Conversations with an advertising Don
Ramzi Raad, chairman and CEO of TBWA/RAAD, speaks to Kipp about the region’s industry, the Lynx debacle and why he expects digital advertising to boom.
May 21, 2009 9:16 by Dana El Baltaji
Kipp: And when you say the UAE are you combining both Dubai and Abu Dhabi?
May I draw a footnote here?
Raad: Most of the regional agencies have their head offices in the UAE. And we tend to forget that our business is fuelled by the campaigns that we place not only in the UAE but all around the region. Our figures are based on our activities in all these markets. Saudi is a very large market. Egypt is a market with a very big population. So we should never draw a conclusion by saying that the ad spend in the MENA region is shrinking because in the first quarter of 2009 there was a 17 percent drop in the UAE advertising market. In contrast, Qatar posted a 28 percent growth, Kuwait 26 percent and Oman 12 percent in the same period.
Kipp: So you’re basically saying that all that growth ultimately fuels the head office here.
Raad: It inputs. We need to look at the complete cake. The complete cake is advertising spend in all of MENA’s markets.
Kipp: How about the effect of the crisis on the advertising industry; do you think it will change the way that everyone does business?
Raad: In periods of crisis, advertisers are very picky on results. They want to spend money where they can see results. So there is a sort of shift from brand image advertising, into advertising that helps products sell. This is resulting in a switch toward digital media. I don’t mean traditional digital advertising, like banners that intrude on your internet surfing, but dynamic campaigns, which advertisers can use to interact with their brand, product, consumers, users and so on. More and more advertisers are using it to generate a dialogue with the consumer.
And when I say digital media it’s not a switch from the major medium, which is television. When you’re talking about moving consumer goods, television remains to be the major medium. Globally, television still commands like 38 percent of the advertising spend. In our part of the world, television has a share of 43 percent of the total ad spend in the MENA region.
But online advertising in this region represents only 1 percent; this will change. Globally, internet advertising is commanding 10.2 percent. It’s estimated that by the year 2020 the internet will take 80 percent of the total advertising spend globally.