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Azhar Siddiqui, Managing Director Mediaplus Middle East, shares his outlook on Dubai ad business. Despite the optimism and positive general mood prevailing, the market has become saturated and quite challenging, yet filled with tremendous opportunities, says Siddiqui.
How has the advertising industry in Dubai evolved over the past decade, and how would you describe the current general ad business mood?
Dubai's advertising industry has propelled very rapidly towards digitalisation, data management and business intelligence over the past decade. Dubai is at par or maybe even ahead of leading world markets in terms of digital transformation specifically within marketing and advertising. Technology has played a pivotal role in shaping the advertising industry in Dubai. The adoption of advanced technologies such as artificial intelligence, augmented reality, and virtual reality has allowed advertisers to create immersive experiences and personalised messaging. Data analytics and insights-driven approaches have become crucial for targeting the right audience and optimising campaign performance.
Today, advertisers and agencies work intensively with data and technology to drive performance-based goals. Dubai is also globally recognised as a creative hub, and Dubai agencies have consistently proved themselves at all major international awards. Their ability to compete on an international stage and win prestigious accolades demonstrates the high level of creativity, strategic thinking, and innovative approach prevalent in the Dubai advertising industry. These achievements serve as a testament to the talent and capabilities of Dubai-based agencies in delivering outstanding and award-winning campaigns.
Generally speaking, the current ad business mood in Dubai is very optimistic and filled with energy. Dubai serves as a hub for the Middle East region, which is one of the fastest growing regions in the world, both economically and demographically. This positioning contributes to the positive mood within the advertising industry.
The region's rapid economic growth, driven by sectors such as technology, e-commerce, finance, and tourism, presents vast opportunities for advertisers and agencies in Dubai. The region's expanding population, diverse consumer base, and increasing purchasing power further enhance the industry's prospects. Advertisers and agencies in Dubai are aware of these opportunities. They are motivated to leverage the region's growth potential, tap into emerging markets, and create campaigns that cater to the evolving needs and aspirations of audiences in the Middle East.
This buoyant economic and demographic context adds to the positive business mood, inspiring innovation, collaboration, and a forward-thinking approach within the advertising industry in Dubai.
What are some of the biggest challenges facing advertisers in Dubai today, and how do you think these challenges can be overcome?
Saturation and Competition: Dubai's advertising market is highly competitive, with numerous advertisers vying for consumer attention. This saturation makes it challenging for advertisers to stand out and differentiate their brands. Advertisers are aggressive in their demands in terms of deriving the maximum value out of agencies which leads to heavy competition amongst the advertising agencies. Today, the competition comes not just from other agencies but also from new marketing verticals like influencers, content creators, e-commerce channels and more. Advertisers are bypassing agencies to work directly with influencers and content creators which is taking away the revenue that typically would pass through the agency.
Technology is also enabling independent freelancers and individuals to work directly with brands and create campaigns almost individually or through minimal collaboration with other freelancers.
Evolving Consumer Behaviour: Consumer behaviour is continually evolving, driven by technological advancements and changing societal trends. Advertisers need to stay updated on these shifts and adapt their strategies accordingly. Investing in consumer research and technology to drive data insights is expensive. These investments must be made by agencies but the value creation from these investments is often slow. Advertisers are used to getting these insights from agencies for little or no money, which almost sets an expectation amongst clients that strategy, data and insights are supposed to be provided by the agencies for free.
Ad-blocking and Ad Fatigue: Ad-blocking technology and ad fatigue have become significant challenges for advertisers worldwide, including in Dubai. Consumers are increasingly using ad-blockers or experiencing fatigue due to the sheer volume of ads they encounter.
Regulatory Compliance: Advertisers in Dubai need to navigate local regulations and ensure compliance with advertising guidelines. Dubai has specific rules governing advertising content, particularly related to cultural sensitivities, religious considerations, and legal requirements. Advertisers should thoroughly research and understand the regulations, working closely with legal advisors and local partners to ensure their campaigns adhere to the guidelines. Building strong relationships with local authorities and being proactive in addressing compliance concerns can help advertisers mitigate risks and maintain a positive brand image.
Measuring ROI and Effectiveness: Demonstrating the Return On Investment (ROI) and measuring the effectiveness of advertising campaigns can be a challenge for advertisers. Establishing clear campaign objectives and defining Key Performance Indicators (KPIs) aligned with business goals is crucial. This is not easy as it requires huge investments in technology and SAS from both sides – agency and the advertiser. The ambition is very strong, but the execution often falls short for lack of investment or expertise from one or both sides.
“Dubai is at par or maybe even ahead of leading world markets in terms of digital transformation specifically within marketing and advertising.”
How do you ensure that your agency remains at the forefront of innovation in Dubai's competitive advertising landscape?
We are uniquely fortunate to be one of the largest independent international agencies in the world, and in Dubai. We are the only large privately-owned global network which means that we remain invested and committed in the success of our agency which is reliant directly on the success of our client partners. We work hard to ensure that we stand out from other agencies with our unique combination of integrated services, global network, independent ownership, innovation focus, collaborative approach, and sustainable mindset. With our "House of Communication" concept, the agency seamlessly brings together various marketing disciplines to offer comprehensive solutions. Our extensive global presence ensures localised expertise and resources. Being independent allows us to prioritise client needs and make agile decisions.
Finally, our talented people are the driving force behind our success. Their expertise, creativity, and dedication are the key ingredients that fuel our innovative campaigns, exceptional client service, and industry-leading solutions. We recognise that our people are our greatest asset, shaping our achievements and setting us apart in the competitive landscape.
If you can change one thing in the way advertising business is led in Dubai, what would it be?
There are two things I’d suggest:
- Re-look into the agency compensation structure
Perhaps we need to re-look at the way the agency compensation structure is right now. We should consider moving from the traditional retainer or media fee-based model to a mix of cost-covering retainer plus a performance-based bonus. This approach promotes transparency and aligns incentives between clients and agencies. A performance-based payout would allow agencies to be rewarded based on the actual impact and results achieved, encouraging them to deliver exceptional outcomes. Meanwhile, a fixed retainer would ensure agencies' resource costs are covered, providing stability, and enabling them to allocate resources efficiently. This dual approach fosters a fair and mutually beneficial partnership, driving accountability, innovation, and long-term success for both clients and agencies.
- Re-think pitching processes
Creative and media pitches are usually an unpaid task for agencies in the region. The selected agencies spend quite a while working on ideas, strategies and creative concepts that either never get used or can be used as a free shopping list by advertisers.
Experience from other markets, including parts of Europe, shows that agencies do get paid for their pitching efforts - at least with a little compensation for the hours spent internally. This helps show appreciation, if not choice, shows a whole new level of relationship between agency and advertiser from the start, and makes agencies more likely to show the effort of participating in pitches.
