Connect with us

Communicate Online | Regional Edition | Advertising, marketing, public relations and media in the Arab world and beyond

Pandemic Perspectives: Ravi Rao

Agency

Pandemic Perspectives: Ravi Rao

How Covid-19 is changing the business and the industry at large, according to Group M MENA’s Chief Executive Officer.

How is the Covid-19 crisis reshaping the marketing and advertising industry in MENA?

The time has come to ‘re-optimize’ everything from brand purpose, positioning, company structures, processes and growth strategies. Consumers have become far too picky and selective in what goes into their monthly basket, especially when the supply chain has been affected for several brands – impacting sales for marketeers.  For a few others, it has been a bonanza, at least for this year. For the advertising industry, we see the adex declining between 25% and 35% this year in MENA, with lower than average monthly indices that began in April and continuing until the end of summer.

Significant decline in advertising by small and mid-sized companies and some serious layoffs for the year, are entirely due to the [inability,] to remain afloat in a lockdown situation. Managing cash flow is so critical to face this abrupt storm [that it leads] to stringent cost-cutting measures.

How does this impact differ in the region’s different markets?

Lebanon has had a rough ride, and we see similar trends in Kuwait, Bahrain, Jordan and Iraq. For sure, there is a lull in KSA and the UAE as advertising on print, out of home, cinema and radio have all vanished. Overall, even digital growth has slowed, but because of the shrinking pie, the share seems to have risen. Government spending has definitely dipped on account of the drop in oil prices. Consumer demand is sluggish across markets, including Egypt and the rest of North Africa. Drastic fiscal measures are at play now, which will perhaps lead to a further change in the demographic mix of certain countries.

In MENA, ad revenues for television will fall by 29.5% compared to 2019, [as the medium currently holds] a share of 31%, significantly trailing behind digital this year. The current environment gives search greater opportunity to grow, although from a smaller pot. We forecast growth in search of +11.4% in 2020, accounting for one-third of total digital ad spend by 2021. This is because the appetite for information grows. The “in-person only” experiences have shifted towards live streaming. According to Google Search data for 2020 in the month of April, search for “undecided streaming” has increased by +41%.

What measures have you taken to mitigate this impact (restructuring, staff reductions, etc.)? 

We did re-allocate resources from low-intensity to moderately-sustaining markets and stopped all new recruitments. The emphasis has been more on re-skilling [through ] e-learning and training [programs], with remote working status [still in place,] rather than effecting mass redundancies. Of course, senior management took a voluntary salary sacrifice for three months, without affecting the vast majority of staff during these trying times. We also had the opportunity to properly identify a number of roles and responsibilities that could be carried out by exceptional expertise, having overcome the prior geographical restrictions. This will help with our aim to cluster client groups and markets/functions where possible. So, we are fully optimized for this year.

How could this crisis lead to deeper transformation and change the way you operate in the long-term?

Upgrading systems and ensuring process-oriented operations have become a necessity. We further see that the duplication between creative and media agencies (in certain functions) will vanish, as everyone will look for efficiencies. It’s the same within media agency networks. No ‘unbundling’ yet, but ‘collaboration and partnership’ is the dire need now in our industry.

The adaptive and agile working approach is now more than ever an immediate priority. We are in a fast-moving and extremely dynamic industry. Old working ways are becoming obsolete, and one approach won’t fit all. We are looking into offering multiple modernized working scenarios, that are relevant to this new norm.  While clients are driving digital transformation strategies, agencies are moving more towards AI and automation to speed up operations and reduce inefficiencies.

How have clients reacted to the crisis and what do you advise them to do?

Almost all clients have re-assessed and re-balanced the four Ps. Challenger brands with sustaining power are now aggressively entering new categories and targeting new segments, while few companies believe that a temporary slack in ad spend is required in the midst of reduced sales. A few have completely eliminated ad spend, which is perhaps not prudent, as this is the time for continuous communication to consumers. Being silent is a death knell and the prudent ones will [continue] to invest aggressively. There is no one solution [that fits all.] We [have to] customize our solutions by brand and market.

What lessons from previous crises have helped you face the current situation?

We have learned more, from APAC as a region, after re-surfacing from the crisis in  2008-09. The “covidified” news is too much to digest, and the bigger opportunity is in content. MBC’s AVoD and SVoD platform Shahid is growing leaps and bounds on account of this, and an upsurge of local content will change the scene dramatically. Brands that have adapted and communicated relevant messages have also been doing well [this year.]

What will you take away from this pandemic once we’ve passed it?

Every situation is different but this time, the consumer psyche and behavior have changed once and for all. It’s time for brands to reposition and relaunch with new communication that is relevant to the consumer. On the people & talent front, this pandemic tore many paradigms and created a once-in-a-lifetime opportunity to shape our future. We now have a rich playbook on employee engagement, wellbeing and mental health. The lockdown accelerated the digitalization of activities and processes, which will have a permanent impact on the organizational culture and employees’ psyche. Your team is everything when you have no physical office. Empathy can do wonders to energize and motivate despite gloomy situations. Siloed working is dead and collaboration has become more essential.

Click to comment

Leave a comment

More in Agency

To Top
close
Logo

Communicate Online is your trusted resource of Marketing & Advertising news in the Middle East.

By signing up, you will receive a weekly update of global and regional digital trends, agency news and market reports right in your inbox.

*