More public than relations

New York gridlock is not such a leap from public relations in the Middle East
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Public relations — or simply ‘PR’ — in the Middle East reminds one of New York’s Madison Avenue on Friday afternoon: a one-way artery pushing traffic north with no escape from the congestion. 

Like traffic in Manhattan, PR in the Middle East is a choking congestion of information flows. Managed mainly from Dubai by a number of multinational communications firms and directed into the inboxes of information multipliers — meaning mainly publishers, journalists, and editors across the region — the production of what passes itself off as PR in this part of the world has been swelling into a relentless torrent of product announcements and event promotions.  The stream of information pollution may have helped some PR clients boost visibility or even reputation, but what it  did was raise the question: is PR just another imported scourge on the region or does it have a useful purpose?

When Dubai hosted an international PR industry gathering in the middle of last month, the event’s promotional material trumpeted that the Middle East PR industry “is worth $500 million” and that the market in the Gulf Cooperation Council (GCC) is the world’s “fastest growing and arguably the only high-growth market for the PR industry today.”

While it could be impressive, one can also easily read this sort of self-promotion from the opposite end: the PR industry in most regions of the world has somehow failed to convince audiences of its value. It is expanding strongly only in the Middle East, where PR has been shunned by public and private sectors until 10 years ago or less, and has been growing from a low base in the recent past — or is that assumption correct?  

Separating fact from fallacy 

According to Majdi al-Ayad, vice president of network affairs and United Arab Emirates managing director at TRACCS, a Saudi Arabia-based PR network, Saudi Arabia and the UAE lead the region with 30 to 35 percent annual growth while other GCC markets are experiencing “a steady 15 to 20 percent,” adding, “We have experienced first hand the exponential growth of our business, which has, ironically, accelerated since the onset of the global recession.”

International PR industry performance shows that these numbers are indeed far above global rates but also that growth has not only been happening in Dhammam and Dubai. According to research published last September by an industry resource called The Holmes Report, worldwide revenues in the PR industry stood at $8.8 billion in 2010, representing an 8 percent increase of fee incomes. 

The Holmes Report presents two other aspects. First, the worldwide industry growth came as a turnaround from a 7.5 percent contraction in 2009. Secondly, the split of revenues between PR units of global conglomerates and independent PR agencies is roughly even at $3.75 billion versus $3.85 billion, with another $350 million weighing in for the independents in results not reported by the companies directly. By these headline numbers, independent agencies and units of global advertising conglomerates dominate the world market for PR, taking to 85 to 90 percent of market share. 

When considering that the big four communications conglomerates in 2010 reported gross revenues approaching $40 billion between them, and that their PR units were clocked by The Holmes Report at $3.85 billion within those results, it seems not outlandish to assume, as many in the industry do, a rule-of-thumb business size ratio of eight or nine to one between advertising agencies and PR firms. 

Trying to correlate these global results with the PR industry size estimates in the Middle East and North Africa, however, and attempting to find corresponding ratios between PR and advertising industries on global and regional scales, would lead deep into fruit market territory, way beyond apples and oranges.

Yet, according to Ayad, the PR industry estimate for the Middle East of $500 million is reasonable when including agencies and in-house budgets. The $9 billion global figure on the other hand does not represent the huge in-house budgets allocated in public and private sectors to PR departments. 

With very little quantitative data on hand,  gauging the quality of regional and international PR requires perspective rather than exact science. Regional leaders affiliated with the global communications conglomerates see no lag in the quality of PR agency work here. Raja Trad, chief executive for agency Leo Burnett in the Middle East, told Executive that he sees the quality of PR on the regional level as “not at all inferior to advertising.” PR has “come a long way in the region in the past 10 years and there are PR agencies today that are talking the same language that you find in Europe and America,” said Trad, adding that a high level of strategic thinking exists in both PR and ad agencies of the Middle East. 

As to the overproduction of press releases in the regional markets, he blamed some clients who “judge PR by the number of press releases and amount of coverage they get in news media and across all channels, without examining if there is strategic thinking behind this.”

While such problems of the PR industry in the Middle East can be seen as those of a fairly young practice when compared to the regional advertising industry, the contentious and interrelated issues of bossy clients and the poor reputation of PR are not specific to the region. An international PR industry veteran, Harold Burson of Burson-Marstaller (the world’s number four PR agency by revenue) told participants at the Dubai Public Relations World Congress last month that the top PR people have to hold their own when dealing “with the toughest, most-demanding, and smartest CEOs,” according to a report by the online-only Dubai Chronicle. The Holmes Report cited British PR personality Lord Bell as saying in Dubai that the PR industry has to learn to live with being “a lightning rod for distrust.” 

Still, Bell and Burson told their audiences that they see a great future for PR. The optimism is shared by Mark Daou of young regional PR firm Rizk Public Relations. “From what I am seeing now, PR is gaining much more speed not only in terms of growth but also in terms of the necessity for companies,” he told Executive, after confessing he had converted from advertising to PR. “PR builds the reputation whereas advertising serves immediate business purposes.”

Thomas Schellen

Thomas Schellen is Executive's editor-at-large. He has been reporting on Middle Eastern business and economy for over 20 years. Send mail