For the past 40-years “Brand Iran” has remained one of the most contentious brands in the world. Perhaps as elusive as it is controversial, perceptions of the country are shaped by political and religious messaging scripted both in Tehran and in capitals around the world.
One aspect we hear little about, however, is the Iranian consumer.
When all else by which we define ourselves is stripped away, be it country, battle cry or creed, at our core we are all the same as consumers —we want what we want when we want it.
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And, in Iran, like everywhere else, the job of brands is to navigate that path and build a lasting relationship with us.
To find out more about what’s happening on the ground there, we caught up with Sam Cordier, Managing Director at PGt Advertising.
The family-run agency based in Tehran first came across our radar last summer when it inked an affiliation agreement with London-based Grayling, whose spokesperson at the time described Iran as “an increasingly important market for many of our internationally focused clients.”
In the following Q&A, Cordier offers extensive insight into the client/consumer/agency side of Iran from dilemmas such as advertising shampoo when you’re forbidden to show a woman’s hair to not being surprised when you see an exact replica of your creative campaign at home being run frame for frame by a local Iranian brand to the incredible potential the market there holds.
Not a lot has been written about the ad world in Iran. Can you offer us a quick lay of the land?
The ad world here in Iran is honestly a very interesting place. We’ve got everything that any communications specialist could want over here, media including TV, radio, outdoor, print, and online.
Iran’s terrestrial TV, run by state-controlled Islamic Republic of Iran Broadcasting, IRIB, has one of the largest advertising reaches in Iran with 12 domestic television channels, 4 international news television channels, 6 satellite television channels for international audiences, and 30 provincial television channel available countrywide, which make use of local accents or dialects.
IRIB is used by a huge range of companies, both local and international, but it’s important to note that non-local companies will pay a premium rate in comparison to local companies, and as a whole, many companies trying to advertise effectively on IRIB’s terrestrial TV channels usually find it cost prohibitive.
Even the kebab shop in our local square has an application for Android phones. Aside from that, a new online store or service is popping up almost daily here and some have already taken strong steps into becoming recognizable brand names.
Although satellite dishes and therefore satellite TV is illegal under a law passed in 1994, IRIB’s own research center estimates that around 70% of Iranian households use them to access channels that are illegally broadcast into Iran.
This means that some of the satellite channels and their programs garner massive Iranian audiences, which are all but unusable by any brand that wishes to do official business in Iran. Simply put, the channels are monitored and any brand advertising on the illegal satellite channels will face serious repercussions locally.
In regards to outdoor advertising, Iran is very similar to any other country in most ways. The only noticeable differences are that there is a serious lack of advertising space in the 5 major cities of Iran (Tehran/Karaj, Mashhad, Isfahan, Tabriz, and Shiraz) and a huge amount of demand.
What this means is that out of home advertising (OOH) in these cities costs as much as OOH advertising in places like London, Paris, and New York – which is a big surprise to many people who try to compare prices in Iran with the rest of the Middle East.
What kind of trends are you seeing?
The most interesting medium is currently digital. Looking at the numbers, Iran boasts the highest number of internet users in the Middle East at 46.8 million compared with the next highest Saudi Arabia at 18.3 million. When brought into the context of our population (estimated to be around 81.8 million people in 2015), that’s a massive 57.2 per cent penetration.
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Even the kebab shop in our local square has an application for Android phones. Aside from that, a new online store or service is popping up almost daily here and some have already taken strong steps into becoming recognizable brand names – although I feel there will still be some time before these new online start-ups become really profitable.
Another indication as to how advanced is Iran’s digital space is the fact that many big-name international brands are focussing a major part of their marketing budgets solely on online activations – with other marketing elements only supporting their online drive.
We recently commissioned a large study to help us answer the question of how engaged the Iranian population is online and the results were quite astounding. It described the number of active users for social messaging and social networks who log-in at least once a day.
Sightseers in Tehran- Photo by Abbas Borzou
Bearing in mind that out of all of the networks mentioned in the study, Facebook, YouTube, and Twitter are blocked and are only accessible by a VPN, these numbers, even when taken with a pinch of salt, are extraordinarily high.
Social messaging applications are particularly popular here in Iran, with a few of the major players really fighting for the top spot in terms of message traffic. Viber used to hold the top spot, but it has recently been difficult to connect to the service and unsubstantiated rumors have been spreading that the government has been limiting access to it. There was a joke that went around recently: ‘The largest migration of the Iranian people in the last 2,500 years has been from Viber to Telegram.’
Iran’s digital space is dominated by mainly urban users, which accounts for 70 percent of the country’s population, so if a big brand wants to reach a still rather substantial rural population, television or traditional outdoor advertising is still the key.
All advertising in Iran must follow the Islamic values laid out by the Islamic Republic of Iran, and this leads to agencies having to do some very creative thinking when it comes to certain brands or products.
Out of these urban users, available statistics point out that the youth of Iran (15 to 29-year-olds who overwhelmingly live in urban areas, one-sixth of which live in Tehran) constitutes a significant segment of internet users. Their internet use has shown a steady increase in recent years.
In provinces such as Tehran, Semnan and Isfahan, accessibility to the internet among youth is close to 40 per cent. Iran’s Centre for Research and Strategic Studies found that more than two-thirds of the country’s young people regularly use the internet. Their survey found that of the 67.4 percent of Iranian young people who use the internet, 19.1 percent use the net for chatting, 15.3 per cent for social media, 15.2 percent for games and fun-surfing, and 10.4 percent use the web for scientific research.
What are some of the more popular trends in terms of consumer engagement?
Bearing in mind the previous points made about Iran’s digital arena, it’s hardly surprising to say that the most prominent trends happening in Iran in terms of consumer engagement are online. Things like online competitions are constantly being used by a majority of brands across a huge range of digital applications – mostly Instagram.
Wego, the popular travel search engine recently entered the Iranian market and as a mainly digital platform, it made sense for them to run their first advertising campaign on Instagram. Recently finished, the campaign was mainly a brand awareness campaign and it asked people to upload photos of where they’ve traveled to in order to win one of 5 Go-Pro cameras.
In general, and I expect that this doesn’t change wherever you are in the world, any competition that provides a cash prize to the winner (or winners) at the end of it does very well in regards to consumer engagement.
How does the pitch process in Iran differs from other places you’ve worked?
The pitch process here in Iran doesn’t differ massively to any other country I’ve worked in and I’ve worked in quite a few. Agencies are usually invited to pitches which are announced by the client’s procurement department, and once received, they are usually evaluated by the client’s marketing department. Those that are accepted by the marketing department are then looked at again by the procurement departments, but this time in regards to the prices announced by the agency.
There was a very recent pitch held by Takdaneh, one of Iran’s largest and most well-known fruit juice manufacturers. The interesting thing about this particular pitch is that it wasn’t actually described as a pitch – but more of a competition. Agencies were invited to enter the ‘competition’ and the prize provided to the winner was the contract for Takdaneh’s latest packaging design updates.
How about government oversight? The impression from the outside is that there is a heavy hand.
All local creative that is to be officially published and viewed by the public be it TV, radio, OOH, or print) must obtain approval from Iran’s Ministry of Islamic Guidance and Cultural Affairs –known locally as Ershad. They are particularly strict when it comes to TV, radio, and OOH advertising, but can be more lenient when it comes to print or online advertising.
All advertising in Iran must follow the Islamic values laid out by the Islamic Republic of Iran, and this leads to agencies having to do some very creative thinking when it comes to certain brands or products. A simple example is that showing a woman’s hair is not acceptable in any format. Imagine the brainstorming sessions trying to drum up good quality creative for a woman’s shampoo or hair care product!
Iranian brands will simply take ad campaigns used by global brands and will copy them, in many cases frame by frame, for their own brands. There are many cases of this here in Iran and there’s even a specific Telegram Broadcast channel that calls these lazy copy-cats out.
Yes, I would say that some of the regulations here would raise eyebrows in more ‘advanced’ ad markets around the world. One major aspect is that it’s only been about six months that we’ve been able to use celebrities to endorse brands. Prior to this, regulations prohibited the use of any celebrity be it sports, TV, radio, or cinema/theater celebrity in connection with any brand – although brands were able to sponsor movies or concerts, they were not able to use the celebrities in their own ad campaigns.
What has been most frustrating for you as a creative agency?
There are 2 major issues that frustrate us as a creative agency here in Iran: Number one is the lack of copyright law and second is the lack of value given to original creative ideas.
The above points mean that many Iranian brands will simply take ad campaigns used by global brands and will copy them, in many cases frame by frame, for their own brands. There are many cases of this here in Iran and there’s even a specific Telegram Broadcast channel that calls these lazy copy-cats out. The thing is that I’ve personally spoken to senior marketing people in the Ad Industry here that don’t see this as an issue!
Iran has a population of over 80m people, with a very large middle-class, which has a decent amount of disposable income, and a huge appetite for well-known brands from the rest of the world. So if I were a global brand owner and I was looking to see where the next market to expand into was, I would certainly be looking at Iran.
The other frustration we have as a creative agency is that there are many advertising agencies in Iran that are media owners and they will tend to make their money out of buying media placement for their clients. These agencies will provide the creative aspect of their campaigns to the clients for free, and as a result, they will not tend to put much value behind the creative they are making. The Client, in turn, will not care as they aren’t paying for it.
This is very frustrating as this drives down the value of original creative in the eye of local Clients. Simply put, they are not willing to pay the agency for original creative work as they are used to getting it for free.
There are thousands of very talented creative people here in Iran and until the issue of copyright is attended to, many of them will not be able to use their talents effectively.
Will we see a flood of global brands vying for a stake in Iran in the coming years?
Iran has a population of over 80m people, with a very large middle-class, which has a decent amount of disposable income, and a huge appetite for well-known brands from the rest of the world. So if I were a global brand owner and I was looking to see where the next market to expand into was, I would certainly be looking at Iran.
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Since the signing of the JCPOA back in July 2015, we have already seen a massive number of international brands vying for a stake in the Iranian market. Brands from all over the world, and in different industries, from car brands to restaurants and more, have already begun operations in Iran and many are already looking at local manufacturing to help with the very stringent importation regulations.
Companies like Nestlé, Unilever, and Henkel already have large production facilities in Iran and produce many well-known international brands here. Many are even able to export their locally produced products to neighboring countries.
What are some issues facing brands looking to enter the market?
The biggest issues facing a majority of international brands wanting to enter the Iranian market are distribution and importation regulations.
In regards to the latter, Iran’s government and Supreme Leader, Ayatolla Khamenei, are very focused on what is called a “Resistance Economy”, which strongly supports local manufacturing. This results in very strict importation guidelines and fees which drive any brand to look at means to limit their need to import. This could be raw materials or finished product.
When looking at distribution, around 70% of Iran’s consumer purchasing is done through what is known as Traditional Trade Routes. This entails a very large number of small and local grocery shops -known as baghalees– which cater to the majority of the population.
These shops usually have very limited shelf-space and even less space for promotional material. They are able to charge companies very large sums for the ability to place their products on the shelves and even then, tend not to follow internationally recognized systems of stock management.
These points, along with many others, mean that entering the Iranian market isn’t as easy as 1-2-3. Speaking to companies that know what they’re doing and have local expertise and connections can mean the difference between success and failure for many companies looking to enter the market.
What is some work you’ve done in Iran that you are most proud of?
In regards to campaigns that we’ve run, we’re very proud of the work we’ve done with LG’s AV department as we launched a full 360 campaign to promote their new Home Theatres. The campaign included a digital activation which asked Iranians to upload their own Karaoke attempts using exclusively designed digital application software. Our three-month campaign resulted in over 12,000,000 visits to the campaign site, over 1,200 uploaded songs, and over 8,000 comments a day, from all over the country.
LG campaign in Iran
We were also honored to work with Samsung on their largest CSR campaign to date where we developed Audio Libraries for blind children all over the country. The Samsung Audio Library project saw PGts Welfare department advancing Samsung’s brilliant work by setting up and launching Audio Libraries for the blind and partially blind in only four months (simultaneously with the Samsung SMART School project – which saw us setting up 100% SMART classrooms in underprivileged areas of Tehran).
Working with high-level contacts within key government ministries and NGOs (e.g. State Welfare Organisation, White Cane Association, and National Blind Association of Iran), PGt inaugurated three Audio Libraries in underprivileged regions throughout the country, fully equipped with all the latest Samsung technology.
Samsung Campaign in Iran
After seven years working in Iran, what excites you most about the market there going forward?
Potential. It’s a wonderful feeling to be in a country which has so much potential, in so many aspects. The future is very bright here in Iran and even major international and political upheavals seem to have little effect on the sense that things are getting better economically.
PGt Advertising is also unique in this market, in so much that we’re the only agency here that has experience dealing with international companies. This puts us in a wonderful position that allows us to set the benchmark standard for how many aspects of Marketing Communications are handled in Iran. Our standards are international and we speak the same language as international companies but have fully immersed local experience and know-how.
We can’t wait to see how the marketing industry in Iran develops over the next few years – and we’re very proud to be able to help shape the direction it takes.
This ran earlier this year but it’s the holiday season and we’re reposting it and engaging in holiday cheer. Happy Holidays!
