Advertising in Saudi Arabia (page 1 of 3)

This is a tale of two cities - and of two sometimes competing visions of the future. To understand how and why Saudi Arabia's advertising industry has changed over the past six or seven years, you have to look to the kingdom's two biggest cities: Jeddah, the bustling commercial capital, and Riyadh, the traditionally more conservative seat of government.

The point of entry for most outsiders is Jeddah - a cosmopolitan city, and a gateway to Mecca. On my first visit I sat on the plane next to a tall, bearded, Bangladeshi pilgrim, while all around us were Filipino engineers on their way back to work. In the taxi to the hotel, I saw crowds of people streaming into a gracious, floodlit mosque, their shops left open and deserted as they answered the call to prayer. In the distance, a massive white fountain arched into the air like an animated monument.

But in Jeddah, as in the rest of the kingdom, first impressions can be wildly misleading. Outwardly, the pace of life is slow. Inside the city's countless corporate offices, however, the pace can be relentless. Jeddah is the country's commercial hub, the capital of the fast buck, where the latest special offer is here today and gone tomorrow.

Stately Riyadh, by all appearances, is everything that Jeddah isn't: home to the government, a capital for big business. It's not surprising, then, that when the advertising industry first blossomed in the kingdom, Riyadh was nearly entirely passed over. But as the Saudi ad business has changed, a major geographic shift has taken place. Today, most major agencies have offices in both cities; tomorrow, Riyadh is likely to replace Jeddah as the kingdom's true advertising hub.

Rabie Soubra is client services director of Focus Euro RSCG, one of the country's biggest agencies. He says, "The other markets of the Gulf have potential, but there is no way they can compete with Saudi in terms of importance. If you look at the country's geographical size, the youth and spending power of its population, and its overall influence, it dominates the entire region. "But one of the main difficulties," says Soubra," is that there is no centralization.

The country is divided into three regions - the east, centered on Damam; the west, revolving around Jeddah; and the central area, focused on Riyadh. The smart advertising executive knows that each region has its own particular culture, its likes and dislikes, and really effective ads would take advantage of this."

It's not just a question of thinking regional, though. The ineluctable shift towards Riyadh has more to do with the evolution of outside forces: until the late 1990s, the Saudi ad market was essentially closed and, where it was open, served by local branches of international agencies that handled almost exclusively multinational accounts, like Ford or McDonald's. These agencies were all based in Jeddah.

Until the late 1990s, Saudi ad spend was mostly limited to local media. Since the media were local, companies saw little need for ad agencies: they knew the market, and so created their own in-house creative departments to sell their products and services to local customers in local media. Cheap and seemingly efficient, this was the status quo for decades.

Regional advertising expenditure stood at $1.7 billion in 2002. With a population of 24 million, the average age of which is 18, the biggest spender, Saudi Arabia, is now clearly a highly attractive market for the multinational advertising agencies. And despite the blip caused by the sars outbreak and the conflict in Iraq, its growth shows no sign of slackening.