Keeping the faith (1) (page 2 of 2)

And there they did not meet with such a well prepared response. For one thing, MR in this region has no industry voice. MR was therefore an easier target, and the clients had much more success in reducing budgets and/or prices.

As a result, real prices for MR services in the region have now fallen steadily for as much as up to 10 years - to a level where the sector is now under-priced - and, as a result, under-resourced and under-invested.

In many cases we hear of it is not hard to imagine that prices have fallen to a level where professional standards are being jeopardized. Research suppliers have been pushed into cost cutting which compromises standards and quality ; whilst their best people are often tempted away from the profession by much - and I mean "much" - higher wages in, ironically, the client companies they were servicing.

As evidence of prices which are clearly out-of-line with both cost of living indices and cost comparisons for the same research in other markets, just stop a moment to take a look at Table 2 below;

TABLE 2

Sources:

1. Mercer Human Resource Cost of Living Survey, 2005
2. ESOMAR Prices Study, 2005

Certainly compared with a less expensive country, South Africa, these figures suggest research buyers in the UAE are getting something of a bargain ; ditto, with a more expensive country like France ; so that only for Greece are research prices roughly in line with the relative cost of living - though it probably comes as a bit of surprise that Greece is a more expensive country to live in than the UAE?

With oil prices around the $60 per barrel level and forecast to remain there or rise even higher, perhaps we've turned the corner now that we can expect these economies to boom again?

Certainly in September Arabies Trends reported that spend on advertising across the Gulf showed a 25 percent increase in the first quarter this year compared with the same period in 2004. But in the same article commentators suggested that hope was premature. The Creative Director of one of the region's leading ad agencies was reported as saying "There's a trend now where a client chooses the agency that's put in the lowest bid. Ideally, the price should be the last thing you think about."

So maybe the " price mania " mindset , as the more cynical call it, now so well established, will take some time to change. And if that is the case for advertising then perhaps we in market research need to be even more patient - that's if we're still around and in business to see it happen.

Interestingly, a second concern was reported as: "While the numbers look good, word on the street is that the creative industry still has a long way to go before it reaches the level of sophistication found in other markets."

Maybe that's a function of the same thing - a reluctance to spend on research in the first place? - and I'll have something to say about that in a follow-on article.