JWT MENA works with powerhouse clients such as Nokia, HSBC, Unilever and Nestle. A founding father of the regional industry, JWT Chairman Roy Haddad sat down with Executive to tell us which sectors he will be looking to for future profits.
- Which sectors will be upping their spending in 2011?
It’s not about upping or downing. It’s about market dynamics. We all live by the market dynamics. Take the car industry, which was doing very badly in 2008, 2009 and 2010. If there is a recovery the car industry will go up again. There isn’t a formula for that. The financial services sector is growing because it was quite immature before and now it is reaching maturity. Telecoms will continue because it is still a competitive environment, but you can never predetermine.
- The spend per capita in the region is lower than in other markets. Why is that? Do you think there is any sign that this is changing?
Volatility might be one reason; it is still quite a volatile region. In the [Gulf Cooperation Council], the spend is at the right level. It is the rest [of the region] that brings it down. When you do the [Middle East and North Africa] average it goes down. But the [United Arab Emirates] spend is very high. Kuwait is very high per capita.
Marketing works best in the long-term. You invest to buy 10 years down the road. In the Arab world, very few will dare to have an outlook 10 years down the road, Egypt being a perfect example of that.
- Do you think that the idea of advertising and brand building as an investment is well understood?
It is picking up a lot. I think there is a belief in that more and more now and I think it will continue. Markets live through maturity stages. We all forget that the Middle East as we know it today came to be in the 1970s. We have 60 years of catching up to do. There is a lot of catching up to do [regarding] the maturity of people appreciating advertising and how they can use it for their own business interests and use it as an investment. From my point of view, we have caught up quite quickly.
- Do you think the Middle East is considered a growth market right now for multinational companies?
Let’s define the Middle East. If you talk about the MENA region, there are 350 million consumers in this region. There is no doubt that the [gross domestic product] growth is around 4 to 4.5 percent year-on-year, which means that these markets are growing. There are very few markets around the world that grow at this healthy rate. Europe is coming into the recovery, but very slowly, so the Middle East is of interest to anyone who is looking for growth — but, against that interest there is always this volatility factor.
- What happened to the local clientele in the UAE, many of whom dropped their entire advertising budgets at the onset of the crisis?
We didn’t witness this kind of phenomenon ourselves, even though I would say that our portfolio is split 60 percent local, 40 percent multinational. Any serious player will understand that it’s not a haphazard kind of activity. Successful marketing has to be sustainable. And serious players will sustain their presence.
- What reaction to the crisis did you see?
The whole investment level dropped between 80 and 90 percent, which started slowly but surely to pick up in 2010. 2011 looked good, until the Tunisian and the Egyptian crises came in. But I think in the long term we have a young population that is coming to the consumer market. [The region is] growing in wealth and there is no reason why the ad industry should not follow.
“The Middle East is of interest to anyone who is looking for growth”
