Pushing for transparency: Structural developments and audience monitoring systems are changing the face of the sector

Despite going through a tough period due to regional instability and financial turmoil in several Western economies, Morocco remains one of the main advertising markets in the Maghreb in terms of its size and dynamism. Television is still the most important of traditional media vehicles, and local established channels are seeing increased competition from pan-Arab satellite channels, steadily claiming part of the advertising pie. Radio is undergoing a major shift, as a newly installed audience-monitoring system has been shaking the confidence of long-established radio broadcasters and making advertisers rethink their strategies for investing in the segment. The internet continues to become a more attractive medium to invest in, and new online products are further threatening the hegemony of print media outlets. A better understanding of the need to maintain standards has prompted market operators to start working on a code of conduct.

The sector’s overall performance was not immune to external volatility. According to Mounir Jazouli, the vice-president of the Moroccan Association of Advertisers (Groupement des Announceurs du Maroc, GAM), 2012 was a sensitive year for the communications sector in the country, due to the combination of two elements. First, the international crisis affected the parts of the Moroccan economy that are linked to foreign countries through free-trade agreements, thus affecting Moroccan subsidiaries with head offices located in Western countries under economic strain. Additionally, there were remnants of the political turbulence that affected Arab countries in 2011, which still translated into continued caution from some companies in 2012. “All of this has introduced a certain level of reluctance in Moroccan advertisers,” said Jazouli.

MARKET VALUE: The result was reduced performance by all traditional media vehicles, aside from cinema. Total expenditure on advertising in Morocco experienced a 5% decrease, falling from Dh5.9bn (€524.5m) in 2011 to Dh5.6bn (€497.8m) in 2012. But sector figures were compiled using published prices, meaning that most estimates did not include discounts and regressive pricing for several pages bought. Some approximations put the real value of the sector at around half of the Dh5.6bn (€497.8m) mark.

The international economic downturn has pushed companies and traditionally big advertising spenders to be more cautious, prompting a drop in communications budgets across most sectors. The immediate impact was a decline in the number of companies or brands that bought advertising space in any medium in Morocco – from 4586 advertisers investing in the market in 2011 to only 3957 in 2012.

KNOCK-ON EFFECTS: Television, which accounted for 35% of advertising expenditure in 2012, saw a 3% decrease in spend. Despite being a relatively small decline, this came on the back of a more severe reduction in advertising earnings of 12% between 2010 and 2011, at the start of the economic slump. Radio was the most affected media outlet, with the overall expenditure on radio advertising falling by some 13% between 2011 and 2012. However, this decrease came after a period of steady growth following the liberalisation of the sector, which prompted advertising budgets spent on Moroccan radio stations to rise some 7% between 2007 and 2011.

FOLLOWING TRENDS: Reflecting a global trend of advertiser spend switching from print to online, which resulted in the closure of the Moroccan news magazine Actuel in early 2013, print media registered a 6% reduction in advertising investment. This was mainly caused by greater pressure from cheaper and more targeted advertising options available through internet news sites and social media. “Advertisers are increasingly paying attention to where they put their advertising investment, every dirham needs to be justified, so support must be focused at the advertiser’s targeted readership,” said Jazouli. Outdoor advertising expenditure decreased by 2% in 2012, after having gone through rapid expansion between 2007 and 2011, when it managed to attract 21% more advertising spend. Billboards, which are mainly present in Rabat, Casablanca and other big cities in the kingdom, have become a predominant advertising vehicle, representing some 26% of all advertising expenditure in Morocco in 2012, surpassing the importance of press advertisements, which accounted for around 22% of all money spent on advertising. Cinema, which represented just 1% of advertising spend in 2012 was nonetheless the only traditional advertising medium to see positive growth, accounting for Dh45m (€4m) in 2012.

The first multiplex cinema opened in Casablanca in 2002. A second one opened in Marrakech in 2006, and two more in Rabat and Tangier. The recently inaugurated Morocco Mall, in Casablanca’s seaside La Corniche district, features the country’s first IMAX cinema theatre. However, the number of cinemas has decreased from 280 in 1982 to just 44 in 2012.

READ ALL ABOUT IT: Investment in print media has held relatively stable in the past few years, dropping just 3% from Dh2.05bn (€182m) to Dh1.99bn (€177m) between 2011 and 2012. Around 500 print titles are regularly published in Morocco, between monthly magazines and daily newspapers; however, the bulk of advertising spend is generally concentrated on about 149 titles, according to GAM. Of those, 97 titles are published in French and the remaining 57 are in Arabic. Despite the large number of existing titles, the total print media readership hovers between 300,000 to 350,000 people, according to industry estimates.

Investments in print are generally marked by seasonality and more prevalent over the second half of the year. Ramadan typically marks a reduction in the number of advertisers that focus on magazines and newspapers, as the emphasis on the family environment makes television consumption more prevalent.

Sales of Moroccan tittles are monitored by the Organisation for Broadcasting Justification (Organisme de Justification de la Diffusion, OJD), which gives regular information on the number of copies printed and sold for most local publications. At the same time, however, OJD still lacks the ability to accurately measure total readership, which represents a significant gap in available information in a country where each newspaper is passed around three times on average and renting a copy of a newspaper to avoid paying full price for it is commonly practised among low-income readers.

NEW STRATEGIES NEEDED: Overall, print media’s 20% penetration rate is severely below that of television (72.2%), outdoor advertising (54.6%) and radio (50.2%). The inability to reach a large part of the Moroccan public, together with the growing prevalence of digital media, means that in order to survive, print media titles might need to rethink their commercial strategies, focusing on narrower readership niches.

“Print media need to get a clear plan for the type of media product they want to be. If you have a good product, with a clear and simple and understandable concept, you can sell,” Jazouli informed OBG. “Maybe you will not sell to a huge amount of people, but you can create a print product that is targeted to a specific segment that advertisers want to communicate to.”

IN THE OPEN: As advertisers look to print media to target niche audiences, billboard advertising is becoming increasingly important for companies that want to publicise their brands widely. Investment in outdoor advertising increased from Dh845m (€75m) in 2007 to Dh1.4bn (€124.5m) in 2012. This is not only the result of an expanded network of billboards along roads, streets, train stations and airports, but also a reflection of the Moroccan market, which favours sensational advertising methods. Of the traditional media channels, outdoor advertising is already the second only to television in terms of penetration level.

Casablanca, the nation’s commercial capital, claimed over half of the overall countrywide spending on outdoor advertising, which can cost between Dh12,000 (€1067) and Dh20,000 (€1778), depending on the location and size of the billboard. Despite its rapid growth, recently implemented communal taxes have increased prices, as billboard companies have been passing the extra cost on to clients.

WHO IS TUNING IN: The fact that television and billboards are the most important advertising methods is connected to specific characteristics of the Moroccan market because of the country’s high level of illiteracy and low newspaper consumption. Radio, which attracted 16% of national advertising expenditure in 2012, remains an important media to Moroccans, who spend an average of 10% of their daily time tuning in.

TAKING MEASUREMENTS: However, the medium’s universal appeal and ability to attract investment was severely hampered in 2012 by a structural change. The Interprofessional Centre for Radio Audience Measurement, a sector group that includes the radio stations, communications consulting firms, advertisers, advertising agencies and advertising buying agencies, began measuring Moroccan radio audiences in March 2012. This brought some needed transparency to the sector, but the much-anticipated audit had an impact on the sales of advertising space, shifting traditional balances.

“This meant that media investment in radio was almost completely stalled for the first four months of 2012, because advertisers decided to wait until March or April to see the results before they engaged in their advertising contracts,” Jazouli told OBG. “Even those that normally settled for yearly advertising contracts with the stations waited for the results. This was the first time radio audiences were measured in Morocco.”

Thee effects of the new system on the market were expected, with advertising spend influenced for the first time by access to concrete audience numbers. This has transferred a lot of bargaining power in the business from popular radio stations to advertiser decision-makers with data to back their commercial choices. In the near future, radio is expected to return to a growth pattern that should see it recover the advertising investment lost between 2011 and 2012. At least some radio stations are expected to rebrand or develop much more specific positioning in order to adapt to a more transparent market in which actual figures are becoming more important than perceived popularity.

TV IS KING: Television still represents the biggest communications medium in terms of advertising, as the average Moroccan spends 18% of his daily time watching television. This has translated into 35% of all advertising expenditure in 2012 being spent on television. Among broadcasters, 2M accounted for 64.4% of television advertising revenues, followed by Al Aoula with 21.4%, Medi1 TV with 13.5%, and Arridaya with 0.8% of total investment in television in 2012.

Nonetheless, television’s share of total advertising expenditure has decreased. This is partially explained by the slight reduction in advertising budgets, as well as the rising amount of money channelled into radio, outdoor and internet advertising. Additionally, local Moroccan television stations must now also contend with competition from foreign-based satellite channels that are broadcast across the Arab world, such as Rotana and NBC. Based in Egypt and the Gulf, these multi-channel media groups are known for showing a mix of films, Arab reality shows and popular soap operas that have received universal acclaim across the region. Advertising space in these chains is competitively priced due to the large number of viewers. As Morocco is two to three hours behind Egypt and the Gulf, primetime in Rabat is about midnight in Cairo, when some pan-Arab cable channels broadcast reruns.

“In some instances, this means that buying advertising space in a satellite network showing in Morocco can be cheaper than that same primetime spot through a locally based broadcaster,” said Jazouli.

Still, there are no concrete figures that represent the weight of Middle East-based cable channels in the Moroccan market. MarocMétrie, the system overseen by GAM that collects regular data on television audiences, does not include cable channels. According to GAM, some of the foreign cable channels that have become popular in Morocco are now trying to be included in the MarocMétrie service. This would give them accurate figures to sustain growing interest in the television advertising sector. But television operators in Morocco are opposed to the incorporation of ratings for the Arab chains, stating that they do not have the same costs as local ones. As well, Moroccan television stations must abide by a stringent set of regulations set by the High Authority for Audio-visual Communications (Haute Authorité de la Communication Audio-visuelle, HACA), the sector’s governing body, including the need to provide a certain level of public service in their programming and employ Moroccans.

DIGITAL ADVERTISING: Online advertising has becoming increasingly important. “Digital started to grow in 2011, and really cemented itself in the market by 2012. The economic slowdown that has been affecting several sectors has had an impact on this realisation; when there is less money available, companies look for alternatives to optimise resources,” said Mehdi Sebti, the president of Casablanca-based Boomerang Communication.

Currently, there are no official figures measuring the amount of advertising investment channelled towards online content. Some sector estimates mention figures between Dh100m (€8.9m) and Dh150m (€13.3m). However, there is no credible measurement system at the moment. “These figures are a sort of reference, but we do not really know what is included. Are they just banners or is website creation considered advertising as well? Existent estimates are too vague,” said Jazouli.

Sector projections show that the growing access to internet around the country, especially through 3G and soon-to-be operational 4G connections, coupled with growing smartphone penetration levels should increase communication opportunities for Moroccan companies. The development of local content for hand-held devices is still hugely unexplored. “The internet allows commentary and feedback, opening up opportunities for targeted marketing and advertising. You cannot go and click on an advertising board on the street,” Sebti told OBG, adding that in some cases it is still difficult to explain to customers the need for including a digital component in advertising campaigns.

The importance of social networks in the country was exemplified by the growth in the number of Facebook accounts, which surpassed 4m in 2012, according to local media reports. Over 60% of Moroccan internet users are under 24 years old. Sector operators agree that the decisive shift to digital advertising has transformed the internet into the fastest-growing medium. GAM and other market players have started working to establish a method that correctly measures inter-net advertising spend and add transparency.

SECTOR INVESTING: As in most advertising markets, telecoms companies remain the biggest advertising investors in all traditional media in Morocco. Maroc Telecom, the biggest telecoms operator, which is 30%- owned by the government, was the country’s biggest advertiser, spending around Dh530m (€47.1m). Although their contribution to total spending levels might have decreased slightly in 2012 due to the stabilisation of competitive positions of the three operators, Maroc Telecom, Meditel and Inwi. Telecoms firms invested over three times the amount of the second-largest sector in terms of advertising investment in the kingdom. In 2012 the three operators combined accounted for Dh1.3bn (€115.6m) in spend, followed by the food sector, which invested Dh444m (€39.5m) in advertising last year, according to GAM figures. In third place, tied at around Dh380m (€33.8m) in advertising expenditure were the transport sector and the financial services companies.

The average price of a one-page advertisement in a daily newspaper, based on the prices of 25 newspapers, is around Dh23,000 (€2050), according to figures by GAM. A 30-second television spot will cost Dh17,500 (€1556) on one of the main channels: Al Houla, 2M or