Ad firms face tough ride, says Ghossoub
Dubai-based Joseph Ghossoub is one of the leading advertising industry figures in the region and around the world.
Ghossoub (pictured above) has been Chairman and World President of the International Advertising Association since March 2006 and was voted Man of the Year 2007 by Campaign magazine’s Middle East edition.
He joined Team Advertising as Managing Partner and Chief Executive Officer in 1993.
Four years later he and his partners formed The Holding Group, which has grown to become one of the most successful Arab communications companies with offices throughout North Africa, the Gulf and the Levant. It is the parent company of Team/Young and Rubicam, Intermarkets Advertising, Asda’a Public Relations, mediaedge:cia and Wunderman.
In 2003 Ghossoub became a board member of broadcasting group Dubai Media Incorporated, which is owned by the Government of Dubai. He played a significant role in the establishment of the Emirati-Lebanese Friendship Association.
Spending on advertising in the UAE crossed the Dh3.5 billion-mark in the first nine months of 2007 for the first time. Has the advertising industry here reserved its spot on the world stage?
Yes. But the level of spending is lower than the worldwide average – we are still far from where we should be. The average level of spending in Europe is twice what it is here and in the United States it is three-and-a-half times our figure. The UAE’s advertising industry has been growing at a steady rate of 15 to 20 per cent. This is because of the growth in the economy – increased advertising is a result of economic boom.
What could be done to move the UAE market closer to the worldwide average?
The thinking patterns of industries in the UAE are still a major challenge. The different sectors have been changing, though, from being short-term to mid-term spenders. But things are still not as they should be. Everybody realises it requires strategic planning and solid presence in order to compete.
What makes you believe things will change?
Earlier it used to be easier. The population, media, awareness, business – all were smaller and simpler. Today we have a dynamic city and country. The consumer has more variety to choose from. Advertising is an educational tool but there is a lack of understanding. Many people don’t know advertising is the biggest contributor to any sector. If you do not advertise, how would you know?
But with almost all sectors of the industry booming in the UAE why is the advertising growth rate below international levels?
True. But Dubai is now changing the way the Gulf has been operating for years. Remember there are people who come and stay temporarily and then leave. Those who stay short-term or mid-term do not have the same attitude to advertising as those who stay for a longer period. Once consumers decide to stay long term they start thinking about many other things – a product, value for money, service and investment for the future. We see things changing. Abu Dhabi and now Qatar, Bahrain and Oman are following suit. The Gulf is becoming a settled market for investors, consumers and end users.
Do you think spending on advertising outweighs the benefits in the UAE?
If the benefits were not there we would not see a continuous flow of advertising. There have been very few cases where money has been wasted on advertising. Advertising is a function of sales and the whole marketing cycle.
Different polls give conflicting results. But several recent studies revealed that advertising in the UAE was failing to build a vital bond between brands and consumers. How true is that?
You cannot please everybody with a single ad. Advertising is targeted. If an ad does not appeal to someone, this does not mean it does not appeal to anyone. Nothing is wasted in advertising. Everybody has freedom of choice. We are not talking about opinions but reactions. That is why some products make it and others do not. It all depends on what you are focusing on and what you are targeting. Consumers can get confused. Advertising is there to highlight the differences. Advertising has to be focused, targeted and researched.
What role does the media play in building better brand awareness and loyalty?
Media and advertising are two faces of the same thing. The media has a bigger space to get the consumer thinking. They are very much interlinked.
It has been said some advertising companies do not pay attention to several sectors of the society. Many people under 35 – who comprise more than 60 per cent of the population of the UAE and other GCC countries – believe advertising exists to encourage them to consume, leaving them with no savings. What would you say to them?
If an advert does not cater to 60 per cent of the population then what is it doing? Advertising firms are there to cater to the population. If we do not do this, how can we be an advertising company? As for the second part of the question, nobody forces anyone to buy something. If a consumer’s needs exceed what they can afford then that is their problem and putting the blame on advertisers is not fair.
The dirham is linked to the falling dollar, which has put both consumers and advertisers under severe pressure. How do you expect consumers to spend more while the cash in their pockets is losing value?
Addressing the problem of increased pressure on salaries is a matter that is beyond advertising and advertisers. Advertising is only a function of sales. We are going to face an interesting and challenging year because of the fall in purchasing power, rising inflation and the weak dollar. Disposable income will fall. Now, whatever disposable income a consumer has is where the pressure will be mounting. If inflation is not dealt with and reaches 12 to 18 per cent then consumers will lose 15 per cent of the value of their monthly income. That is why government sector salaries have been increased by 70 per cent. The private sector has to consider this issue , even if it does not offer the same percentage.
What are your expectations for the advertising industry in the UAE and the Gulf in the mid- to long-term?
Times will be more difficult for smaller players in the market. If tough times come we must be responsible and make them pass smoothly. There is always a good way to look at things. Problems happen and we have to cope, maintain balance, carry on with what we are doing, and give people what they deserve. But at the same time, I am asking clients, consumers and firms to look at this as a national, rather an individual, issue since it is about all of us. Everybody is involved in one way or another, so rather than nagging about it and doing nothing, it is time to act.
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