Summer heights have brought the lull season back with it. Soaring temperatures not only slow down the pace of the market but also changes the work pattern of the business community. Often summer is the period chosen for travel or the time for going on a vacation. People escape the heat by travelling to cooler places or rather choose to stay in the comfort of their air conditioned homes. These summer plans often reflect on the performance of the printing and advertising market, which are normally based on day-to-day market activities. The change is especially visible for printing presses that specialize in commercial print activities.
But will Ramadan add life to the stagnant business season? To what extent can Ramadan be considered as a lifesaver for the otherwise lull printing season? ME Printer pondered over these questions and spoke to some of the printing and advertising professionals in the Middle East to know more about the market activities and trends during Ramadan.
The longest Ramadan since 33 years
This year Eid al-Fitr is expected to fall either on August 19 or 20, and according to meteorology reports this Ramadan will be the longest and the hottest in 33 years. With the dates predicted for Ramadan, the printing and advertising sector have geared up to meet the demands that will rise during this season. People resort on to more social and charitable activities during this month, and they take up various methods to communicate this to the society. During Ramadan, printing presses in the Middle East often see a huge demand for a broad and diverse range of ‘Ramadan Calendars’. Bulk quantities of Ramadan calendars are printed during this period. Apart from that, there is demand for the printing of Holy Quran, brochures, flyers, greeting cards, and also the printing of promotional material.
The food, paper and retail sector pool in a considerable amount of profit during Ramadan. They attract customers with the announcement of special offers and discounts, which are distributed and communicated via leaflets and brochures. Government institutions and bodies, charitable institutions, banks and commercial centres report a rise in consumer activities during this month. They consider it as an opportunity to increase their profits, especially the food and paper sector.
According to Al Ittihad newspaper, the volume of advertising expenditure in the UAE during last Ramadan amounted to 484.4 million dirham (US$ 132 million), while Pan Arab Research Center (PARC) reports that there was a growth of 27% in 2011. Bassam Yahya, Regional Director of PARC observed that the advertising expenditure of last year rose by 27% compared to the advertisement expenditure in 2010, which was 381.6 million dirham (US$ 104 million dollars). He observed the high volume of advertising expenditure (that is recorded during Ramadan) as a regular phenomenon and associated it to the surge in promotional activities, especially for food products, cars and clothes.
At regional level, the volume of advertising increased by 10% during Ramadan last year. It recorded a $2.4 billion compared to the 2.2 billion US dollars spent during Ramadan in 2010. The advertising expenses in Kuwait amounted to US$ 165 million, $89 million in Saudi Arabia, US$ 45 million in Qatar, US$ 28 million in Amman, and $14 million in Bahrain.
Edmond Moutran, Chairman of Memac Ogilvy said that during Ramadan the market witnesses a remarkable growth in the rate of advertising compared to the amount of advertisement spend during the remaining months of the year. He said that the month of Ramadan is the most important period for the advertising industry, and pointed out that the ad agency is looking forward to increase its revenue and thereby compensate the loss suffered by the company during the financial crisis.
According to Edmond, advertisements for food products, special offers on cars and household appliances stimulate the advertising market, and help to compensate the loss created by the declining real estate and financial sectors.
Hitting two birds with one stone
Abdul Aziz al-Omran, Owner and Manager of Zeej Printing Press in Saudi Arabia opined that the printing press was lucky, as Ramadan commenced during summer this year. He said that this will have a positive impact on the business. “Usually the business is down during summer and post Ramadan, but with Ramadan coming early this time, there will be no lull season hopefully. It will benefit us to a great extent.” He noted that the amount of printing orders has increased by 30%, which according to him reflects the positive attitude of the market.
Abdul Aziz observed, “We consider the summer season, i.e., the month of July and August as a stagnant period. We witness decline in the printing orders owing to several reasons, such as the closure of schools and universities, and the amount of people travelling abroad for vacation.”
He said that their main clients include retailers, who drive sales through the printing of brochures, posters, special offer leaflets, and other publications. Aziz said that after retailers, summer camp centres and mosques bring them business, as they seek to print Ramadan Calendar, religious publications, and other print material during this period.
Explaining about the printing market in the Kingdom, Abdul Aziz said that the digital printing market is facing intense competition as a result of the increasing number of digital presses being installed in the country. He added that though there is growth in the number of publications, the profit margin is low due to the price pressure. “We are awaiting the new printing technologies that were unveiled at drupa 2012. We believe that these new technologies will help us to overcome the challenges that we currently face. I was especially impressed by the Liquid toner technology, which provides high productivity at a low cost and it can be used for a variety of applications. But the problem is that this technology is confined to certain printers like HP Indigo or is still under the test phase of companies like Xeikon and Océ, who have not yet developed it for commercial use.”
Eleventh Hour Decisions
Meanwhile, Ahmed Sharif, Managing Director of Five Stars Graphics in Egypt observed that it is too early to judge the impact of Ramadan this summer, especially in Egypt. He opined that the current political situation in the country and decisions taken during last minute often cause delay in coming up with a proper advertising campaign. He said that Egyptians are famous for taking decisions at the last moment and these 11th hour decisions often delay the printing activity.
He explained, “The market is now in a state of instability. We hope that we will see an increase in the number of orders.” Explaining the reason for delaying the summer and Ramadan promotions, Ahmed said, “The printing business is affected by many factors and reasons. The most notable among them is the political scenario in Egypt, which had negatively impacted the performance of the market during the past months. Instable market conditions and lack of vision delayed the summer campaigns, which this year started in July instead of May. Advertising campaigns were delayed, as companies were less enthusiastic to disburse funds for advertisements. With budgets curtailed, most of the companies set back their advertisement expenses.”
According to Ahmed, Ramadan could on the contrary have an opposite effect on the market activities. He explained that companies will resort to cut their advertising budget and will decide to mix their expenses in one budget in order to save cost. “There are separate budget set for summer promotions and Ramadan, but this year company’s may choose to merge their expenses and thereby reduce cost.” He added that the integration of the budgets may cause a decline in the number of orders compared to the previous years. Ahmed said that in 2011, about 30 to 40 % o of the advertising campaigns were done during summer.
He also warned about the impact of digital advertising through websites and social networking, which is gaining more ground at the expense of print advertising day after day.
