Out­side and dig­i­tal me­dia ex­pected to emerge as win­ners

Arab News - - MEDIA - IAIN AKERMAN

Boosts to ad­ver­tis­ing spend, in­creased in­vest­ment and an em­pha­sis on im­proved com­mu­ni­ca­tion are all likely to ma­te­ri­al­ize over the course of the next few years as the projects be­gin to be re­al­ized.

“We have al­ready seen the pos­i­tive im­pact of these projects and oth­ers on over­all me­dia in­vest­ments in Saudi Ara­bia,” said Faisal Shams, manag­ing di­rec­tor of me­dia agency OMD Ara­bia.

“We ex­pect this trend to be even more pro­nounced in 2018. The 2020 trans­for­ma­tion plan in­cludes a lot of ini­tia­tives and projects that have yet to be an­nounced to the pub­lic.

“It is im­por­tant to note that a lot of the big projects are be­ing ad­ver­tised on a in­ter­na­tional scale, specif­i­cally in the GCC, the US, the UK, France, Ger­many, China and Ja­pan. In other words, the Saudi me­dia mar­ket isn’t the only ben­e­fi­ciary of these devel­op­ments.”

The Red Sea project aims to turn 50 Saudi Ara­bian is­lands into lux­ury tourism des­ti­na­tions, while Neom will be a $500 bil­lion sci-fi city on the King­dom’s Red Sea coast, re­plete with ro­bots, biotech­nol­ogy and ad­vanced man­u­fac­tur­ing. Both are part of a na­tional push to di­ver­sify the coun­try’s econ­omy and re­duce de­pen­dence on oil.

“The launch of such huge ini­tia­tives will help to free the King­dom of de­pen­dence on oil ex­ports and re­gain the trust of global and lo­cal in­vestors,” said As­saad Kas­sis, gen­eral man­ager of UM Saudi Ara­bia. “Along with a clear mes­sage of mod­ern­iz­ing the King­dom, this change will im­pact the econ­omy pos­i­tively, which will lead to an in­crease in ad­ver­tis­ing spend.”

Any in­crease in ad­ver­tis­ing spend will be warmly wel­comed. A fal­ter­ing econ­omy com­bined with bud­get cuts, par­tic­u­larly within gov­ern­men­tal sec­tors, has af­fected ad­ver­tis­ing spend and led to a se­vere down­turn in the ad­ver­tis­ing mar­ket.

In Septem­ber, me­dia agency Zenith pre­dicted that to­tal ad­ver­tis­ing spend in the King­dom would drop by 35.7 per­cent this year, with fur­ther falls ex­pected in 2018 and 2019. These fig­ures are not uni­ver­sally ac­cepted, but the de­cline in ad­ver­tis­ing spend has nev­er­the­less been se­vere.

“This comes on top of the 30 per­cent drop be­tween 2015 and 2017,” said Shams. “But we’re see­ing more pub­lic spend­ing on key projects at the end of this year, so the ex­pec­ta­tion is that we’ve bot­tomed out.

“Next year should be flat or pos­si­bly marginally pos­i­tive. Projects like Neom will help boost in­vest­ments but we will also need pri­vate-sec­tor busi­nesses to add their weight to the mo­men­tum and stim­u­late de­mand as the econ­omy re­cov­ers.”

The big­gest ben­e­fi­cia­ries are likely to be out-of-home (OOH) and dig­i­tal me­dia, which is to be ex­pected given Saudi Ara­bia’s po­si­tion as one of the most dig­i­tally en­gaged so­ci­eties in the world.

“So far, we have wit­nessed a stronger fo­cus on OOH and dig­i­tal (par­tic­u­larly so­cial me­dia), fol­lowed by TV, ra­dio and print,” said Shams. “The an­nounce­ment of these projects is of­ten driven by the need to cre­ate an im­pact and al­ter pub­lic per­cep­tion, hence the re­liance on OOH for

DUBAI: The im­pact of the Red Sea Project and the fu­tur­is­tic city of Neom on Saudi Ara­bia’s ail­ing ad­ver­tis­ing in­dus­try has been im­me­di­ate and could be far-reach­ing, in­dus­try com­men­ta­tors told Arab News.

im­pact and dig­i­tal for pre­ci­sion tar­get­ing and en­gage­ment.”

This will be good news for firms such as JCDe­caux, one of the largest OOH op­er­a­tors in the coun­try. It has been op­er­at­ing in part­ner­ship with the Gen­eral Author­ity for Civil Avi­a­tion to han­dle ad­ver­tis­ing at the King­dom’s 26 air­ports since Oc­to­ber 2010.

“In­no­va­tive projects such as Neom of­fer an op­por­tu­nity for early plan­ning with reg­u­la­tors as they are at the ini­ti­a­tion phase,” said Bas­sam Alau­jan, manag­ing di­rec­tor of JCDe­caux Saudi Ara­bia.

“De­vel­op­ment of busi­ness mod­els at such a phase will al­low com­pa­nies like JCDe­caux to in­tro­duce global best prac­tices and the best prod­ucts. Com­pared to what is avail­able to­day, such devel­op­ments will cre­ate a com­pletely new ad­ver­tis­ing ex­pe­ri­ence for ad­ver­tis­ers and the au­di­ence.

“There is no doubt about the po­ten­tial im­pact of ini­tia­tives such as Neom and the Red Sea Tourism Project. They chal­lenge the norm.”

Alau­jan be­lieves, how­ever, that any ben­e­fits from Neom and the Red Sea Project will be shared across the board.

“Im­pact may vary but the win­ners will be the most in­no­va­tive so­lu­tion providers,” he said. “As devel­op­ments take place, there will be greater de­mand for qual­i­ta­tive and in­no­va­tive modes of com­mu­ni­ca­tion.

“In or­der to re­main pertinent, me­dia chan­nels must be for­ward-think­ing. Those that re­main ag­ile will def­i­nitely reap the re­wards of the King­dom’s ini­tia­tives.” It is hoped that the projects will pos­i­tively af­fect the qual­ity of the King­dom’s ad­ver­tis­ing, as well as the econ­omy, with the coun­try full of young tal­ent want­ing to be part of the trans­for­ma­tion of their coun­try.

“They (the projects) will def­i­nitely turn things around from an eco­nom­i­cal point of view as they will at­tract tal­ent and in­vest­ments to the re­gion,” said Kas­sis.

“It is a clear mes­sage that the King­dom of Saudi Ara­bia is chang­ing.”

Visi­tors watch a 3-D pre­sen­ta­tion dur­ing an ex­hi­bi­tion on ‘Neom,’ a new busi­ness and in­dus­trial city to be built in Saudi Ara­bia. In­set: As­saad Kas­sis, gen­eral man­ager of UM Saudi Ara­bia. (Reuters)

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