CAIRO: Common wisdom says that when times call for cost-trimming, marketing budgets are the first to be cut.
So salespeople are understandably worried over the prospect of a global slowdown seeping into Egypt. This, however, did not deter Nielson from opening the Consumer 360 conference, a two-day networking and educational forum for local marketeers, in the spacious Four Seasons Nile Plaza this week.
“We are all anticipating recession, said one salesman following Genius Works Chief Executive Peter Fisk’s keynote speech. “What do we tell our CEOs?
“You may need to cut your costs, Fisk responded. “And that may not be a bad thing. As much as 70 percent of marketing budgets is typically wasted, he said.
In its first day, the conference featured speeches and panel talks on information technology and real estate.
Online marketing in Egypt is still primitive, most of the technology speakers agreed. But internet penetration has grown by 1,300 percent here in the past eight years, suggesting a major opportunity, said Google Egypt’s Country Manager Wael Fakharany.
Over 10 million Egyptians now use the internet, according to Google figures.
“Ten million people doing anything is a large enough group for us to start communicating with them, said Con O’Donnell, the CEO of Sarmady.
According to state statistics presented at the conference, the internet reached 15.59 percent of Egyptians in September, totaling to more than 12 million users. Most Egyptians browse the internet for entertainment, though religious information is also a popular draw, the figures said. Making financial transactions was the least common reason for Egyptians to go online.
From the outset of the real estate sessions, addressing slowdown worries eclipsed marketing talk.
“We believe this sector is going to grow, said the first speaker, Mountain View Chief Executive Ayman Ismail. “This is the message we want everyone to hear before they leave.
The sector should make some changes, he said. For instance, for every dollar spent on marketing in Egypt, 3.2 cents are spent on market research, he said. But in the real estate sector, the amount spent on research is less than a quarter of this.
“By and large we spend much less money trying to understand our consumers, he said. Firms should spend more on analyzing demand and buying habits, he added.
Some of the most visible marketing campaigns in Egypt come from real estate firms like SODIC, Palm Hills and Talaat Moustafa, a fact laid bare by a glance at the billboards lining the July 26 Corridor.
Yet these companies’ stocks have been among the hardest-hit since the financial crisis swept into Egypt’s capital markets this October. Some investors say real estate firms have focused too much on luxury developments to the exclusion of medium and lower class segments. Real estate markets are also strongly linked to economic growth, expected to decline next year.
Only 8,000 to 10,000 of the 360,000 units demanded in Egypt each year can be classed as luxury, said Khaled Al Mekati, general manager at Metco Contracting and Trading, drawing on Ministry of Housing statistics.
He asked whether this suggests that it is time to start catering to poorer clients.
“This is a market that evolves, said Ismail. “Nobody is going to spend the rest of their lives in the A++ market. Commercial and office sectors are also underdeveloped, he added.
Throughout the day, it was Fisk’s sound bite-rich speech that drew the most applause. “Consumers, he suggested, are better thought of as “customers. Better still, he said, why not think of them as “wonderful people?
“That’s your challenge as a marketeer, he said. “To make these wonderful people even more wonderful.
