DUBAI, 19 June 2006 — The Gulf emirate of Dubai, a thriving business hub, has become the “capital of advertising” in the Middle East due to its rapid growth and the facilities it offers, industry experts say.
Figures also show that the United Arab Emirates, of which Dubai is part, has overtaken Saudi Arabia as the largest regional advertising market.
The biggest names in the business now operate out of Dubai, and “most are also covering North Africa” from their Dubai base, said Joseph Ghossoub, the Lebanese-born chairman of the International Advertising Association (IAA).
Major international advertising agencies came together in Dubai in March for a meeting of the IAA, which convenes every two years.
According to the Dubai-based Pan Arab Research Center (PARC), advertising expenditure in the UAE reached $904 million in 2005, a 43 percent increase on the previous year. The leap put the UAE for the first time ahead of oil powerhouse Saudi Arabia, where spending on advertising reached $890 million last year.
Ghossoub said Dubai’s importance extends to its role as a center for trans-regional advertising, chiefly through the numerous Arab satellite television stations operating out of the bustling city state, which looks unlikely to have any serious rival in the foreseeable future.
The trans-regional advertising market was worth some $2 billion in 2005, he said.
Dubai currently hosts more than 150 advertising firms, including regional offices of such household names as Saatchi and Saatchi, Leo Burnett, Impact and Grey, Ghossoub said. More than 30,000 people work in the advertising and media sectors.
But Ghossoub, a longtime UAE resident who runs a group of advertising firms, said much remains to be done to bring the region closer to levels of spending in industrialized countries.
While advertising spending reaches $425 per inhabitant per year in the United States, and $375 in Europe, the figure in the UAE does not exceed $100, and is less than that — $70— in the Gulf as a whole.
“This shows we still have much to do. The Middle East accounts for just three percent of global advertising expenditure,” Ghossoub said.
He said advertising agencies were growing along with Dubai, although many came before the current economic boom.
Advertising firms are flocking to Dubai because of “the facilities it provides, which are unequaled in the region, starting with the tax-free system and ending with the establishment of media and Internet cities.” Moreover, Dubai, a melting pot of dozens of nationalities, “offers a chance to employ people representing all cultures in the world,” Ghossoub added.
George Chehwan, another Lebanese media and advertising executive, said advertising agencies are attracted to Dubai because big commercial enterprises have moved to the Gulf emirate and this “enables them to be close to their clients.” “The Gulf region is growing significantly in all aspects, and we have to have a strong presence here,” he said, adding that 90 percent of trans-regional advertising is conducted from Dubai.
Both Ghossoub and Chehwan said they were proud that the Lebanese were doing very well in the advertising and media sectors in Dubai. Ghossoub attributed this to the fact that universities in Lebanon have for years been forming media and communication specialists, in addition to the fact that the Lebanese are generally multilingual.
But other Arabs, chiefly Jordanians and Egyptians, are also making their mark, he said.