Adland in the UAE is booming. With a raging economy, oil at more than $100 a barrel, liquidity at record levels, and everyone and his uncle heading to its shores in a bid to capture a share of the spoils, it's natural that the ad industry is reflecting the unprecedented economic reality.
And while advertising growth in the US and Europe stagnates, many eyes are now on the Middle East, and particularly Dubai, where the majority of the region's advertising networks have their headquarters.
In simple monetary terms, adspend in the UAE rose by 21 per cent in 2007 to $1.3 billion, according to the Pan Arab Research Center. With a population of just 4.4 million, the country's adspend was higher than that of any other state in the Gulf Cooperation Council, even eclipsing Saudi Arabia's $998 million, across a population of 25 million. Throw in the figures for pan-Arab advertising - most of which is led out of Dubai - and you get a further 26 per cent rise, with pan-Arab adspend increasing from $2.3 billion in 2006 to $2.9 billion in 2007.
In absolute terms, these figures may be small in comparison with other, more mature, markets of the world, but they only tell part of the story. Dubai-based regional networks, such as the Middle East Communication Networks, which includes the ad agency Fortune Promoseven and the media agency UM7, grew by 40 per cent; Memac Ogilvy grew by more than 30 per cent, with profits up 73 per cent, according to its chairman and chief executive, Edmond Moutran, while the Horizon.FCB managing director, Edouard Azzam, claims his agency saw its business grow by a record 100 per cent and its staffing levels double.
While growth has been in double digits in the UAE for years, the past 18 months have been exceptional, even by its own standards. The acceleration has been driven by high-spending real-estate developers, telecommunications giants, banks and government entities competing for consumer attention and attempting to cut through the ever-increasing clutter.
It is for these reasons that the UAE - acting as a doorway to the wider Middle East - is attracting increased interest from the big networks. Last year, Havas increased its stake in Euro RSCG Middle East from 10 per cent to 50 per cent, while WPP concluded a deal in March this year to buy 60 per cent of The Holding Group, which is the Middle East's largest communications network and includes Team Y&R, Mediaedge:cia and the PR agency Asda'a. WPP is also close to completing a deal to buy a further 30 per cent of Memac Ogilvy, to give it a 70 per cent controlling stake.
But there is a flip-side to the boom. Growth is leading to strain, dissatisfaction and a talent crisis. From a creative perspective, a shortage of talent means much of the work being produced is decidedly average, heavy workloads deny even good creatives the time they need, and the biggest spending is from real-estate development and banking - sectors not renowned for their creative sparkle or innovative approach to communications.
For Adil Khan, the general manager of Team Y&R in Dubai, the past year has been the most hectic the industry has ever faced. "The funny thing with growth is that you have to manage it," he says. "That is where agencies have to say: 'OK, we're racking up the billings, but we have to start looking at our business models; we have to start looking at our financial models; we have to start asking whether people are happy with this kind of environment.'
"I know there's so much dissatisfaction because the growth is coming at a cost, and the people are paying that cost. Yes, we increase their salaries and the bonuses, and yet there's so much more to life than money. People are feeling the stress."
Earlier this year, Impact BBDO created two new chief operating officer positions in a bid to manage its growth, with Pierre Azzam taking charge of the GCC from Dubai and Dani Richa taking control of the Levant and North Africa from his Beirut base. Memac Ogilvy has also restructured, with the hiring of a head of advertising in April.
But dissatisfaction means many people within the industry - which is made up almost entirely of expats from countries such as Lebanon, India and the UK - are leaving or migrating to client companies. "Not a single person has gone to another agency. They've gone client-side, and for me that is a red flag," Khan says. "Without people, our industry is nothing."
A shortage of talent is impacting the industry in two different ways. First, it is leading to incredible internal strain and the need for agency bosses to pay inflated wages just to attract and retain top-flight staff. Second, it is leading to quality issues with creativity. Although the recent second Dubai Lynx Awards highlighted some standout work, the winning ads are not representative of the vast majority in the region.
"The rapid nature of growth in the industry is driven by those large companies - including real-estate developers - with massive advertising budgets and marketing goals, whose primary priorities do not lie in knowing, meeting, or, most importantly, engaging with customers," Kamal Dimachkie, the managing director of Leo Burnett Dubai and Kuwait, admits. "This challenge is, in fact, a physical one to meet pent-up demand in the market. In such an environment, a company's priority is to produce a product and let people know that it is available. The other reality is that this market environment is not sufficiently competitive to require, let alone desperately need, competitive and compelling communication that forces people to take notice of a brand, engage, ultimately bond with it and select it as opposed to another brand."
But that's just the beginning of the problem, Tarek Miknas, the growth officer for Lowe MENA, says. "Why is it that an industry that seems to be growing at an alarming rate is still playing catch-up when it comes to creativity?" he asks. "The answer is clear: there's so much work out there that no-one has the time to think creatively anymore. We're in a region where clients may demand a TVC to be scripted, boarded, shot and on air in less than two weeks. "
Perhaps these reasons help explain why, although the UAE won the vast majority of awards at the Dubai Lynx, the truly great work went to Beirut, Cairo and, of all places, Doha.
"As many of our peers rightly mention, we are short of great talent," Miknas says. "This is not because talent won't come out here, or can't be nurtured from within, but rather because the workloads are too ridiculous and they're not getting the lifestyle they thought they were buying into when they signed up for it. We agencies must slow down the pace of work and use the time to build up the quality of our product, or we will not be able to look upon our region's work with any respect and admiration."
Dimachkie adds: "Agencies must concentrate on engaging with people, and clients must allow the creative professionals the scope to do their job properly. Let marketers market and let advertisers create advertising.
"In turn, clients must stop the knee-jerk reaction for quick-fix solutions and understand that successful and innovative creative output takes time. All parties must make a concerted effort to become more organised - to enable creative agencies to be more efficient and to avoid an effective industry depression, especially as the industry continues to grow. If not, the long-term implications will mean all parties have to rush, to compensate for the damage done along the way."
CANNES COMES TO DUBAI
If there was ever any question as to why the Cannes Lions International Advertising Festival chose to launch its first regional awards ceremony in Dubai, the answer was evident on the evening of 2 April. As 1,600 people swarmed to the Dubai Lynx Awards, Philip Thomas, the chief executive of Cannes Lions, paid tribute to the 2,023 entries and the passion of the region's advertising industry.
This is a region that wants to be recognised on an international stage - a drive that has culminated in the first three-day Dubai International Advertising Festival this year, incorporating the second Dubai Lynx Awards (see some of the winners above). The festival's goal is to nurture the industry through inspiration, learning and celebration, and so raise the creative bar.
JWT Dubai and Fortune Promoseven Dubai were the UAE's biggest winners at the Lynx, and Thomas believes worldwide recognition will eventually come.
"Ten years ago, Thailand didn't figure at all in Cannes, now it's a regular winner with some fantastic global quality work," Thomas says. "I think it's just a question of time before that happens in the Middle East region. It might be three years, it might be two years, it might be five years, but it's going to happen pretty soon."