Middle East: Middle Eastern promise

from 50 countries flew into the United Arab Emirates for an event that
rubber-stamped the country's place on adland's world map.

Virtually every agency in the UAE spent the week on red alert as
international bosses inspected the troops, many of them on their first
visit to the region. Allen Rosenshine, the BBDO Worldwide chairman, flew
in from New York, not just to argue that the TV ad is here to stay, but
also to kick the tyres of the Middle East Impact BBDO franchise.

Tateo Mataki, the president and chief executive of Dentsu, used the
event to make his first speech outside his native Japan and to meet the
team behind Dentsu's joint venture with the Saudi Arabia-based Drive
Communication.

And if the TBWA\Worldwide president, Jean-Marie Dru, could not manage to
get to the offices of the local affiliate TBWA\Raad in person, he at
least managed a helicopter fly-by after lunching with the senior team at
Dubai's Burj Al Arab hotel.

Clients were present, too, including Procter & Gamble's global marketing
officer, Jim Stengel. One of the world's most influential marketing men,
he took the opportunity to urge improvements to the region's woeful lack
of media measurements.

And if that were not enough, the numbers are beginning to justify the
optimism. Last month, WPP's quarterly trading statement announced that
the Middle East was now its fastest-growing part of the world.

WPP's chief executive, Sir Martin Sorrell, had to pull out of his
keynote speech to the IAA Congress at the 11th hour because of a
bereavement, but his interest in the region remains obvious. He told
Campaign: "The Middle East accounts for 2 per cent or 3 per cent of our
revenues, a couple of hundred million dollars. We expect to see this
growth continue. I am very bullish for the region." In a trading
statement in which he had been so downbeat about the UK's prospects, his
views on the Middle East stood out all the more. WPP is to hold its
board meeting in Dubai later in the year.

Dubai, the second city of the UAE, has been at the centre of advertising
growth for the region. Although a lack of robust data leaves most
figures as little more than educated guesses, the latest material from
the Pan-Arab Research Center suggests the UAE even overtook Saudi Arabia
last year, with an estimated adspend of more than $900 million -
an increase of 43 per cent year on year. Meanwhile, Saudi Arabia itself
grew by a not-unimpressive 27 per cent during the same period.

These figures may be skewed by the fact that much of the advertising
targeting Saudi consumers is now being created and bought out of Dubai,
so Saudi Arabia's true growth as a market is probably larger still,
while the UAE's is correspondingly less.

This is just one of the factors that has driven growth in the UAE.
Another has been the willingness of Dubai, a staunchly Islamic city, to
be hospitable to Westerners. While the UAE's capital, Abu Dhabi, can
enjoy its immense oil wealth, neighbouring Dubai's own income from oil,
while sizeable, is more limited.

So Dubai has concentrated on making itself business-friendly. Not only
has this seen the creation of the Dubai Media City free zone, but also a
willingness to allow expat workers home comforts - supermarkets stock
bacon, while bars outnumber mosques.

With year-round sunshine and tax-free salaries, it is not difficult to
see why Dubai has taken over from Lebanon as the region's advertising
hub. And it is these three points on the Middle East triangle, Dubai,
Saudi Arabia and Lebanon, on which the advertising market of the Middle
East pivots.

Dubai is where the advertising money is, while Saudi Arabia is home to
the bulk of consumers. And Beirut offers what little creative heritage,
and much of the home-grown talent, that the region enjoys.

Indeed, although the money is further down the Arabian peninsular
nowadays, a couple of major networks still centre their creative teams
on Beirut.

Grey's regional operation is headquartered in a mountain retreat just
outside Beirut, while both JWT and Impact BBDO's regional creative
directors are based in the city itself.

Yet most of the work comes from elsewhere in the network. Although the
civil war is long over, the Beirut economy has yet to sort itself
out.

Last February's assassination of the former prime minister Rafik Hariri
was a huge setback, while December's assassination of Gebran Tueni, a
campaigning editor and publisher, left much of the marketing and media
industry feeling under siege.

Dani Richa of Impact BBDO, who is both the managing director of the
Beirut office and the network's regional creative director, says: "On
the economic front, we have had a serious drop. We've had bad year after
bad year." He estimates that last year will have seen a 30 per cent drop
in business industry-wide.

Similarly pessimistic is Gabby Assad, the regional director of
Optimedia, who says: "Lots of people had started moving head offices to
Beirut. Lots planned to come and make it the hub, but with the
assassination of Hariri, the whole scenario changed."

Dubai, a four-hour flight from Beirut, offers far more stability.
Although occasional rumours surface, there has never been a publicly
acknowledged terrorist incident.

The press in Dubai - and, by extension, advertising creativity - is
relatively free. But self-censorship, rather than overt government
intervention, tends to be the key issue. Anything that might offend
cultural sensitivities is generally judged out of bounds. Questioning or
poking fun at the country's leadership is certainly out.

But Dubai offers far more freedom than neighbouring Saudi. The youth
daily newspaper Shams was recently suspended after publishing some of
the controversial cartoons of the Prophet Muhammad, albeit as part of an
editorial attacking the Danish newspaper that first ran them. It was an
issue that was to have a direct impact on other parts of the region.

When protesters firebombed the Danish embassy in Beirut, they also
burned out the offices of Team Y&R, Intermarkets and Mediaedge.

Yet even the most conservative of Arab consumers is changing fast
because of the influence of youth. Nearly 60 per cent of Saudi Arabia's
population of 25 million are aged under 25.

Jac Asmar, the managing director of MindShare Arabia, says: "The
consumer is changing because of the age of the population and it is
noticeable. The boys have nothing to do; the girls are frustrated
because they cannot do anything on their own. You see more and more
Saudi women without their abaya, and more and more Saudi boys outside
national dress."

Another major factor in speeding the change is the massive growth in
satellite TV. Pan-Arab networks such as the Dubai-based MBC primarily
target the large Saudi audience. Offering everything from Oprah to The
Simpsons (redubbed Al Shamshouns), the stations have given consumers a
strong taste for Western culture.

The same goes for oil-rich Kuwait, where adspend grew by an estimated 14
per cent to $435 million, according to Parc. In Kuwait's case,
the biggest factor in opening consumers' minds to the West was its 1990
invasion by Iraq, and its "liberation" the following year.

According to Said Zeineddine, the general manager of Horizon.FCB's
Kuwait office: "Things have changed since the invasion. They became
exposed to other influences. Because of satellite TV, you cannot really
control what they watch and what they see. Even the people who did not
go away became friends with Western culture. They are grateful and they
say loudly they are not ashamed of it. It's not shameful any more to
dress in jeans."

However, Kuwait's advertising market's growth has not tended to match
the boom of the rest of the country's economy - mainly because agencies
have not yet managed to persuade companies of the value of
advertising.

Matthew Dezzani, the general manager of Bates PanGulf, says: "There are
two types of clients: those who absolutely understand the role marketing
plays in the brand matrix, and those who don't fully understand what
marketing is. But there's been a trader mentality in the Gulf for
hundreds of years and people like me are not going to change that in
five years. All the creativity is geared towards selling."

Nawaf Jaber, the general manager of the local agency Graffiti Marketing
Communications, also believes the market is struggling to get clients to
pay a fair price. He says: "The clients in Kuwait are demanding on
service and quality, but don't like to pay for this."

It is the same issue in Egypt. Wadih Massaad, the managing director of
Grey Worldwide's Cairo operation, says: "A lot of local clients still
only want sales-generating campaigns. They want to see the money as soon
as possible. It's still tough to persuade clients of the purpose of
brand-building."

But not as tough as in Yemen, where many potential clients simply do not
understand what advertising is for. Mohammed Bin Humaid, the general
manager of the Sana'a-based Bin Humaid For Advertising & Marketing,
says: "People used to think advertising was free. They couldn't see it's
the gateway to business improvement."

Most agency bosses believe even greater potential lies elsewhere within
the region, and at its borders. Stability in Iraq will bring a landgrab
from agencies eager to be first to target its 27 million
inhabitants.

Many agencies are also looking east towards Persia and the massive
Iranian population. And in North Africa, beyond Egypt, the likes of
Algeria, Tunisia and even Libya also hold promise.

Samir Ayoub, the chief executive for MindShare in the Middle East and
North Africa, says: "Iraq is potentially a very promising market." Which
is clear from the media owners already racing in. The Beirut-based
outdoor company Pikasso is one of a number of companies already invested
heavily in Jordan and Iraq.

Completing the optimistic picture for the Middle East is Qatar, which
saw something like 28 per cent advertising growth last year. As the home
of Al Jazeera, which is about to launch an international
English-language news service (page 31), and the host of the Asian Games
later in the year, there is a huge amount happening in the relatively
small country, which has one of the world's largest GDPs per capita.

Anthony Ryman, the managing director of the Doha-based agency Grow,
says: "Qatar is the fastest-growing economy in the world. It's going to
be the richest country on Earth within two years."

With all those wealthy consumers, it is no surprise that Sorrell is
bullish about the Middle East.

ADVERTISING GROWTH IN THE MIDDLE EAST

COUNTRY 2004 (dollars m) 2005 (dollars m) % growth

UAE 634 904 43

Saudi Arabia 699 891 27

Egypt 445 570 28

Kuwait 382 435 14

Lebanon 276 267 -4

Bahrain 116 103 -12

Qatar 93 119 5

Jordan 76 108 42

Oman 72 103 44

All Arab markets 4,619 5,416 17

Table based on estimates from Pan-Arab Research Center.