Meeting the Market’s Growth Need
After a decade of sustained oil-based growth, Saudi Arabia is at a transition point. Global oil prices have fallen and the Saudi economy has slowed during the second half of 2015. This trend is expected to consolidate in 2016 before the recovery in oil prices rises again and business picks up in the year to come. Domestic economic activity in the first half of 2015 was quite resilient. Government spending will remain the cornerstone of the economy. Spending on wages and other benefits is likely to continue growing, lending support to private consumption and associated sectors, such as trade, transport, and housing, which will continue but at a reasonable pace.
As for the advertising investment trends, and according to IPSOS 2015 figures, total advertising investment in KSA media accounted for US $ 1.4 billion as compared to US $ 1.5 billion in 2014 (a 6.7 % decrease) while Pan Arab media total advertising investment accounted for US $ 8.7 billion in 2015 as compared to US $ 8,1 billion in 2014
(an increase of 7.4%). We hope that 2016 will maintain the same investment across the sectors.
At the business level, advertising agencies should call for clients’ review of current marketing mix solutions and the latest changes and trends in the macroenvironments of the Kingdom in order to define realistic and achievable objectives for 2016; Also, this will be necessary to implement an effective marketing mix strategy to preserve their competitive advantages by defending their current market share status and continue attracting new customers. Clients should conduct more customer satisfaction surveys to know the state of mind of their customers in relation to their products and services. Agencies are invited to be a marketing communication consultants for their respective clients. The most urgent need for both advertising agencies and clients in today’s context is to keep the current customers satisfied by activating their CRM process and innovate to stay competitive.
Internally, we hope that international Agencies don’t repeat the scenario of 2008/2009 by downsizing if their forecasts are not met.
On agencies’ focus and strategy
The power of the Internet is limitless. In most cases, the Internet is the first place people will look to find information about a business, and everything from design to content will have an impact on potential clients and customers. The recent and rapid increase of Internet culture and new communications technologies in the GCC countries in general and in Saudi Arabia in particular is one important facet of changes in contemporary social life.
Consumers in Saudi Arabia are more aware of what’s happening in the region and worldwide and are becoming more demanding and selective when it comes to buying products or seeking services. Today’s client is seeking the most cost effective and efficient ways to reach their targeted segments within the Kingdom. Consequently, proposing an effective and efficient offline and online media mix plan to achieve campaign objectives.
For sure, digitisation is gaining momentum compared to offline. However, it has a long way to go. No exact figures are available to quantify the total advertising investment on online and social media channels within the Kingdom.
We hope that international agencies don’t repeat the scenario of 2008/09 by downsizing if their forecasts are not met.