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In the vibrant landscape of Saudi Arabia's advertising industry, where agencies are expanding their reach amid the euphoric business mood, ArabAd engages in a conversation with Nabil Moufarrej, the managing director of Horizon FCB KSA, who paints a vivid picture of the dynamic and promising future that lies ahead for Saudi Arabia.
How would you describe the current general ad business mood in Saudi Arabia with so many agencies expanding their footprint to the kingdom, ready and hungry to seize every opportunity presented by Saudi Arabia’s booming economy?
I guess it is obvious that the overall mood In Saudi Arabia is euphoric to say the least, and for very good reasons!
The economy is growing at the speed of light; there is a lot of expectation on modernization and on a bright future. HRH’s vision 2030 has set the benchmark for the transformation of a whole nation! And he rallied everyone around this vision, especially the youth.
Young, eager and very well-educated Saudis are in leading positions in governmental entities. They’re knowledgeable, they are ambitious, they want to succeed and they want their entities to succeed, they want the best for themselves and their country… They are proud and they CARE.
This obviously is impacting our industry!
When the economy flourishes, the advertising sector does too!
The advertising industry in Saudi Arabia has witnessed remarkable growth and transformation in recent years. And as we speak, many advertising agencies are expanding their footprint in the country, and local agencies are mushrooming.
The business mood in the advertising sector is characterized by optimism. And the feel is: “Saudi Arabia is happening and there is business for all.”
Any fears/apprehensions with regard to the Saudi increasingly crowded agency landscape?
No fear at all! We are creative agencies and our role is to find creative solutions to our clients. So, our daily bread and butter is to develop unconventional solutions for challenging situations. We will find our way! So again, no fear.
That said, there is a need to understand the market, analyze it and find pre-emptive solutions to situations that might pop up in the near future.
“There is definitely business for all, but there are indications that Saudi companies are starting to skew towards local Saudi agencies. In the medium term, it might affect multinational companies.”
How do you see the flood of rival companies affecting your business?
As I said before, having agencies expanding their footprint and local agencies growing in number, are good signs; signs of a healthy industry and economy.
Competition is good, it could become fierce, it is fine, as long as it does not mean getting into a price war loop, and moving into the cycle of “getting the business no matter what, we will fix the negative consequences later on” and then get into the vicious and ugly cycle of “low fees means fewer performing people and less expertise, and subsequently bad creative product”. By doing so, we will end up ruining a very promising industry, in a very promising market.
There is definitely business for all, but there are indications that Saudi companies are starting to skew towards local Saudi agencies. In the medium term, it might affect multinational companies.
A solution could be creating joint ventures with Saudi local companies, or to increase the Saudization ratios in multinationals beyond the 50% requirements… Still need to be seen.
Where do you see the biggest opportunities laying for Saudi-based ad agencies? Is it within the tourism sector, is it throughout award-winning creative campaigns, or is it in understanding new tech and helping brands navigate culture… And what about diversity, equity and inclusion? Isn’t there still much work to do on that front?
Many burning topics in one question!
First off, the biggest opportunities lie within the tourism sector and the “destinations” in Saudi– so many wonderful locations in Saudi that we never expected it even existed. Like in the South (Al Souda for example). This is meant to put Saudi Arabia on the world map, and turn it into a world destination.
The growing economy means more expats inflow, so this may mean that another sector, Real Estate, could represent another big opportunity;
A subsequent third one would be the automotive sector and then the banking sector. Most of the other sectors will follow, like Transport, Telco, Hospitality etc.
Secondly: Understanding new tech and using it to enhance our creative solutions and offering, to our clients, being culturally sensitive and knowledgeable and winning awards, are ALL part of the mix of a winning agency.
For the last bit, Diversity, Equity and Inclusion, I guess that like IPG and FCB, most multinational companies have implemented this and it is included in their “Code of Conduct” and all abide by them.
I am confident that with time, it will become the standard practice in local agencies.
What specific struggles or challenges are unique to KSA ad market? And what is its most interesting aspect?
The challenges that are unique to Saudi in my opinion are the following:
The high percentage of Saudization in our industry (50% in 2024). This should not be a problem in view of the industry growth. The challenge lies somewhere else: Most Saudis were not interested in advertising till recently, so it is hard to find qualified people to work in our field. That said, you will find the sharpest minds, best communicators and most knowledgeable ones, working in governmental or para-governmental entities.
The office hours: very challenging topic for Saudi nationals. It seems that they would like to work at their own pace and timing. It is known that they stay up very late every night, which makes it a challenge to join their colleagues on time.
The language usage– in many instances the communications (by emails or WhatsApp) and presentations need to be in Arabic, which is normal, but could be challenging for some multinational companies.
The cultural considerations at large could be challenging for those who haven’t lived in Saudi for a long period of time. Understanding local customs and practices is essential for foreign businesses.
The legal and regulatory environments are a bit stiff.
What do you think agencies need the most to succeed in a market like Saudi Arabia?
To succeed, the advertising agencies need to attract and hire skilled talents by offering good remuneration packages; developing intense training programs for Saudi employees; and always keep on the look.
Last but not least, never forget that Saudi Arabia has a rich cultural heritage. Therefore, agencies are, and should continue, incorporating Saudi values into their communication campaigns.
Brands, more and more, are developing their messaging matrix to organically engage with Saudi consumers, showcasing a deep knowledge of the local culture. This approach builds credibility and trust between the brand and its consumers.
Do you see Saudi Arabia stealing the show in the region mainly over Dubai throughout the next 10 years? And how would you picture the kingdom in 10 years from now?
Having lived in Dubai and Riyadh, I know that both countries have delivered what I can call “economic miracles” not only in terms of transformation, but also in terms of speed of transformation!
I feel and hope that both KSA and UAE will play complementary roles to set the benchmark for the whole Arab world, and maybe beyond.
The Kingdom is moving at such a high speed and pace that it is very difficult for me to visualize how it will be in one or two years, let alone 10 years.
But what I can safely say is that based on HRH, the ME will become the new Europe of the world and I am confident that people from around the world believes him, trusts him and respect his vision. This is a clear indicator and a “way-in” for you to picture the Kingdom 10 years from now.
What role do you see your agency playing in the overall Saudi Vision 2030?
Now, when it comes to Alafak, and with all humility, every time we develop a creative solution for any of our clients, we are in a way promoting His Royal Highness Vision- Vision 2030. Every time we solve a challenge facing the brands we take care of, we are adding a “mud-brick” to the fabulous Vision 2030 monument. Every time a Saudi colleague joins our family, we are delivering on the V2030 Human resource requirements.
