Economic boom to help ad revenues in 2008

(RAMI ELJUNDI)             

The advertising industry will experience the same rhythm of growth in 2008 as the previous year with the main drivers being the real estate and financial sectors.

Television may no longer be looked at as the most effective advertising medium, at least in the UAE, where other media, such as print, outdoor and radio, seem to have more of an impact on consumers and end-users. However, the shortage of talent may remain a burden for many advertising agencies. The challenge lies in finding talented Arab-speaking professionals. There needs to be training courses available in the UAE to train young talent for the advertising sector.

Avishesha Bhojani, CEO of the newly branded BPG (pictured above) – formerly Bates Pan Gulf Advertising – speaks to Emirates Business on the issues facing the region’s growing advertising industry.

Avishesha (Avi) Bhojani has been in the advertising industry for 27 years, the last 19 of which he has spent in the Gulf. His company, which has been growing since 1991, just re-branded to BPG from Bates Pan Gulf.

He has contributed to the conceptualisation and implementation of Dubai Shopping Festival and Dubai Internet City.

A businessman who can talk business from philosophical, intellectual and social angles, he is an alumnus of the elite Indian Institute of Management, Bangalore, and India’s National Institute of Design.

He is a founder and Managing Director of the Dubai International Academy and founder and general partner of Innoventure Partners. He is the CEO of the BPG Group, which covers advertising, public relations, design, media, digital and specialist marketing services.

Will the advertising industry experience the same pace of growth in 2008 that it has been witnessing over the past three years? If so, how?

This year will see a hike in the money spent on advertising in the UAE, which will grow at between 25 and 35 per cent. The reason for which is escalating costs. Not all advertisers will keep the same frequency or size of budget. Some may pull back due the current market situation.  

What will be the major drivers behind such a rise in spending? 

The two main drivers of advertising in the UAE today are the real estate and financial services sectors. The need to market services is always there. The cost is becoming higher due to the greed of real estate developers. The master developers want a high yield and that is why they increase the cost. 

Why so?

Most properties are purchased by intermediaries who are neither consumers nor end-users themselves. They buy the property then put it up to rent or buy to re-sell. If you buy property, you want a return that ranges between seven and 10 per cent. Ten years ago, when the Greens area was completed, you could get a 1,000 square feet apartment for Dh500,000, which would rent for Dh50,000 per year – a 10 per cent annual return on investment. Today, the cost of the same property is Dh1.5 million and the rents have escalated proportionately.

Does this apply only to Dubai or the whole UAE?

Well, Dubai and Abu Dhabi are the main markets in the UAE. But in Abu Dhabi there has been a genuine gap between demand and supply. In Dubai, which is the key driver of growth, it is the greed of the real estate developers that has been leading to inflation. That is why the market needs to be regulated. 

So what will you tell advertisers and ad agencies, whose final target is the end-user?

People in the business need to reduce their greed. What goes around comes around. The rate at which we are going, it is almost like we need to remind ourselves: ‘Do not kill the goose that lays the golden eggs’. If we become greedy and want more golden eggs, Dubai will lose its attraction in the eyes of talented new people.

Which media or means of advertising do you see as the best to get the message across effectively?

Outdoor can fulfill the basic role of communicating. It can remind the consumer of the brand but cannot provide that emotional chemistry to entice a purchase. You cannot disseminate all information using outdoor ads. That is why print is a more credible medium. In print ads, consumers tend to trust the message more.

How is it that you say print is the most credible while other media observers claim TV is number one?

Not in the UAE; therein is the challenge. The lifestyle in Dubai and Abu Dhabi is affecting the TV viewership in the UAE… because people have no time. Did you get a chance to watch TV yesterday? If so, how long? But every morning, the consumer will see newspapers in their office. You will get the chance to listen to the radio while you are driving. In the future, with the way things are going here, print, radio and outdoor will go at a faster rate and be more efficient in reaching the target audience.

Media and advertising observers believe in the importance of branding. Your group witnessed a re-branding operation lately. How challenging can re-branding be?

You need to be sure your core values are retained, as well as all the positive aspects of your history. The real challenge in re-branding is to retain all the good old stuff. In the past, you created a brand and you thought it was created for life.

Today, the life of the visual identity stays for up to seven years, but global trends change and shift. In today’s context, consumers’ minds can accept change faster and easier than they used to before. Perceptions and realities change regularly.

Fujairah and Ras Al Khaimah are experiencing a boom, especially in the real estate and tourism sectors. Are advertising agencies doing enough there?

Not really. The consumers live in Dubai and Abu Dhabi. Media gets consumed where the consumers are, not necessarily where the products are. Advertisers work in markets where the consumers are based, not in places where they go to consume.

What is the role the media and advertising agencies can play to align consumer focus towards what the advertised message is all about?

Be objective. Advertising messages can be confusing, unrealistic and misrepresenting of the facts. Then again, if an ad does not pertain to one segment of society that does not mean it does not pertain to anybody else.

You analysed it objectively, but how it can be addressed fairly?

Advertisers need to keep their promises. When you promise, you are optimistic about what you can do. While making money, for whatever reason, you do not deliver according to the promise. But when you succeed in fulfilling your promise, you build trust.  

What is the industry’s key challenge for 2008 taking into consideration the current rising inflation in the UAE? 

Our industry has to adjust to ensure our gross revenues are sustained, since our profitability may go down if we do not add value.

And what strategy can advertising agencies consider?

Advertisers and advertising agencies need to be clear about what they are trying to convince the consumer to buy. Clients need to believe that by staying with the product they are getting value. Also, there is a bunch of talented people out there we need to attract for better quality. 

Talking about talents, there has been a lot of talk about it but with no specific details. What is the problem?

The issue of talent is the biggest challenge. The biggest gap is the shortage of Arabic-speaking talent in public relations and communications. No one is interested in training and professionally trained people are rare. 

At the end of the day, if there is a high demand for professional performance, delivery and satisfaction, why is finding talented people such an issue?

Let me put it bluntly. Historically, the advertising training for Arabs used to happen in Beirut. Today Lebanon is in trouble. In Dubai, no one trains. Dubai wants ready-made people. If you want good people of Indian origin there is enough training happening in India. If you want good people of British origin, there is enough training in Britain. But for native Arabs, that is not the case. Dubai needs to invest in training talented Arabs with potential. And if that is happening at all, it is not at the pace that can satisfy the demand and growth acceleration in the UAE. Why should people get trained in Lebanon, Jordan or Egypt if they will work in Dubai or elsewhere in the UAE?

So what should be done about training Arab talent?

Investment in advertising and public relations training is the key. Last year I hired six fresh native Arab graduates from the journalism and marketing programme at the American University of Sharjah and I trained them. Even though at the end of the year two of them left, I still have four and it is still worth it. Even if I had ended up with two at the end, it would have been passable.