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Advertising a sign of the times

by This email address is being protected from spam bots, you need Javascript enabled to view it  on Sunday, 16 November 2008
Joseph Ghossoub delivers ad spend warning.

Booming real estate has allowed the regional advertising sector to grow fat. But there may be lean days ahead for the media industry as spend declines on cooling demand for property.

Real estate companies have been the chief architects behind Dubai's meteoric rise in the last decade, with developers such as Emaar and Nakheel reshaping the city's constantly shifting skyline.

They've also helped to re-shape the Gulf's US$3.8bn advertising industry, as adverts for thousands of villas and apartments filled the pages of newspapers and magazines while at the same time being festooned across ever-increasing outdoor billboards.

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But as the real sector stalls amid a global economic slowdown, advertising chiefs are warning of a major drop in campaigns.

Joseph Ghossoub, president of the International Advertising Association told the Media and Marketing Conference in Dubai on November 3, that real estate advertising spend in the Arabian Gulf was expected to fall by as much as 25% in the first half of 2009, "because of the state of mind of the people around it [the real estate market], not because of the real estate sector itself."

Advertising spend


In 2006, advertising expenditure in the UAE crossed the US$1bn mark, reaching US$1.06bn, up from US$869m in 2005.

The UAE was the biggest spending country in the GCC that year, and Emaar, developer of the Burj Dubai, the world's tallest tower, threw US$9.2m behind advertising campaigns alone.

The Dubai-based Pan Arab Research Centre (Parc), last week reported advertising spending in the UAE rose 47% in the first half of 2008 to US$929m.

Now industry chiefs are asking if that represented the peak of the curve.

While Ghossoub was upbeat on the prospects of the industry coming through the slowdown, many other delegates at this year's industry gathering were less optimistic.

"People are a little bit cautious and are waiting to see what will happen with prices so perhaps waiting a little longer," Ghossoub told delegates at the show.

In a downturn, companies tend to cut back, slashing costs - and the marketing budget is often the first to feel the chop.

The balance sheets of the region's big government-backed real estate firms may still be strong, but negative sentiment is starting to hurt the industry.

Creative credentials

While the Middle East's advertising industry faces an uncertain commercial future, its creative credentials also came under scrutiny at the Dubai conference.

Simon Francis, regional CEO of Saatchi & Saatchi, said that the local industry lagged behind Western advertising agencies in terms of creativity, and ran a couple of GCC-made television commercials to illustrate his point, adverts that may have been deemed tacky or passé in other markets.

"No one is saying the work is rubbish here, it's just not sustainable, there isn't a creative culture, it's lazy advertising and lazy creativity," he said.

Part of the reason for the lack of creative talent, are the opportunities available in the region and the poaching between firms, Francis admitted.

Dubai suffers from a transient workforce, with expatriates coming to the UAE for a fleeting stint at a multinational company - often as little as three to six months - and then returning home.

Because there is so much movement among staff in Dubai, people leave and join companies at a far greater rate than in Europe and some other markets.

"We've put them into place and someone has poached them. There is a high staff turnover here, and we need to change our commitment," he said.

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