Billboards empty as Iran’s ad sector mulls sanctions

US sanctions are having an adverse affect on the Iranian advertising sector. (Reuters)
Updated 04 September 2018
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Billboards empty as Iran’s ad sector mulls sanctions

  • Staff numbers at agencies are being cut due to lack of work
  • International brands have begun to withdraw from the country

LONDON: Iran’s advertising agencies are struggling to find new business as international brands start backing out of the country following US President Donald Trump’s decision in May to withdraw from the Iran nuclear deal and reimpose sanctions on the country.
Staff numbers at agencies are being cut due to lack of work and billboards are often left empty on the sides of Iran’s roads, said Sam Cordier, managing director at PGt Advertising in Iran, as major brands reconsider whether or not to maintain a presence in the Iranian market.
While Trump reimposed some sanctions in August, tougher measures, including those involving oil exports, will be implemented in November. “You can already see that it has affected a number of the agencies here,” he said.
“The pulling out of international companies means the investment into this country falls. That investment literally pays the salaries of the young talented Iranians that work here. And over the course of last month or so a number of agencies have had to cut staff.”
“It is really tough,” he said, adding that PGt has not had to lose any employees yet.
The lack of business contrasts sharply with the surge in enthusiasm for the Iranian market following the lifting of international sanctions in January 2016.
With Iran finally able to sell its oil freely on international markets, and coupled with the large and youthful population of more than 80 million people, the country was touted as the “next big thing” in advertising for both the local and international agencies. Potential clients such as oil companies, car producers and plane makers began to pile into the country.
Iran was even included in the top 30 up-and-coming advertising markets that could threaten the dominance of traditional players, according to a report by advertising firm Zenith Media in January.
While Iran’s advertising market was “underdeveloped” the report said, due in part to large state involvement in the economy, the country has “long-term potential”.
“We estimate that ad market was worth about $1.4 billion in 2017, which was 0.3 percent of GDP. We expect this proportion to rise as Iran reintegrates into the global economy, ” it said.
Iran’s advertising expenditure would reach $2.1 billion by 2020, the report forecast.
Buoyed by thawing international relations between 2015 and 2016, there was a flurry of international ad agencies signing deals with local companies as they looked to carve out a share of the nascent market.
“You have a country where perhaps traditional marketing practices are still in their infancy, but at the other end there is a growing tech industry,” said Barry Dudley, a London-based partner at Green Square, a media and marketing advisory firm.
London-based Japanese-owned Dentsu Aegis signed a partnership with Iran’s International Communications Agency in May 2015.
The following year, UK-based Grayling secured an affiliation agreement with Iran’s PGt Advertising.
By November 2016, the UK’s WPP had also signed an affiliation deal with digital marketing company PPG in November 2016.
Trump’s move has quashed hopes that such deals would bring in a profitable new stream of business for international ad agencies, with many of them pushing pause on their Iran strategy.


Facebook’s Zuckerberg: No plans to resign

Updated 8 min 20 sec ago
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Facebook’s Zuckerberg: No plans to resign

  • Facebook has stumbled from one mess to another this year
  • Zuckerberg defended his company against the broader wave of flak it has taken this year

WASHINGTON: Embattled Facebook CEO Mark Zuckerberg said Tuesday he has no plans to resign, sounding defiant after a rough year for the social platform.
“That’s not the plan,” Zuckerberg told CNN Business when asked if he would consider stepping down as chairman.
He also defended Facebook chief operating officer Sheryl Sandberg, who has drawn criticism over her handling of the social media giant’s recent crises.
“Sheryl is a really important part of this company and is leading a lot of the efforts for a lot of the biggest issues we have,” said Zuckerberg.
“She’s been an important partner to me for 10 years. I’m really proud of the work we’ve done together and I hope that we work together for decades more to come.”
Facebook has stumbled from one mess to another this year as it grappled with continuing fallout from Russia’s use of the platform to interfere in the 2016 US presidential election, the Cambridge Analytica scandal in which user data was harnessed in a bid to help candidate Donald Trump, and a huge security breach involving millions of accounts.
Most recently, an investigative piece published last week by The New York Times said Facebook misled the public about what it knew about Russia’s election meddling and used a PR firm to spread negative stories about other Silicon Valley companies and thus deflect anger away from itself.
“It is not clear to me at all that the report is right,” Zuckerberg said of the Times article.
“A lot of the things that were in that report, we talked to the reporters ahead of time and told them that from everything that we’d seen, that wasn’t true and they chose to print it anyway.”
Zuckerberg also defended his company against the broader wave of flak it has taken this year.
“A lot of the criticism around the biggest issues has been fair, but I do think that if we are going to be real, there is this bigger picture as well, which is that we have a different world view than some of the folks who are covering us,” he said.
“There are big issues, and I’m not trying to say that there aren’t ... But I do think that sometimes, you can get the flavor from some of the coverage that that’s all there is, and I don’t think that that’s right either.”