Advertising agencies in Lebanon are facing a "perfect storm"

Photo credit: Jana Traboulsi

Advertising agencies in Lebanon are cursing their bad luck! Had it not been for the political parties who swamped them with money for the elections last year, there would have had no income. With no elections this year, one can only guess how bad their situation is. Not just are they in a market that is changing at a record pace globally, in terms of clients moving accounts internally, or budgeting split between several agencies all while the said bugets tumbling to be a shadow of what they used to be, without factoring the invasion of all things digital - well, these agencies are also living in Lebanon and dealing with the Lebanese market which has crashed severely and now, added to all this, now they are dealing with the Lebanese revolution.
End of year campaigns are practically non-existent. I am not inventing this, just look around you, some ads date back to the week of October 14 or the week when the revolution started. The Lebanese Pound is still being traded in banks at around 1507 but in the black market prices vary by day and by region (a number around 2200 LBP to the Dollar is not only unheard of, it is actually the norm) - so already everything is more expensive as it reaches supermarkets or vendors, and in parallel companies are going through stages of either total layoffs, or paying half of the monthly salaries, or forcing workers to take accumulated vacation days with this applying to all kinds of institutions from high end shops, to FMCG companies, going through shops selling household appliances, or importers, stockists, and reaching the HORECA (hotels, restaurants and cafes) - with figures indicating around 450 such institutions (restaurants or cafes) closed since begining September 2019.
So let us look at the facts, right on the gates of the holiday season, workers are either not being fully paid, or cannot get their money out the bank (which is rationing money severely mostly playing $300 a week - with people converting each $100 at the exhangers to get the most out of it), and if they manage to get that hard-earned difficultly withdrawn cash, this makes the priorities of spending it confusing to say the least.
Recently I heard a joke: "A man goes into a bank accompanied by the grocery guy, the butcher, the car mechanic, the monthly installment, the internet provider, and the woman who sweeps the building's stairway, and says to the teller, "please distribute the 300 Dollars among them since you are so knowledgeable!"" - the Arabic saying goes "the worst problems are those that make you laugh".
Advertising people are not laughing that is for sure. A company I know - had at one point 26 clients now they are down to 3. Larger companies rely on international alignments to secure contracts, but even them are having their budgets slashed, and local clients - usually the large companies such a banks are wrecking havoc in their own spending (an Alpha bank withdrew the free coffee machines at its headquarters - anything which used to be bona fide is now considered luxury).
Well, advertising is always the barometer of the economy, when work there dries up expect the whole market to crash somewhere between 6-9 months in the future. And work started drying up severely at the end of last year.
And as I said earlier, since the whole international ad experience is changing and morphing globally, Lebanese agencies cannot but feel the pinch. They feel the so-called pinch more because they are now confronted to the social issues, the Dollar peg which blew in the black market hence making the Lebanese lose about about 40% of their income, and the Lebanese manifesting in the streets more often than not closing roads in protests. A feeling of big malaise looms large on the population, no one has the energy to feel the approaching holiday season, evryone is on edge or short-fused.
Ad people in Lebanon are living in what is called a "perfect storm" - which is defined as "an especially bad situation caused by a combination of unfavourable circumstances", it seems several circumstances have agglomerated together each worsening the effect of the other. Should there be a silver lining, I am afraid I do not see it yet.