcasting's beginnings

Broadcast advertising began in the 1960s when the Israel Broadcasting Authority opened Reshet Bet (B Network), a popular news and music radio station, to operate alongside the official state station, Kol Yisrael. The country's newspapers initially opposed allowing advertising on radio, arguing that the limited ad budgets in Israel at the time would not be able to support the new medium. But instead of hurting the papers, radio stimulated a major increase in advertising budgets.

Another part of the process of modernization was the founding of the Israeli Advertisers Association in 1961. As its first director, Bronislaw Tau helped the new professional organization shape the industry along Western lines, bringing in expert consultants and teachers from England, Germany and the U.S. In addition, Mr. Tau was instrumental in setting up programs in advertising and communications at Tel Aviv University and the Hebrew University of Jerusalem.

But while some foreigners came as consultants, the big international agencies shied away from Israel. Although the Americans and British did not establish affiliations, their way of doing things slowly began to penetrate the Israeli ad industry. Arieli was the first modern agency, with a Western-style division of labor between account execs and creatives. The Arieli model was followed in the 1980s by a growing number of agencies, but the metamorphosis took a decade to complete.

Israel got its first TV station in 1969, but the government station was built on the model of the early British Broadcasting Corp. and did not carry commercial advertising. TV advertising only came to the country in 1994, with the introduction of Channel 2, Israel's first commercial station—and its only one in the early 21st century. There were, however, several anomalies to the setup: Channel 2's broadcasting week is divided among three franchise holders that run separate "stations"; there is, however, a common news department. Each franchisee gets two broadcasting days each week, and the seventh day, Saturday, rotates among the "stations" each year.

Israel TV, the non-commercial station, can raise revenue with public service spots or institutional sponsorships of programs, much along the lines of the Public Broadcasting Service in the U.S. While multichannel cable TV has served Israel for a decade, no local commercials are permitted. Some local advertisers get around the ban on local ads by advertising on the European MTV station, which is seen in Israel.

Advertising agencies

The advent of commercial TV changed the focus of Israeli advertising and accentuated the gap between the top agencies and all the rest. By the turn of the century, there had emerged a "top five" in the Israeli ad world, each linked to a major world player: Kesher Barel McCann-Erickson; Bauman-Ber-Rivnay, formerly associated with Saatchi & Saatchi; Tamir-Cohen, linked to the J. Walter Thompson Co.; Shalmor-Avnon-Amichay Young & Rubicam; and Gitam/ BBDO. Together these five accounted for 30% to 40% of total ad billings in Israel and most of the major national and international accounts.

But the major ad agencies were not the only ones coming to Israel in the 1990s. Dozens of international chains, from Pizza Hut and McDonald's Corp. to Zara and Tower Records, suddenly found economic promise in the Promised Land. These chains and global franchise operations brought with them marketing demands of their own.

Still, Israeli advertising developed its own special flavor. Around the turn of the 21st century, campaigns featured Mediterranean music (for a dairy product) and full-figured women (for a line of prepared chicken parts) rather than the usual fashionably thin models. References from the Bible are becoming a thing of the past.

Since the early 1990s, all the major multinational agencies have set up operations in Israel, many with equity positions in local agencies. In 2001, total gross income earned by agencies in Israel reached $150.3 million, up 33.4% over the previous year, on billings of $1.19 billion. The top agencies in the country were Kesher-Barel & Associates, Gitam BBBDO, Y&R Israel-SAA, Publicis and Adler, Chomski & Warshavsky.

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