Economic development in the Middle East is extremely uneven.
However, two factors make the region attractive to marketers and media
owners from other parts of the world.
The first is oil. Although some Middle Eastern states are now
diversifying their economies to avoid over-reliance on oil, the wealth
generated by black gold has led to a higher standard of living in the
Middle East than in most other non-Western economies.
The second is ethnicity. With language and religion uniting Arabs from
North Africa right across to Saudi Arabia, it is possible to devise a
cost-effective pan-regional media strategy to complement or drive
activity in local markets.
Although ethnicity unites the Pan-Arab family, it is crucial to
understand the fault lines that divide the region, Mike Readman,
Universal McCann's network director, Europe, Middle East and Africa,
Readman, who has just returned to the UK after a lengthy stint in
Bahrain, identifies North Africa (Morocco, Tunisia, Libya), the Levant
(Egypt, Syria and Lebanon) and the Gulf (Saudi Arabia, Qatar, Bahrain
and the United Arab Emirates) as the key sub-regions.
Although Egypt vies with Saudi Arabia for regional leadership and has an
aggressive media programme, a combination of widespread poverty and
institutional corruption have reduced that market's appeal to foreign
investors. Likewise, the North African region is too underdeveloped to
make it a priority.
Instead, Samir Ayoub, the Dubai-based managing director of MindShare
Gulf, says: "The Gulf region remains the market with the most
potential." Narrowing it down, Readman says the key to regional success
for marketers in the near-term is Saudi Arabia, which has a wealthy,
young population of 20 million. Although Saudi Arabia's economy is not
growing very fast at present, this population compares favourably with
the combined 3 million to be found in Bahrain, Qatar and the UAE.
Breaching Saudi Arabia is not easy, however. As a strict Islamic
country, western businesses need to show great sensitivity. "It is vital
to understand Arab culture and how the Arab consumer behaves," Ayoub
says. In particular, local custom dictates a sophisticated approach to
targeting families and women.
Clients targeting Saudi Arabia also need to understand the logistical
difficulties, Readman says. "Within Saudi Arabia, there are cultural
differences between Jiddah (west), Riyadh (north) and Dhahran (east).
Companies need to appreciate the distinctions between the three and that
they are divided by hundreds of miles of desert."
Although Saudi Arabia is the big prize, most western companies manage
their regional strategy either from the progressive Emirate of Dubai or
Bahrain (home to Coke's regional office). Both provide easy access to
Saudi and have liberal environments for outside investors. Ayoub says:
"Dubai is the best place for international clients to have their
regional office and the vast majority are based here. The facilities are
good, the city is booming and the location of Dubai is excellent from a
strategic point of view."
The Gulf States have also made efforts to woo companies with tax
Dubai, anxious to position itself as the Middle East's commercial and
new-media capital, has recently opened a free enterprise zone that
allows companies to repatriate their wealth with relative ease.
Qatar is another territory seeking to open up to outside influences.
Although it lags its Arab neigh-bours, it recently hosted the first
women's tennis tournament in the region (with Martina Hingis and Mary
It has also been awarded the prestigious job of hosting the 2006 Asian
With these nuances in mind, the most effective way of targeting the
Middle East is through the plethora of pan-regional satellite TV
There are three digital pay-TV platforms serving the Middle East and
North Africa. These are Showtime, a joint-venture between Viacom and the
Kuwaiti investment company KIPCO, ART/ADD, which is backed by Sheikh
Salah Kamel and Prince Alwaleed Bin Talal, and the market leader, Orbit,
backed by Saudi Arabia's powerful Marawad Group. Between them, these
platforms provide a mix of Arabic and western content to around 500,000
subscribers in the Middle East.
Although the pay-TV platforms reach upscale audiences, more significant
from an advertiser's perspective are the entertainment channels MBC and
LBC, which are beamed free-to-air via satellite to the entire
MBC is very popular in Saudi Arabia. Estimates from Zenith Media and
Universal McCann suggest two-thirds of Saudi homes have a satellite
dish, despite an official ban on them. Readman says: "It is hard to get
accurate figures but we believe MBC attracts a 45 per cent share of
daily viewing in Saudi Arabia. Its liberal programming makes it an
attractive alternative to state-run Saudi TV."
The widespread appeal of MBC and the Lebanon-based LBC provides a cheap,
effective media option for clients. According to Zenith, the Pan-Arab
channels are also eroding the share of ad revenue generated by domestic
Saudi media because they are subject to fewer ad restrictions and offer
more flexible prices.
That said, Zenith stresses that the Middle-East press provides an
important complementary marketing tool (see tables): "Although the
most-read newspaper in the country, Al Sharq Al Aswat, is pan-Arab, the
market is very localised and a number of Saudi titles are popular in
Although Zenith has concerns about the growth of Saudi-only media, it
forecasts good potential for radio - a view shared by Readman. "Given
the amount of time people spend in aircon cars, I think radio is
underdeveloped as a medium," he says.
Outdoor is relatively buoyant with megasites alongside desert highways a
common sight, although Zenith sees pan-Arab TV as a threat to this
medium's revenue base.
Although Readman's division of the region into Gulf, Levant and North
Africa is a useful guide, there are other territories of note.
Firstly, there is Jordan - which Readman groups with the Gulf
territories because of its historic ties to Saudi Arabia (despite being
close to the Levant). Jordan is a small state of three million with an
ailing public broadcaster.
Long term, Ayoub believes there might be good opportunities in Jordan,
Lebanon and Syria, although he stresses that this is "subject to the
peace process which, at the moment, is not encouraging".
Secondly, there are the 80-90 million inhabitants of Iran and Iraq.
Although this massive population is being eyed with interest by
marketers, it is not, as yet, a commercial target for obvious
Finally, Israel is treated as distinct from the Middle East to avoid
upsetting Arab sensibilities. Notwithstanding this, Israel is a media
market in transition. Last year, the country saw the launch of its first
digital satellite platform, Yes TV. Yes, which is backed by the telecoms
giant Bezeq, is attempting to break into a pay-TV market dominated by
three big cable players, Golden, Matav and Tevel. In response, the cable
players want to merge in a bid to defend their position from Bezeq.
Despite the questionmarks over long-term growth in the Middle East,
clients are keen for agencies to develop knowledge of the region.
Typically, agencies are setting up offices or signing up affiliates in
Jiddah, Bahrain, Dubai, Cairo, Beirut and Casablanca. "Clients are
putting pressure on agencies to increase their research and strategic
knowledge in order to support their marketing plans," Readman says.
PAN-ARAB ADVERTISING FORECASTS (USdollars m)
2000 2001 2002
Newspapers 14 15 13
Magazines 50 62 51
Television 535 620 682
Radio 13 15 15
Total 612 712 761
SAUDI ADVERTISING FORECASTS (USdollars m)
2000 2001 2002
Newspapers 225 227 229
Magazines 47 46 45
Television 17 15 13
Radio 25 24 23
Total 314 312 310