Advertising in Saudi Arabia

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. What's behind this boom?

The rise of pan-Arab media and the consolidation of the national media - with a top tier in both print and television taking the lion's share of budgets.

And where is this boom most evident? In stately Riyadh, increasingly home to the kingdom's biggest firms, which is now extremely well-covered by forward-thinking international agencies. Jeddah, too, has witneesed growth in the sector. But because Jeddah-based agencies serve more local clients who focus on immediate distribution and short-term sales, these clients have by and large stuck with the status quo.

That's not so in Riyadh. Paradoxically, the city's conservative inclinations have set it closer to par with global advertising trends. Today, advertising is about branding, image-building for the long term. That's a perfect fit for Riyadh, where producers of goods and services are more interested in the big picture than in the sales figures for the last 24 hours.

Riyadh-based firms naturally embraced the shift towards pan-Arab media, since that represented an opportunity to further build their brand. In Jeddah, acceptance of that change has been much slower, since Jeddah-based companies didn't see any short-term profit in it.

What did all this mean for the kingdom's advertising agencies? For starters, a new market, based in Riyadh and looking outwards towards the region, that desperately needed help in communicating a clear, effective message to a vast population. And since agencies tend to be run by the smart and trend-savvy, they seized the moment, and followed the money.

Nevertheless, while ad spend in other Middle East markets tends to be driven by foreign clients, Saudi Arabia has its own high-spending local brands - Focus handles Saudi Airlines, for example. However, the country presents agencies with its own particular set of challenges.
The problem is - as in most of the region - a lack of investment in research, so the profile of the typical Saudi consumer remains blurred. Cultural notions of privacy have also hampered researchers.

'There have been studies, but none of them go as deep as we would like,' says Soubra. 'We know that the typical consumer is young and high-spending, but that is about it.'

Agencies also realize that consumers are demanding ever more sophisticated advertising messages. 'The basic content of the ads has not changed, but production values have improved beyond all recognition. The audience will no longer put up with anything old-fashioned or cheap.'

The other aspect Saudi Arabia shares with other countries in the region is that foreigners largely manage its advertising industry. Soubra, who is Lebanese, estimates that '95 percent of managers here are foreign, whether they are Lebanese, Anglo-Saxon or Asian. Although Saudis are responsive to advertising, and regard it as part of popular culture, they have only very recently began considering it as a career option.'

According to Shadi Sharif, the general manager of Results Advertising in Jeddah, 'In the past, when creative work was totally dominated by foreigners, cultural differences created barriers between advertisers and consumers. Today,' he says, 'most of the agencies are trying to use more local expertise. The best way to deliver an effective campaign is to understand the target audience.'

Soubra agrees that the continued dominance of foreigners detracts from the efficiency of advertising. 'Foreigners, especially newcomers, are loaded down with assumptions about what Saudis like and don't like, what is permissible and what is not - and many of these are false. There are certain cultural restrictions, but depending on the message and the way it is framed, it is a more liberal market than one might think.'

One of the most influential foreigners in Saudi advertising is Bill McCune, originally from Belfast, who is creative director at Promoaction DDB - widely regarded as one the country's most creative outfits.

He comments: 'It's true that this market is very different from Lebanon, for example, where the outlook is quite European. This is an Islamic culture, and it is important to bear that in mind. Even though people from many countries live here, our target market is predominantly Arab and we respect certain traditions.'

In fact, McCune believes that advertising in Saudi Arabia is still too Western in tone. 'I think our anxiousness to do the right thing makes us cautious,' he says. 'I would like us to understand the culture to such an extent that we can play with it, use double meanings and irony. At the moment it's still a pretty straightforward sell.'

McCune has detected an improvement over the past few years. 'As more Arab people enter the industry, the ads are evolving - more jokes are making it in, they seem less forced. There has also been a change in the way the ads are made. Previously the entire crew would be foreign, and the ad may have even been shot in Europe.

Although we still can't shoot in the kingdom, due to the red tape involved, there are good production facilities in Dubai and Beirut, and we have access to local talent. This has made our work more convincing.'

Both executives agree that the rise of satellite television has made advertising more liberal, and yet at the same time more fragmented. Soubra says: 'The strongest channel remains Saudi-owned MBC, but stations like Orbit and Showtime from Lebanon are also popular, and they show unrestricted, uncensored, Western-style programming. In fact, the average viewer has access to between 30-50 channels from all over the world. This has made it harder to target the Saudi viewer efficiently.'

McCune says that while his agency buys slots on unrestricted foreign channels, this has not tempted him to break unwritten cultural rules. 'Whatever programs the channels are showing,' he says, 'our target audience is still predominantly Muslim and we respect that.'
One of the things the Irishman says that he likes about Saudi Arabia is that he is constantly learning.

'The longer you stay, the more you discover,' he says. 'I have been in this business for many years, but working here has rejuvenated my career. Now I am looking forward to passing on my wisdom to a new generation - a local generation.'