GMR | Mar 2011 by MediaquestCorp.

GULF MARKETING REVIEW

SECTOR ANALYSIS JEWELLERY & WATCHES: ASIAN TOURISTS JOIN REGION’S GOLD RUSH A MediaquestCorp Publication

MARCH 2011 - NO 196

FEBRUARY MARCH 2011 20– - NO 0 - 196 NO 190

CSR Moving up the

marketing

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MEDIA TRACKING KUWAIT’S ‘SUSHI BLOGGER’

CREATIVE READING LEBANON’S CRISTAL BALLS

CLIENT SERVICING AUDIT MORE URGES GLOBAL IAA CHIEF

Registered in Dubai Media City

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client servicing

IAA global chief Alan Rutherford slams agency practices

www.GMR-Online.com

March 2011 – Issue No. 196

NEWS

Memac Ogilvy Tunisia spreads postrevolution message of hope. OMD Arabia snaps up Saudi’s Goody. Me360 circles the entertainment sector. Active PR opens healthcare unit. The Economist opens a new ‘Conversation’. Nivea Tree eco-project tested. Fox focuses on Arab women. Tang swaps tin and glass for plastic in major packaging revamp after 50 years in the GCC and much more news from around the region.

World News

UK watchdog investigates J C Decaux and Clear Channel UK in ‘restrictive practice’ probe. Techno choc firm Tcho opens ‘virtual factory’. Kidsco renews with Global Listings. JWT HK walks off with Samsonite. MEC India bags FlipKart. Dentsu London checks in with Starwood’s ubertechno-urban Aloft chain. Cannes Lions adds Holding Company of the year award.

News Plus

Marketers in Egypt and Bahrain recoup to assess the seismic fallout from a month of political turmoil that has dented both client and agency forecasts.

Media

The lawsuit filed against a Lebanese expat blogger in Kuwait for a mildly critical restaurant review has left a sour taste among the region’s blogging community and burned the brand’s reputation. We track the comments.

creative

Our man in Feraya reports back

from this year’s MENA Cristal Creative Awards.

creative view

Did our guest critics put the boot in Shoe Mart’s creative and how did they receive Dubai Islamic Bank’s Give TVC?

Cover story

Emerging markets are more savvy about stakeholder engagement and CSR than developed countries, says study, while corporate activism begins to supplant charity in the Middle East...at last. Report includes Washington-based APCO Insight feedback.

Brand Analysis: Health warning

The region’s burgeoning healthcare sector requires a large dose of branding if it is to remain fit for purpose.

Sector Analysis Jewellery and watches 58 During the bad times consumers tend retreat to the safety of gold, so how are jewellers capitalising on this trend? We talk to the Diamond Marketing Council and Gold Marketing Council. Meanwhile any dip in UAE spend seems to be more than compensated for through Chinese tourists, so are retail marketers working harder to attract Asian business? We look at the growing appetite for jewellery among men and the increasing role of digital and online is explored. Finally, we examine the opportunities offered by the region’s numerous gifting occasions. Also featured are latest PARC ad spend data, plus SEO analysis and sentiment monitoring from Sekari.

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58 Sector analysis: Jewellery and Watches MediaquestCorp. Dubai Media City Al Thuraya Tower 2, 24th Floor United Arab Emirates Tel: +(971) 4 391 0760 Fax: +(971) 4 390 8737 www.mediaquestcorp.com

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Reproduction in whole or part of any matter appearing in GMR is prohibited by law without the prior written approval of the publishers. Opinions expressed in GMR do not necessarily represent the views of the publishers and editorial staff of the magazine. The publishers do not hold out any guarantee as to its accuracy, neither do they indemnify any loss arising through use of the information. All dollar prices ($) are US dollars, unless otherwise specified. All marketing data is subject to confirmation. Printed by Emirates Printing Press, Dubai

GROUP MANAGING EDITOR Siobhรกn Adams siobhan@mediaquestcorp.com DEPUTY MANAGING EDITOR Precious Jasper de Leon precious@mediaquestcorp.com SENIOR SUB EDITOR Elizabeth McGlynn e.mcglynn@mediaquestcorp.com SUB EDITOR Salil Kumar s.kumar@mediaquestcorp.com ART DIRECTORS Sheela Jeevan, Alvin Cha, Aya Farhat CONTRIBUTORS Alex Malouf ADVERTISING: MEDIALEADER United Arab Emirates sales@mediaquestcorp.com Tel: +(971) 4 391 0760

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News

Memac Ogilvy helps spread hope in deflated Tunisia Visionary June 16 2014 campaign rapidly becomes top trend on French Twitter Tunisia Memac Ogilvy Tunisia has tapped into the zeitgeist of the national psyche following the January 14 Revolution with a new campaign. Sensing a slump in spirit that often follows a revolution, the agency moved to spread a message of renewed hope. Enlisting the help of six major consumer brands and six media, Memac Ogilvy launched a multi-media campaign called “June 16th 2014.” Speaking to GMR, creative director Nicolas Courant, said: “The entire country was on strike, the economic activity was practically reduced to none and three weeks later uncertainty had already chased away hope. “The whole advertising industry was completely stuck, although media were booming due to newly accessed free speech.” Brands, he added, wanted to communicate their eagerness to help reboot the econ-

omy, but did not want to risk accusations of exploiting the revolution for commercial gain. “We felt we needed to find an idea to encourage everyone to get back to work and build the country we all desire,” Courant continues. “And we strongly believed that we all had to focus on the future goals rather than look back or complain about the present.” The agency worked with six consumer brands – Tunisiana, Sotubi, Délice/Danone, Sotuchoc and L’EPI D’Or – plus two newpapers, one radio and one TV channel, and an online magazine. The big idea was for the companies to act as though that particular day was June 16, 2014 – three years after the first planned free elections. A hashtag on twitter #16juin2014 launched along with a website in which all the “content developed” by the media was compiled to

Hope floats: Nicolas Courant

be shared – articles/videos of MFM and NESSMA TV. According to Courant, consumers immediately engaged on Twitter, imagining how their future would be. “Within a couple of hours, the hashtag #16juin2014 was the top trend on French Twitter,” he says. “The buzz also took to Facebook with the website content – such was the response, we had to change servers three times.

“Facebook users began imagining their future and created content around 16/06/2014, such as photos, comics and drawings, Courant says. “About 15 fan pages were spontaneously created to compile everyone’s dreams. Blogs and online news began to post about June 16, and at 6pm we revealed on all media what was the purpose of the operation and who was involved.” Courant also reports extensive media coverage, including special news reports on Al Jazeera, France 24 and regional radio, such as Radio Monastira and Express FM, which plans a follow-up. Radio Tataouine, meanwhile, will host a special June 16 day, inviting people to call and imagine their future. At the time of going to press, involved brands had started re-communicating normally through participating media. “And other brands followed,” Courant adds.

$15 million Goody media is tasty win for OMD Arabia Saudi Arabia OMD Arabia has seen off competition from incumbent Starcom, Initiative and Optimedia to land the Saudi food conglomerate Goody media account. Monitored value in media spend for 2010 was close to $15 million, said OMD. Goody has more than 25 product lines, which it markets in the GCC and Levant.

OMD Arabia is tasked in launching new product lines. The multi-million-dollar account is a very sizeable win for the Saudi agency, which manages the whole portfolio, including the complete Goody range, Velor and Cofique, an OMD press release reports. “As we expand our business across the GCC and wider Middle East, we need a partner who has the required

Great taste: Choucrallah Abou Samra

regional footprint and right expertise in the field to help us optimise our campaigns,” says Khalid Temairik, GM, Goody, Saudi Arabia. Choucrallah Abou Samra, managing director, OMD Arabia, adds: “As a 40-yearold brand, we have plenty of opportunities to capitalise on Goody’s rich history and deepen the brand’s relationships with its consumers.”

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News

Regional smartphone app extends category line-up Average annual spend is $1,307 per location on the portal, “less then a flyer print run” UAE Middle East-developed smartphone application me360 has entered the recreation and entertainment sector with the addition of Switch Bowling and limebox.ae. The company already has a roster of 700 enriched data providers and advertisers, including Jumeirah Group, Emaar, Starbucks, McDonald’s, Americana, Sofitel, AlShaya and Sumo Sushi. The news coincides with me360’s discussions with spagenie.ae, a regional spa listing with a directory already available on the app. It also follows the launch of me360’s 2.0 version and, as it nears 6,000 users, the end of its free trials for businesses. Launched in October, me360 uses an ad model that Sherif Abaza, CEO-MENA, describes as a “low barrier entry.” This is a monthly commitment to a pay-per-click model of $109. “This could lead to an average annual spend of $1,307

it’s a woman’s world

Which came first?: gaining traction is a chicken-and-egg situation, says Abaza

per location on the portal. Many businesses spend more than that on a one-time flyer print run.” The app is a platform from which businesses can build a social media presence and target potential customers who are in the vicinity of their store through special deals and promotions, as well as brand messages. Users have access to a directory of businesses in proximity to their location.

It includes contact information, consumer reviews and promotions. Users can also share their opinions on the app, which is simultaneously updated on Facebook and Twitter. me360 was released despite location-based challenges, including the poor quality of data available in the region. Most regional information online, says Abaza, is often inaccurate and outdated. Currently available on all

iTouch devices, me360 is on track to launch on BlackBerry, Android and Nokia at the end of this month. When asked about promoting the app, Abaza said wordof-mouth is central to the app. This “can be a chickenand-egg situation,” he said, “because people will use it if it has a lot of company listings and coupons in it, but then companies will get on it if they see that there are a lot of people using it.” Detailed analytics are provided to companies via a secure business portal. In the future, branding within the app is a possibility, says Abaza. An example is the inclusion of product logos in a store’s tab to indicate that the product is being sold in the outlet. Bilingual options for Saudi Arabia, China and France are under consideration.

GCC Fox International Channels is repositioning Fox Series to target Arab women, particularly women in Saudi Arabia. The repositioning was unveiled at the same time as the launch of the channel’s new name that drops ‘Series’, leaving only the name ‘Fox’. The channel will feature both content in dual audio (Arabic and English) while programming will include international health and lifestyle programming. Currently, Fox is premiering a new season of Desperate Housewives (season 6) and introducing a number of new shows airing for the first time in the region. These include musical-comedy-drama series Glee, competitive cooking show Masterchef Australia and crime series Lie to Me. New regional programmes will inlcude Jdeed O Mofeed, a onehour block during the daytime that discusses issues affecting women’s everyday life, along with various genres like cooking, arts & crafts, health & beauty, parenting, & home improvement.

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News

QA campaign takes to the air Qatar The latest print and radio ads for Qatar Airways focus on images that represent the airline’s new destinations. The campaign was created by QR Marketing Communications & Batey (Singapore). The radio commercials offer insights into a city with a series of single-sentence statements about key aspects of that location.

Raising the bar: QA’s new creative

T he “I a m ...” c onc e p t creates intrigue and engages listeners before finally revealing the city’s name. Meanwhile, each print ad uses familiar visual references for each destination. The image of an airport baggage belt with sushi plates on it, for example, is used to promote the Tokyo route. QA CEO, Akbar Al Baker, said the new ads reflected a maturing of the brand. “With brand awareness of the airline maturing globally during the past two years, we are now producing advertising that is thoughtful and original.”

GSSG’s Media Group bags Salam Media Eighty per cent acquisition allows wider media product offerings Qatar Media Group, a subsidiary of Ghanim Bin Saad Al Saad & Sons Group Holdings (GSSG), has acquired 80 per cent of Salam Media Cast for an undisclosed sum. The acquisition of Salam Media Cast, which specialises in telco, broadcasting and security solutions, will allow Media Group to offer media services and products throughout the region. “In today’s world, media has become one of the most important components of any country’s development,” said Mohammed Al-Hamadi, GSSG deputy chairman. “Media Group is planning to expand its scope to cover a variety of media services that would meet the needs of the evolving media market,” said Mohammed Badr Al-Sada, VP of Media Group.

brand reFResh

New deal: (L to R) Mohammed Al-Hamadi with Hussam A.S. Abu Issa

“Together, Media Group and Salam Media Cast, plan to work with the key constituents in the media industry to better understand the needs of all media outlets in the region and help them maximise yield and achieve their media objectives.” Launched last year, the

Media Group services GSSG and other clients across the GCC. It offers services such as PR, media production, event management, marketing and IT. GSSG Holdings is a private company boasting a range of businesses from engineering and automobiles to fitness and education.

GCC Tang has repackaged for the first time in 50 years, swapping tins and glass jars for plastic. The design was inhouse. “Tins have been the biggest packaging format for Tang in the GCC, contributing to more then 65 per cent of sales,” said Vishal Tikku, MD, Kraft Foods GCC. “The new packaging and format is expected to drive increased sales as it will appeal to a wider segment of consumers who look for convenience, variety and excitement in the beverages they consume.” Promoting the revamp is one of the largest campaigns for Tang outside of Ramadan, including OOH, TV, in-store, social media, as well as a home makeover promotion in Saudi Arabia, offering $1,300 worth of vouchers. Spend was undisclosed.

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News

Campaign starts “Conversations” MEA In line with its aim to encourage audiences in the MEA to “Join the global conversation”, The Economist has launched its “Conversations” campaign. It invites readers to take part in conversations by illustrating two, often controversial, sides of an argument, urging people to share their thoughts online via Facebook.

Open dialogue: The Economist

“We wanted our new brand campaign to be thoughtprovoking and encourage intellectually curious people in the region to participate in international issues.” “This very simple combination of visuals and text do just that,” said David Taylor Evans, managing director, MEA, The Economist Group. The campaign will run across the region in print and OOH media throughout the rest of the year. It shifts from the magazine’s typical text-only approach, adding new visual elements to illustrate the debate, while keeping the red and white signature colours.

Active PR opens healthcare practice GCC healthcare to reach $47 billion to $55 billion by 2020 UAE Dubai-based Active PR has opened a specialist healthcare unit. “Based on the regional and UAE healthcare sectors’ growth over the past five years, the sector has huge potential in the region and is predicted to expand greatly over the next 10 to 15 years,” said Louay Al-Samarrai, managing director, Active PR. There are currently about $14 billion worth of healthcarerelated projects in progress across the Gulf, according to the agency. The four-man unit is going for a number of pitches in the healthcare IT, healthcare tourism and pharmaceuticals sectors, and is expecting three major projects by mid-year. Active PR is already working with Berlin Bradenburg to promote Berlin in the Mid-

tree huggers

Healthy outlook: Louay Al-Samarrai

dle East as a preferred healthcare destination. “Too many ventures take the view of ‘Open it and they will come….’ – we took a very different road. “We did feasibility studies, approached key industry players and government entities and researched the markets and the region, as well as competitive healthcare destinations. The result is a healthcare unit of the agency

that is providing consultancy and world-class programmes to some very interesting and challenging clients,” Al-Samarrai adds. The GCC healthcare market is expected to reach $47 billion to $55 billion by 2020, with the UAE alone rising to $12 billion in 2015, from $3.5 billion in 2005, says research firm McKinsey & Co. Direct health spending in the GCC is expected to rise by 300 per cent to $60 billion in 2025, compared to $15 billion in 2008. In other health-related news, Etisalat has signed a MOU with Ericsson to deploy a range of mobile healthcare services in the UAE. Ericsson Mobile Health will allow medical professionals to remotely monitor the health of patients.

UAE Nivea has launched the Nivea Tree macropackaging concept. The global sustainability test programme is investigating whether consumers would prefer to lose the packaging they currently receive upon purchase. It will also test how consumers would like to see the brand move towards a more sustainable approach to its packaging and logistics. Experiential agency LightBlue is running the test in the region and has developed a new shipper device made almost entirely out of recycled Nivea products. “Rather than just remove the micro packaging, we created a robust macro-packaging system; we call it the Nivea Tree, which could be reused for different SKUs. We also devised a new re-useable delivery system, so that more products could be shipped on one pallet while decreasing the carbon footprint,” says Phil Lynagh, managing partner, LightBlue. Research showed that 86 per cent of people asked preferred products with less packaging.

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World News

Islamic finance enewspaper debut Global E a g lemont Me d ia has launched what it claims is the world’s first Islamic finance e-newspaper, The Islamic Globe. The free weekly is delivered via a variety of digital platforms as well as PDF. The design evokes the style of a newspaper from the 1950s, complete with yellowing paper and curled edges, states a company press release. Founder and publisher Kunal Wadhwani, previously co-founder and head of sales and marketing of Zawya, said: “The unique readership and unique delivery mechanism of The Islamic Globe has already made it a hit with key advertisers in the industry.”

Global Listings’ deal with KidsCo Global Global Listings has signed a deal with children’s edutainment channel KidsCo to deliver its EPG, programme highlights and website/VOD content worldwide. The company provides broadcasters with a multimedia solution for their programme schedules. It will provide information in local language for France, Germany, Portugal, Spain, Russia, Poland, Turkey, Greece, the Middle East, Africa, Singapore, China and Australia. Products and services are targeted at reflecting the local market per designated territory, the company says.

UK OOH firms investigated over rebates JC Decaux and Clear Channel at centre of ‘competition’ row U K T he O f f ic e of Fa i r Trading (OFT) is investigating JC Decaux and Clear Channel in connection with contracts issued to local authorities relating to bus shelter advertising and information panels. Particular concern centres on the long duration and “potentially restrictive” terms, says the OFT. It has written to both companies citing reasonable grounds for suspecting that the agreements restrict competition, under the Competition Act 1998 and/or Article 101 of the Treaty on the Functioning of the European Union. The move is part of the OFT’s investigation into the UK’s OOH sector into whether rebates by outdoor media owners to specialist buyers could affect incentives and worsen deals offered to advertisers. Heather Clayton, OFT senior director of infrastructure,

Out of home, out of favour? Concern over ‘potentially restrictive’ contracts

said: ‘‘There are some concerns around barriers to entry and expansion for media owners and the OFT has launched a competition investigation in order to assess whether certain street furniture agreements are compatible with UK and EU competition law.” Since the investigation is at a very early stage, no assumption should be made

that any of the agreements infringe competition law, she added. In separate, but related, news JC Decaux has toppled Clear Channel to become the largest OOH company in the world, boasting 2010 revenues totalling $3.115 million, says the french company. The firm operates 1,040,600 panels in 56 countries.

Marketers upping new media spending US More than half – 56 per cent – of marketers are upping spend on newer media platforms according to an ANA (Association of National Advertisers) member survey. Another 35 per cent are holding spend at the same level, while nine per cent are reducing their investments. “Reaching audiences with targeted messages via different touch points is more important today than ever,” said

Bob Liodice, ANA president and CEO. “Particularly in targeting multicultural consumers, newer media platforms provide an effective way for meaningful engagement to occur.” The platforms identified in the survey as being particularly effective in targeting multicultural audiences are: SEM (cited as effective by 60 per cent); SEO (58 per cent); firm’s own website (54

per cent); VoD (53 per cent) and online ads on thirdparty websites (50 per cent). While multicultural marketers are increasingly using newer media platforms, they are not ignoring more traditional media. About 6.6 per cent of multicultural media budgets are allocated to these vehicles. Within general marketing strategies, 15.6 per cent are spent on newer media platforms, says a 2009 ANA survey.

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World News

Asia’s ‘Peelable’ ice cream has it licked SE Asia/Europe Nestlé innovation, the ‘peelable’ ice cream, which launched in Thailand last year as Eskimo Monkey, is now available in Europe under the Pirulo brand. Eaten like a banana, a bite is taken from the top of the peelable jelly shell, which then rolls down like a banana skin to reveal an ice cream.

Chocolatier gets taste for “virtual” factory Tcho designing ways for customers to track products online US A r t isa n chocolate co-operative Tcho – which stands for technology and chocolate – is developing an online virtual factory. Real-time sensor data and video is imported from hundreds of sensors on the 30,000-square-foot factory in San Francisco to create the computer-based environment. “We are designing ways for customers to track their own product from point of origin to finished product,” marketing manager Larry Del Santo tells Confectionarynews.com.

Bean there: Tcho’s virtual factory

“In the future, visitors will be able to choose avatars and interact with each other as well as the factory,” he adds. He said the technology will allow the company to create multi-user collaborative spaces for tasks such as factory observation, virtual inspec-

tions, customer visits, employee training, process monitoring, and inventory tracking. The initiative is an example of serious games, which combines high-end game engines with media and data importation for “real-world purposes”. Tcho is developing the project with FXPal, the company which helped create its iPhone app that controls the factory’s machines. Del Santo added that it is helpful to be able to start or stop machines remotely.

A-peeling: Banana-style ice cream

First extended to Malaysia in January under the Matkool brand, the range entered the Philippines in February as Krazy Banana under the Kimy brand. Roll-out in several other, as yet unspecified, countries is slated this year. The range was developed in line with the Nestlé Nutritional Foundation’s requirement of using no artificial colourings and being low in fat and sugar. In Thailand the launch linked in with the Eat Smart Play Hard campaign – backed by the Ministry of Public Health. Focusing on six- to 12-year-olds, it encourages health-conscious food choices, Nestlé says. TVCs, cartoon-style posters and tricycle sellers used easyto-understand instructions to demonstrate the ice cream’s ‘peelability’.

weighty issue

Diet Pepsi’s Skinny Can, which debuted at the Fall 2011 Mercedes-Benz Fashion Week in New York last month, left some consumers fizzing with indignation. Created “In celebration of beautiful, confident women”, said Pepsi. The can rolls out nationwide this month. While fashion-led events support the launch, critics say the campaign, ‘Get the Skinny’, helps fuels low self esteem issues among women.

Col. Sanders junks 50-year-old tagline U K K FC h a s d roppe d it s “finger lickin’ good” slogan after 50 years and replaced it with “so good”. The new tagline is part of a brand overhaul to reflect the CDR’s move to healthier oils and to griddling. Outlets in the UK and Ireland will switch from palm food oil to healthier rapeseed oils, reducing saturated fats by 25 per cent. It will also source oil with-

Changing tastes: KFC brand overhaul

in the UK instead of Asia to cut on food miles while calorie content will be included on menus from September.

KFC is also spending $1.1 million on refitting its UK outlets with ovens so it can launch the Brazer, its first product that is griddled, not fried. Martin Shuker, CEO of KFC & Ireland said that the old slogan was too ‘food centric’. “‘So good’ is still about food but it allows us to more effectively communicate the breadth of different things about the brand.”

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World News

South Africa’s IMC goes Native Inside South Africa The International Marketing Council (IMC) of South Africa – custodians of Brand South Africa – has appointed Native Inside, a client service division of Native. Native is the full service digital marketing solutions agency, formed last year by the merger of Cambrient, Brandsh and Stonewall, which partners with Publicis. South African Tourism is also a client of Native. Native Inside operates from inside the Publicis offices, facilitating work on joint clients, to ensure a streamlined service delivery to the IMC and other Publicis Groupe clients, a Native press release reports.

MEC named AOR for India’s FlipKart India MEC has beaten competition from a multiple agency pitch to become AOR for FlipKart. FlipKart, the three-year-old e-commerce portal based in Bangalore, initially sold books, but has expanded to offer music, movies, games and mobile phones. MEC’s mandate is to increase awareness of the brand, said the agency. Happy was recently appointed FlipKart’s creative agency. “FlipKart as start-up brand/ se r v ic e ha s be en bu i lt entirely by word-of-mouth,”

pride of place

JWT HK walks off with Samsonite Hong Kong JWT Hong Kong has walked off with Samonsite’s entire Asia Pacific business following a four-way pitch. JWT currently handles Samsonite and its American Tourister brand in Shanghai and India. The expanded remit includes delivery of a unified brand idea across multiple media. “They’ll help us deliver a meaningful message about what the many facets of the Samsonite brand represent in today’s world,” said Kenzo Yoneno, assistant director, design and communications, Samsonite Asia. JWT’s pitch-winning brand campaign launches next month.

Actively engaged: Manjiri Kamat

explained Sachin Bansal, CEO. “A move from that ‘buzz culture’ to a mass media campaign is a big shift for us, and we wanted an agency that understood these nuances.”

“It’s a real pleasure to have a brand like flipkart.com on our client roster”, added Manjiri Kamat, managing partner, MEC. “We look forward to adding value to the business through our unique Active Engagement approach.” MEC is part of WPP’s GroupM and has four offices in India employing 130 people. Clients in India include: LG, Colgate, Nivea India, Mercedes-Benz, Zee Network, HDFC Standard Life Insurance, Citi, DHL, Sony Ericsson, Singapore Tourism Board, Singapore Airlines and Honda Motors & Scooters.

The Cannes Lions International Festival of Creativity has introduced a new award, Holding Company of the Year. Any agency that is owned 20 per cent or more by a holding company will contribute points to this award across all sections and categories for both shortlisted and winning entries. The Holding Company of the Year Award will be presented alongside the Agency of the Year, Independent Agency of the Year, Palme d’Or and Network of the Year, in Cannes on June 25. Other special awards given at the festival include Direct Agency of the Year, Media Agency of the Year, Advertiser of the Year, Media Person of the Year and Grand Prix for Good.

Starwood welcomes Dentsu London UK Starwood Hotels & Resorts has appointed Dentsu London to help launch its urban brand Aloft in the UK. Aloft London ExCel opens in London’s Docklands in October. Dentsu London, which won the account without a pitch, is the first agency in the UK to work with Starwood, reports Brand Republic.

The remit spans outdoor, online, experiential and social media. Aloft is positioned as the highly sociable, tech-savvy destination inspired by the celebrated cool of Starwood’s W Hotels. Available in both franchise and managed models, Aloft signed 100 deals within 30

months of its launch in 2008. Georgia-Lee Cleland, marketing manager at Aloft London Excel, told CampaignLive: “Aloft is a unique hotel experience for design-conscious, Generation Y consumers and we needed an agency that could help find and target those people in a convincing and compelling way.”

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news plus

counting the cost of freedom

Region’s marketers recoup to assess economic impact on 2011.

Marketers have been buffeted but not bowed by the recent social turmoil that swept through the MENA region during most of February, but the cost is mounting. The economic impact is still being assessed, but office closures, cancelled events – most notably the Formula One grand prix and GP2 Asia Championship, both in Bahrain – and a sharp drop in tourist arrivals, especially in Egypt and Tunisia, will dent profits for clients and agencies alike. Egypt Speaking from his office in Cairo, Medhat Amin, MD, Mindshare Egypt, tells GMR that a month of inactivity through intermittent office closures has forced a downward revision of 10 per cent for 2011 forecasts. The Egyptian Tourist Authority – ETA – is a key Mindshare client. “What’s unknown yet is for how long clients would remain inactive,” Amin says. “There are two scenarios. If the situation goes back to normal in the coming few weeks, we expect many clients would compensate for the inactive period.

“If not, we expect there will be a drop of at least 30 per cent versus what we had budgeted before the revolution.” “We have already started working on a strategy to bring tourism back to Egypt,” he says. “The revolution brought about a global scare to tourists intending to visit Egypt. However, the Ministry of Tourism is adamant about bringing back the tourists to a better Egypt.” “The decision to reconvene global campaigns as soon as possible had already been taken, however there is some caution as some countries’ governments have issued travel warnings.” Back to normal

Proactive: FP7’s Lina Fateen

Party: Unisono’s Liam Farrell

FP7 Cairo, meanwhile, closed for five days, reports GM, Lina Fateen. “We cannot assess financial losses accurately yet as the situation is still vague with many clients – whose budget reflects hours at the end of the day – but for sure there will be a loss,” she tells GMR, adding that it would be “huge in Q1,” but hopefully pick up between Q2 and Q3. “We’re working on a few proactive campaigns in the meantime to get buyin from clients to sponsor a call for action for productivity, tourism – postcard from Egypt – and change from within,” she adds. Raja Trad, CEO, Leo Burnett MENA, whose Cairo office closed for nearly a fortnight, but had now resumed normal operations says that it was too soon to guage the impact on the network. “Clients have reactivated communications requests and we believe that things will resume normalcy,” he told GMR. Leo Burnett does not have offices in Algeria, Tunisia, Bahrain, Yemen and Libya. Bahrain The economic impact on Bahrain – the

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News Plus

Red flag: Bahrain economy blown off course

We expect many clients either to cease or reduce spend. venue for the 43rd IAA World Congress in March – is more easily estimated given the well-documented benefits of F1. Martin Whitaker, former CEO of Bahrain International Circuit – home to the Sakir F1 track – said that the 2008 grand prix generated $600 million for the economy, as well as changing international perceptions of the Middle East. The upfront investment is considerable, especially for hosting the season opener, traditionally the one to garner the highest global TV ratings. F1 chief Bernie Ecclestone, however, has since waived the $40 million race fee which mitigates some losses, but local sponsors are inevitably short-changed. Public agency The Bahrain Economic Development Board – responsible for attracting FDI to the kingdom and the body behind the Business Friendly Bahrain global awareness campaign – declined to comment, but Gulf Air, the F1 title sponsor, told GMR, somewhat predictably: “We fully support the decision by the Kingdom’s leadership to reschedule the race and we are looking forward to a new date being set and to welcoming the fans and teams later in the year.”

Other brands are said to have paid around $2 million for smaller sponsorships. “It’s a crisis of course,” said DDB Bahrain managing and creative director, Francois Bourgoin, “but I trust Bahrain as a community will do a great job of handling it constructively and as a consequence will emerge a winner, even if in the short- to medium-term this will undeniably affect some businesses and suggest a rethink of Bahrain’s brand image.” Liam Farrell, founding partner and executive creative director of Bahrain-based creative consultancy, Unisono, said the F1 effect had been largely “overhyped”. “Few brands made much of the F1 yearby-year, except main sponsors Gulf Air holding on

Reactivate: Mindshare’s Medhat Amin

Trust: DDB Bahrain’s Francois Bourgoin

or constructors like Toyota. Hotel brands including the Ritz and Gulf Hotel will suffer on fewer numbers for this one weekend, especially as they add a whopping F1 tax on all rooms.” He added that the keenest effect would be felt in the entertainment sector as visitors for the F1 like to party. “The island feels alive for one weekend so we will definitely miss it, but I feel most brands here fail to really make the most of the F1.” Founder of one of Bahrain’s oldest agencies, Gulf Marcom, head of the local IAA chapter and the man who is bringing the IAA World Congress to the kingdom, Khamis Al Muqla remains cautiously optimistic. At the time of writing he told GMR’s sister title Communicate the grand prix cancellation would have an immediate impact on marketing activities, and let’s not forget that GP2 Asia Championship was cancelled too. “So this period, the first quarter, which is a very active period, will be affected,” he said, adding that he was in contact with the IAA pending a board meeting this month when the situation would become clearer. “But let’s be more optimistic,” he concluded. Samir Ayoub, CEO Mindshare MENA, however, speaking about the cancellation is characteristically direct: “We expect many clients either to cease or reduce spend. Nothing is clear or predictable yet.” n

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Media

Critical panning

When Benihana Kuwait served a $18,000 lawsuit against blogger Mark Makhoul for his slightly unfavourable review it received a critical panning from consumers that reverberated across the region and beyond. When japanese brand Benihana Kuwait served Lebanese expat Mark Makhoul with an $18,000 lawsuit for reviewing the restaurant on his blog, it soon found itself in hot water. Many in the Middle East online community have condemned the outlet for what it perceives as an attack on freedom of speech. The review wasn’t especially damning; in fact it was “mild” compared to the tirades other brands – namely telcos – receive. Benihana is not the first company to be caught off guard by issues that have emerged in social media and then snowballed out of control. And it certainly won’t be the last. Brand owners looking to leverage social media must listen and keep an eye on the buzz and sentiment around products. Early detection of negative discussions can help formulate a better crisis management strategy.

Benihana sues customer for review 382* (63.6%)

Questions to Mark248am over twitter 41* (6.83%)

Instead of engaging proactively with Makhoul to find out what prompted his negative comments, Benihana staff started posting fake endorsements of the brand under different identities. What should have been an apology and promise to address Makhoul’s concerns escalated into one big hot mess. As other bloggers and tweeps caught scent of the story, Benihana’s reputation rapidly fell into tatters, tweet by tweet. The “BenihanaKUW” hashtag was created and, at the time of writing, is still going strong with more than 3,500 tweets. Benihana Kuwait’s Facebook page was inundated with comments, some funny, some angry; the Benihana Kuwait GM even asked Makhoul ‘Are you Lebanese?’...the PR equivalent of pouring fat on the fire. Within a few hours these comments were removed and some users blocked.

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The result? A Facebook page titled “Boycott Benihana Kuwait” where criticism of its actions continues unabated. Both Benihana Kuwait and Benihana of Tokyo have remained silent. Meanwhile, millions of people have read the story on blogs, forums and social media platforms. Traditional media have also covered it. On February 14, In a show of strength, the region’s bloggers posted the original review on their own blogs. The brand has been damaged and it will be interesting to find out how this controversy has affected overall restaurant footfall. However, not all is lost for Benihana. It would do well to drop the lawsuit (the case is due in court on March 8). It can

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Retweets 82* (13.6%)

Boycott Benihana 59* (9.83%)

*Mentions across social platforms except where specified

‘Are you Lebanese?’...the PR equivalent of pouring fat on the fire. then leverage whatever positive coverage there is and focus on engaging traditional media outlets and prominent bloggers

and social media ‘influencers’. If social media has destroyed the brand, it can also help bring it back to life.

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Media

What can Benihana do? 27* (4.5%)

Buzz timeline An alarming number of supporters on Mark’s blog

1600 1400

Facebook fan page created “BoycottBenihana-Kuwait”

1200 1000 800

Reviews about the Benihana issue in some of the UAE blogs

600

Benihana will win the case 9* (1.5%)

400

Some news erupts about mark248am being sued for a review he made on Benihana Kuwait

200 0

Article posted on Muslim media network entitled: “Restaurant Review puts blogger in Hot Water”

Jan 30, 2011 Jan 31, 2011

Feb 1, 2011

Feb 2, 2011

Feb, 3 2011

Feb 4, 2011

Sentiment trend

Feb 5, 2011

Negative Positive Neutral

250 200

So what lessons can brands learn from Benihana? When building a brand or engaging customers it is vital to remember how quickly an update (or careless comment) can go viral. Listen to your stakeholders; be transparent, own up to your mistakes, especially on media that you control. You will be surprised how a positive gesture in times of crisis can be quickly amplified. In times of crisis, stop using the head-insand approach. The one thing in Benihana’s favour was it chose not to ignore the issue. However, it did not have a strategy in place for combating negative feedback. The approach was all wrong. n

150 100 50 0

Jan 30, 2011 Jan 31, 2011

Feb 1, 2011

Feb 2, 2011

Feb, 3 2011

Feb 4, 2011

Sentiment polarity

Feb 5, 2011

Negative Positive Neutral

3.0K 2.4K 1.8K 1.2K 600 0

Blog

Discussion

Facebook

Microblog

News

What emotions were people expressing 50

201

Helplessness

Frustration

Trust

Interest

Courage

Worry

Embarrassment

Fear

Shame

Anxiety

Hope

Sadness

Ashwin Salian director Clique Media, UAE

Boredom

Calm

Doubt

Annoyance

Pride

Satisfaction

Disgust

Anger

Surprise

The study saw overall buzz coming from the UAE (54 per cent), Kuwait (27 per cent), Angola (6 per cent), the US (4 per cent), Egypt, Bolivia and KSA (2 per cent each), and India, Oman and Greece (1 per cent).

Source: January 30 to February 11, 2011. Clique Media FZC

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C r e at i v e

Back down to earth

An industry insider descends Mzaar Kfardebian, Lebanon, venue of the 2011 Mena Cristals, with fresh observations. 1. There is no contradiction between creativity and building business. As predicted during the GEMAS effies last November, the gap between creativity and effectiveness is shrinking. Indeed, almost all GEMAS effies winners came out with top awards at the Mena Cristals, many times in several different categories: Exotica “Valentine Make a Move”; Batelco “Debate the Game”, “SimSim O net” and “Notepads”; Dorito “Mixers vs Jammers”; Nivea “Angelstar”; Alfa “Radio Hijack”; and, Birell “Be a Man”. This time, however, they were honoured for their creativity. The ones that did not win a GEMAS effie last year probably stand a very good chance in 2011. My hot tips are: Vodafone Egypt (Kowetna); Blom Bank (demining campaign with MasterCard); and KSARA (Every Bottle Tells a Story).

2. Post-crisis, the region can still compete globally. In this post-crisis recovery period, work is bound to suffer. However, the Middle East is not lagging behind the rest of the world. We have managed to produce world-class work that can compete globally. It may be true that we do not have a huge quantity of work at that level, but we have enough to get noticed and eventually win. In the more traditional categories, such as print and poster, for example, the Middle East has delivered work that will be acknowledged at Cannes, most notably with Batelco’s print work (Directory and Mouth), Harvey Nichols’ Accessories Required, and Le Mall’s Take Her to the Game. That is even more evident in the film category with Batelco’s Infinity, which beat European competition at the CransMontana’s Cristals in December (at the

European version of the MENA Cristals the jury requested changing the rules to give the Cyber Grand Prix to Infinity for both the Middle East and Europe). The real challenge, however, is whether international juries will accept work that is truly local and Arab, such as Vodafone Egypt’s “Kowetna”, as opposed to work crafted to suit global creative standards. 3. The way to go: localisation and realism. Many big winners devised campaigns that were deeply rooted in local cultures, resulting in a standing ovation from the public for Vodafone Egypt (Integrated Grand Prix). In that same spirit, campaigns from Lebanon (Exotica, KSARA, Alfa) and the Egyptian market, (Vodafone, Hyundai, Tiba, Pepsi, Birell and Domino’s Hadji Najji) dominated the contest, showcasing every aspect of local cultures, from the insight,

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tone, language, right down to the cast. These campaigns had a 100 per cent local flavour. Furthermore, they were true to life, whether using real actors to play real people or real people playing themselves. Even when celebrities were used, they acted like real people (former footballer Zinadine Zidane in Wataniya and Egyptian actor Adel Imam in Vodafone). This is most probably the way to go in the coming years as the pendulum seems to have swung again in the direction of typically local work with realism at its core, versus an idealised world. 4. The story: Vodafone Egypt and the power of the crowd. Vodafone Egypt’s “Kowetna” has to be the story of the MENA Cristals 2011. As the Egyptian revolution was unfolding live, the ad had the perfect timing. How many times in the history of an awards event have you showcased an ad advocating power to the Egyptian people as they demonstrated in the streets? All attendees gave a spontaneous standing ovation as the film was aired in celebration of its award victory. That campaign, which had no political intentions, was not only spot on in terms of capturing the state of mind of a population, but I believe it also kick-started what I think is going to be a very big trend in the immediate future of communication: the power of the crowd. Indeed, in today’s connected world, crowds can do amazing things, starting with peaceful revolutions. I believe brands will also take advantage of such capacity to do positive things. However, this is a two-way street, as brands can also suffer severe consequences if crowds turn against them should they do something unethical. Crowds can make your brand famous or infamous.

Hubert Boulos regional managing director MAC DDB, Doha.

Overheard at the Mena Cristals 2011

Party Time: FP7 celebrates its wins

“Ana Masri” (I am an Egyptian) receiving the award for Vodafone in front of a standing ovation. – Rich Wakefield, ECD, JWT Egypt “Don’t be impressed by your seniors. Spend more time in real life and less time looking at compilations of awarded work.” – Bechara Mouzanar, CCO, Leo Burnett MENA. “Internet does not forget.” – Hervé Cuvilliez, CEO, Diwanee “Really good creative work is about people loving it and not about wondering if they got it.” – Ramsey Naja, CCO, JWT MENA “Our success is about love. We want love from our suppliers and partners. If you don’t love me, I will not get the best from you. I ask for love then.” – Antoine Abou Khalil, director, Zain Corporate Communications. “Creativity is about solving a problem. If there’s no problem there’s no creativity, and if controversy is the solution, great, if not it’s stupid.” – Ramsey Naja, CCO, JWT MENA “There are two championships in a year: the obvious one and the one that happens before: the building championship. If you win that one, you can’t go wrong.” – Roland Courbis (former coach of Olympique Marseille and Girondins Bordeaux) “Stick to your morals. If you are not risking your job every day, then you are not doing your job.” – Antoine Abou Khalil, Director, Zain Corporate Communications. Whatever Emmanuelle Beart – said.

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www

C r e at i v e

FESTIVAL GRAND CRISTAL Category

Campaign Name

Client

Agency Name

––

Accessories Required

Harvey Nichols Dubai

Y&R Dubai

GRAND CRISTALS Film

Hajj Nadi

Domino’s Pizza

TBWA\RAAD Dubai

Outdoor

All Terrain

Ets. Kettaneh

Impact BBDO Beirut

Radio

The Hijack

Alfa Managed by Orascom

Leo Burnett Beirut

Magazine

Accessories Required

Harvey Nichols Dubai

Y&R Dubai

Print Craft

Musical Creatures

The Fridge

TBWA\RAAD Dubai

Arabic Cristal

Vodafone Brand Campaign

Vodafone Egypt

JWT Cairo

Promo and Direct

Valentine - Make a Move

Exotica

Leo Burnett Beirut

Cyber

Note Pad

Batelco

FP7/BAH

Simsim O-net

Batelco

FP7/BAH

Debate the Game

Batelco

FP7/BAH

Infinity

Batelco

FP7/BAH

Good Call

Batelco

FP7/BAH OMD

Media

Touch of Ads

Hewlett Packard Middle East

Corporate

Loubnani

Bank Audi

Leo Burnett Beirut

Production Cristal

Zain UNRWA 60 years – It’s a Wonderful Life

Zain Telecom

City Films Production

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C R iti q u e

creative view Dubai Islamic Bank ‘Give’ TVC, Shoe Mart ‘World at Your Feet’ print have done differently, or would have added, is to show that hope and little bit of smile after receiving each pack. When the hero forgot the last pack, I would have shown him smiling, as if he is happy to deliver it again and not bothered by it. I liked that they didn’t show what is inside the packs, because it is a good way to say you can help as much as you can, even if it is a simple thing. The music is very good and played a key role. Client: Dubai Islamic Bank Agency: Milkshake Media, Dubai

Client: Shoe Mart Agency: The Classic Partnership, Dubai Sarosh Daruwalla Director of operations, P&A Kuwait Dubai Islamic Bank ‘Give’ TVC Like – Simple straightforward message linking the act of selfless giving during Ramadan with Dubai Islamic Bank (DIB), thus creating an unsaid connection about DIB’s Islamic identity and values in a positive way. The direction was crisp and captured the emotions pretty well. In other words, I connected with the ad, despite being non-Muslim. Dislike – I don’t think there’s anything that I dislike in this commercial. Shoe Mart Like – The simple header “The World at Your Feet” and clean, uncluttered layout.

Dislike – The image treatment; I thought the execution was not up to standard and they could have been a lot better in their presentation. The series did not evoke any strong passions or motivate me with “Buy Me” signals. Average at best. Ahmed Beck Executive creative director, FP7 Riyadh Dubai Islamic Bank ‘Give’ TVC There were many positive elements that attracted my attention. The tagline at the end is very strong, it says everything. The director of photography did a good job providing the right lighting and mood. I also liked how the director showed us different people and the way they are living in a way that allowed us to feel their difficulties. The only thing I would

Shoe Mart I will start with the positive. The campaign has a very creative edge in terms of fashion photography, compared to other categories in the market. The campaign also has a very nice treatment visually, you can see the separation and focus on the shoe in a very artistic way. It can easily be a three-year campaign and applied to different markets. What’s nice about it is that it is very easy to understand and can relate to all ages. It also works well in terms of marketing and business. If I want to criticise, I would say that it is not very creative and original. You can feel it is not something completely new. n Sarosh Daruwalla

Dubai Islamic Bank Shoe Mart

Ahmed Beck

Dubai Islamic Bank Shoe Mart

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COVER STORY

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Brand outreach

CSR needs to go beyond simple corporate philanthropy into strategic brand reputation management. Precious de Leon looks at who gets it and why the rest are slow to catch up. Some call it return-on-involvement, corporate activism or social performance, while others stick to its more traditional name of CSR. It may already have a whole crop of monikers but, in the Middle East, Corporate Social Responsibility is yet to assume its proper place within most business strategies. Back in 2008, The Economist found that 98 per cent of global businesses believe that CSR is a priority while an IBM study of 250 global business leaders found that 68 per cent are looking at CSR as a platform for sustainable growth. While no one refutes the need for companies to give back to the community, that same IBM study said 76 per cent admitted they didn’t really understand their stakeholders’ CSR expectations. A more advanced view of CSR requires long-term commitment, a clear integration of corporate values and a good understanding of consumers’ expectations of a brand’s involvement within the community. “In every country we’ve done research in and every client we’ve done research

for, there are a set of expectations about what a company needs to do to ‘give back’ to society separate from what it makes or how it is run itself,” Karen Buerkle, VP and director of corporate reputation research for APCO Insight in Washington DC tells GMR. APCO Insights is being introduced in the Middle East following APCO Worldwide’s acquisition of local PR agency Jiwin in November last year. Three years after that IBM survey, global events have forced some companies to take a closer look at the impact of CSR, Social investors

Expectations: APCO’s Karen Buerkle

Shape shifter: WSMENA’s Ziad Hasbani

moving beyond describing it simply in terms of philanthropy. “The post-economic crisis rules of the game have changed and those in the region that didn’t want to acknowledge this before are now being dragged into the new paradigm,” says Ziad Hasbani, CEO Weber Shandwick MENA. It is irrefutable that regaining consumer trust; addressing worries that came with recession; and consumers’ increasing awareness towards ecological issues are reshaping consumer behaviour towards consumption and purchasing. “Engaging with CSR activities helps rebuild trust between the brand and consumers,” says Khalid Hadi, director of brand and corporate communications, ENOC (Emirates National Oil Company). “Research has also found that a lot of people would like to conduct business that is engaged in CSR activities because they know that part of their payment goes into a charitable cause.” Along with the 20-plus CSR initiatives it has developed, the company’s flagship

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Recycling: Q.Media Decaux is promoting eco-friendly transport in Doha, while introducing recycled materials for its street furniture

...corporate responsibility initiatives work best when they have resonance with a business... programme is the ENOC Challenge, which sees the company take in 15 financially less fortunate students and young people with mental health issues to prepare them for the workforce. This year will see ENOC run CSR activities outside the UAE for the first time. It is currently in talks with two charitable institutions in Dubai for initiatives focused on education and school building, particularly in Africa and the Indian subcontinent. “Your brand gets associated with the activities you do and we now want to enhance on the ENOC brand internationally. It has been active in countries such as Singapore, Djibouti and Morocco already, but we haven’t done much on CSR. So we are using this opportunity to build our reputation and our brand in these markets,” says Hadi. Pending approval from local authorities, the company is also planning to launch the independent ENOC Fund in 2012, to support community initiatives. It has also already started on its first sustainability report.

So the cause is not lost at all. There are some regional companies that are taking some strides forward, albeit the overall regional progress is just at an incredibly slow pace. “I believe much has changed in our region in the past few years. As little as three years ago we were still finding some clients think that sending an annual or CSR Drive: q.media Decaux The Ministry of Municipality and Urban Planning in Qatar has partnered with q.media Decaux to launch Q Bike, the first self-service bicycles in the Middle East. A sample station of bicycles has been installed on the Corniche in Doha to collect public feedback on the facility before developing a citywide scheme. Running until April, residents and tourists will be able to use the bicycles and helmets from 3pm to 8pm on a dedicated bicycle track on the Corniche. The service is free of charge and users will be guided on the station by an operator. The project is intended to ease traffic in Doha and promote eco-friendly transport and regular exercise. Apart from the bikes, q.media Decaux is also introducing some products in the airport made of recycled materials. It also uses water-based ink instead of solvent in printing. This requires more expensive machines, but is said to be better for the environment and health of the people undertaking the installation.

twice-annual cheque to charity ‘ticked their CSR box’ and while this kind of activity has both validity and cultural resonance, now there is definitely a greater understanding of how effective corporate responsibility is more than about creating a ‘feel good factor’,” says Hasbani. Aramex is another brand that has taken corporate responsibility to heart. It is one of a few Arab brands that has a dedicated chief sustainability and compliance officer, with a goal to make Aramex a carbon-neutral company – quite a feat for a global logistics company that thrives on hauling packages around the globe in gas-guzzling airplanes. “We don’t call it CSR. We call it Corporate Activism. We believe this reflects our initiatives better,” says Raji Hattar, chief sustainability and compliance officer. “It’s about being active and part of the process in the community as much as it is about making it a part of the business and financial processes.” The company requires its regional offices to set aside at least one per cent of their net profits pre-tax for sustainable projects. Progress is “a slow-moving trend in the region because people are still used to the typical philantrophic mode,” says Hattar. Aside from its focus on education and

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COVER STORY

Fuelling development: ENOC is in talks with organisations focused on education and school building

…some clients think that sending an annual or twice-annual cheque to charity ‘ticked their CSR box’… community rehabilitation through its Ruwwad programme and disaster relief initiatives, about 78 per cent of the company’s cars are currently running on unleaded gas and it is currently working on achieving LEED ratings for its corporate properties in Egypt and Jordan. More significantly, Aramex is integrating its sustainability report (now in its fourth year) into the company’s annual financial report, indicating the correlation between its financial performance and its ‘corporate activism’ programmes. Internal branding Companies are also seeing internal benefits to reaching out to communities. “We also want to create a culture of volunteerism within the ENOC Community,” says Hadi. Regular outreach programmes such as Clean up The Walk (Dubai) and blood donations, as well as volunteering to help pack disaster relief packages are some examples.

Louay Al Samarrai, managing partner, Active PR, sees it not just as an act of goodwill, but also as a morale booster. “The team is more likely to want to stay in an organisation that, while commercially focused, also has the conscience and confidence to pro-actively look for a fresh start

Henkel Arabia is donating part of its 2010 profits from its Persil liquid detergent for White Thobes product to train women in Saudi Arabia in tailoring. The project reinforces the sub-category’s presence while creating jobs for women in the region. The training is done in association with Nafisa Shams Academy for Arts and Crafts, part of Bab Rizk Jameel, which includes Abdul Latif Jameel Community Services Programs.

and offer this kind of consultancy,” he says when asked about pro-bono work. Active PR is involved in at least two of these projects a year, either offering pro-bono work or on a much reduced fee – usually to donations-based companies and young businesses with products in which the agency strongly believes. “Where we do not leverage this is by any self-promotion, we appreciate and welcome these organisations recommending us to their other business partners or contacts and if this generates regular business for us then we are grateful. If it does not, we will always find this fulfilling,” says Al Samarrai, adding that working this way with some start-ups can also benefit agencies, in that once that client gains traction, they will be more likely to stay loyal and reinvest in the agency. Getting involved with charity has also become a way to mark milestones within the company. PHD, for example, ran the PHD Big Hug charity last month to celebrate the agency’s 21st birthday. It’s a series of activities run by PHD’s 74 global offices simultaneously to raise funds for charitable causes. Each office identified a charity to support through raffles, bake sales, bingo events, rugby tournaments, and even donating free media planning

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Reasons for being While the environment, the recession and the general human condition offer a lot of avenues for participation, there must be a strategy behind the selection of causes. “Expectations about what a company should do to demonstrate it is socially responsible usually call on it to leverage its particular expertise to help others (not just itself). For instance, for a major bank we’ve seen expectations that they should help educate people (especially poorer people) on financial literacy issues,” says APCO Insights’ Beurkle. “Similarly, for technology companies it has been things like helping bridge the ‘digital divide’ between rich and poor areas of a country or form technology and education partnerships to make sure schools of all levels are teaching the most relevant skills needed to train the workforce of tomorrow, etc.” WS MENA’s Hasbani agrees. “There’s no doubt that more companies are engaging with the concept of corporate responsibility and that more of their customers and stakeholders are expecting it too. However, it’s an area rife with potential pitfalls and the best intentions can fail to get off the ground if the correct processes haven’t been followed, resulting in often wasted resources, demotivated personnel and even reputational or stakeholder relationship damage. In our experience, corporate responsibility initiatives work best when they have resonance with a business, creating a shared value.” Given that a company chooses CSR drive that is in synergy with its core values and executed well, returns from the community

ENOC Media coverage – 2009 vs. 2010 English Arabic ENOC

support. In the UAE, PHD chose to support the Dubai Center for Special Needs through fund raising and donations. “So while the PHD Big Hug is not really CSR, it was our network’s approach to celebrate our anniversary in a different way, that of a global charity drive, instead of a party,” says Elda Choucair, GM, PHD Dubai.

1,069

2009

1,150

2010 2009 2010 2009 2010

358 332 85 50

Source: ENOC Insights January 2011

200

400

600 800 no. of hits across all media

1000

1200

1400

ENOC Media coverage - Total hits (January – December 2010) 432

ENOC CSR General*

206

Emgas ENOC Brand ENOC Lubricants

146 91 89 71

ENOC Retail Tasjeel HTL ENOC Aviation

* General stories include HR-related, participation in exhibitions, sponsorships, visiting dignitaries, general awards and ENOC statements. Source: ENOC Insights January 2011

45 39 31 50

100

150

200

250

300

350

400

450

500

no. of hits across all media

involvement should be measured, just as with any other corporate initiative. Last year, ENOC’s media coverage saw CSR-related stories account for a majority 37 per cent of the total coverage. General ENOC stories such as exhibitions, sponsorships, conferences and statements, came second with 18 per cent. “In the case of where CSR is embedded into a consumer brand at ‘DNA’ level or a specific brand promotion, it is not always possible to measure success by product sales alone: it may be that a consumer beneficial

Corporate Activist: Aramex’s Raji Hattar

Embedded: ENOC’s Khalid Hadi

is buying a product for a number of reasons quite separate from the CSR element. This is where market research, perception audits, and other marketing tools help to shape the understanding of what the returns are, and how much the CSR element contributes to the brand equity and reputation,” says Hasbani. UM is currently working with some clients to implement internal initiatives aimed at reducing internal office energy and water consumption. In this case, the measure of success is clear and is reflected on the office’s monthly utility bill. In other cases success may be more intangible, such as the implementation of new policies aimed at staff motivation and retention. In addition, the Dubai government recently launched the Hawkamah Institute of Corporate Governance ‘Environment, Social and Governance Index’, developed in partnership with Standard and Poor and the International Finance Corporation. Its premise is to look at the correlation

March 2011 Gulf Marketing Review 39

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COVER STORY

Team effort: Taking corporate responsibility seriously, Aramex is going carbon-neutral

…it’s an area rife with potential pitfalls and the best intentions can fail to get off the ground. between business performance and nonfinancial indicators. CSR’s regional future So where does the future of CSR lie? “We’ve seen a strong desire for visible social investments that ‘put something back’ and these activities need to be things that are clearly available to average citizens, not just well-connected elites,” says Buerkle. “In particular, we’ve noticed a strong desire to train local citizens for leadership roles in enterprises in many Middle Eastern countries where there is a visible lack of corporate leadership among the local population and there is a perception that talented young people must move to Europe or America for a career opportunity.” As for ENOC, aside from it bringing its CSR reach out of the UAE for the first time and plans for an ENOC Fund, the company is in talks with local sports associations such as the Dubai Chess Club, offering to cover fuel costs in exchange

of branding the team’s transportation. The company has also started sharing their CSR model with others. Most recently, it met with the Abu Dhabi Economic Development Department to share its ideas on CSR. In addition, ENOC ran a Safety Driving Campaign during Ramadan, in partnership with Volvo. Brands and agencies are collectively women and children first Silkor Laser Medical Center, has partnered with the Dubai Foundation for Women and Children (DFWAC) on a number of social projects. The initiative is one of the calendar of activities under the Silkor Foundation. It provides vocational training sessions on skin treatments, as well as offers treatments to three women every month, in efforts to help boost their selfesteem and confidence. Having started in September 2010, this is the first phase of the partnership with DFWAC, which houses women and children affected by domestic violence and human trafficking. Based in Beirut, the Silkor Holding management division will also collaborate closely with DFWAC in speaking opportunities at various forums and outreach activities aimed at empowering women.

hoping more companies will follow suit. “We would love to see an uprising of companies moving forward to create corporate reports,” says Aramex’s Hattar. While Choucair sums it up, saying: “We hope that all of us in the marketing industry, who help brands do better every day, harness that same enthusiasm to make a difference by supporting the cause they feel the most connected to.” Looking further ahead, Hasbani says: “CSR marketing will shape-shift from isolated cause support activities (such as mobile phone collection bins in retail outlets or profits from a limited-edition product going towards a nominated cause) to deeper, more meaningful associations with a more limited number of social or environmental causes that are somehow more connected to the core business strategy, accompanied by considered stakeholder management and consistent, well-targeted communication. There are inklings that this forecast is possible. But the pace is slow, as measurability and therefore incentives are still not a priority. So it seems CSR will eventually have its rightful place in business…slowly but surely. n

40 Gulf Marketing Review March 2011

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COVER STORY

Feeling the pressure

Developing countries are realising the benefits of sustainable programmes, just not quickly enough, says study.

Hands up: 45 per cent of respondents in developing countries do not publish their sustainability reports

Only 18 per cent of companies publish their targets and performance in meeting environmental, social and governance sustainability goals on an annual basis, says the Economist Intelligence Unit (EIU). In addition, 40 per cent do not currently publish information on their sustainability practices and have no plans to do so. However, when segmented between the developing and industrialised world, the former has shown greater recognition of the growing importance customers and other stakeholders attach to sustainable business practices. In fact, 45 per cent of those in the developing countries who do not publish their results for sustainability practices say they plan to do so in the next two years, compared to only 19 per cent in developed countries. The research explores companiesâ&#x20AC;&#x2122; commitment to environmental, social and governance (ESG) sustainability goals, and their priorities among sustainability-oriented

practices. The study defines sustainability as operating in a way that ensures longterm viability. Globally, 78 per cent say that a focus on sustainability will be important for their firms in the coming three years. In developing economies, that figure is 85 per cent. The study found that emerging market firms see sustainability-oriented ESG practices as a chance to bolster relations with customers and investors in developed economies. Meanwhile, 54 per cent say customers have the strongest influence on their ESG policies â&#x20AC;&#x201C; more than any other stakeholder. Experts urge caution, though, warning that consumers are fickle, but the influence of regulators and investors appears to be growing. Short-term financial pressures are the main obstacle to commitment to sustainability, says 54 per cent of respondents. Many managers fail to see the opportunities, with only 14 per cent seeing a link between sustainability and short-term profit,

even though some ESG initiatives pay off within a year. Some are divided on the merits of integrated financial and sustainability reporting. Among large firms that 35 per cent report ESG sustainability data annually, yet only 18 per cent publish an integrated report. Not all executives agree on the merits of integrated reporting: some business leaders cite the advantages of targeting individual stakeholder groups with information most relevant to them. Some companies take an ad hoc approach to including sustainability practices in risk management. Just 22 per cent say sustainability is a fundamental part of their risk management programmes; 35 per cent have more of an ad hoc approach. Only 22 per cent expect to begin including sustainability in their risk management in the future. The relationship between ESG and longterm financial performance is crystallising with 76 per cent agreeing that sustainability is a pre-requisite for long-term growth. Similarly, mainstream investors are paying closer attention to sustainability practices. One implication is that poor performance on sustainability could restrict access to capital. n The sustainable future: Promoting growth through sustainability is available at: www.eiu.com About the study Sponsored by Enel, the survey ran between December 2010-January 2011 among 284 senior executives globally, of which 75 per cent are responsible for strategy and business development.

42 Gulf Marketing Review March 2011

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44-53-GMR 196 Q&A alan rutherford.indd 44

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A GRAVEYARD SPIRAL gMr exclusive: Don’t change your agency, change how you manage it… before we all hit rock bottom, urges global IAA chief. Siobhán Adams relays the message. “eArLier i SPOKe about the IAA, which is a tripartite organisation. It has about 3,000 members, including clients, agencies and media owners. One of the things I was talking about earlier with Siobhán is that, in this region, there aren’t any advertisers in the UAE IAA. This is very, very unusual and something we need to address over time. We are now working with the WFA, and I know that you [the ABG] are affiliated with the WFA to try to bring our two organisations much closer. That’s going to be an interesting dynamic. “So, let me come on to some of the key trends in agencies, as I see them. “It’s a very, very different world from what we tend to think it is because the big agencies are all listed, and they’re not operating under the ROI model that we all like to think they are operating under.

alaN RUThERFoRd alan Rutherford is chairman and world president of the International advertising association. he is also chairman and non-executive director of a number of companies, including axiology, which specialises in performance management and ﬁnancial compliancy of marketing services companies, and UK-based digital marketing ﬁrm Volume. previously, Rutherford was CEo of digital Global, worldwide head of media at Unilever and media director at ogilvy & Mather. during a short visit to the UaE late last year, he spoke to the abG. What follows is an edited version of his presentation: Don’t change your agency, change how you manage it.

“It’s actually an RFI – Return for Investors – model. Because, for them, it’s all about shareholder value, about stock-market prices and dividends. This creates some very, very different rules for engagement. “It means that the management teams running those agencies probably work in a different way from what you think. “You already know about the increasing consolidation of agencies and the big four, WPP, IPG, Publicis Groupe and Omnicom. Arguably, there is a sort of second tier emerging, which is Havas and Aegis, the Big Media Group. “Then there are the new holding agencies coming on board. They are largely being driven by private equity. HIG Capital has taken a big stake in Engine and they are now out, going around the world, setting up a new global network.

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Client Servicing

Landgrab: Agencies within a network are usually small offices with their own P&L, battling with an ‘overkill’ of financial management and incentivised against hefty margins

“I’m sure you’ve all experienced agencies who say I can do that, even though you know they don’t have the capabilities... “As, indeed, is new group Obtineo, which is the Carlyle Group, one of the biggest PE companies in the world, and LBI, a big digital agency. They’re doing exactly the same. They are on the acquisition trail. “This changes the game in a number of ways, including the fact that the new hotshops, who I guess we are all interested in, tend to develop themselves with the ambition of being sold. So, again, you’re seeing little differentiation between hotshops among third-tier, second-tier and top-tier holding companies. “And it’s easy to forget that agencies are not big businesses. We’ve all worked in advertising, with big multinational advertisers, which are big businesses. Agencies don’t operate in that mature

way. Even WPP doesn’t operate in that way. They operate as small businesses. “Take JWT, one of the biggest agencies in the world. It has more than 200 offices and employs 10,000 people. Take out New York and London, and that means there are, on average, 40 people per office. That’s not big business. Each office has its own P&L. And they have to follow the rules of the holding company, which are designed to help deliver margins. So there are headcount percentages which they can’t go over. There are office costs to which they have to adhere. There are even fees that they have to pay from their office to the regional HQ and from regional HQ to global HQ. “And they all have margin targets. Those margins tend to be pretty hefty.

And the bonus is paid against those hefty margin targets, which is normally in excess of 15 per cent. “Think about it. Those holding companies then have to report to their investors, Wall Street or the FTSE on a quarterly basis, so the stock price is directly related to quarterly results. You know that quarterly results by quarterly margin are the key factors. And the analyst can’t factor in assets or brand or anything like that. “All they can do is look at the immediate results. It really is a day-to-day results business. “Therefore, agency management teams become crippled by internal reporting and overkill of financial management. They become almost too internally focused. And none of them, whether it’s top-tier, tier two, tier three or the new guys, have the route to financially manage up and resource up, because they are all small businesses. “Given that the holding company’s focus is revenue, growth and margin,

46 Gulf Marketing Review March 2011

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Client Servicing

Key players: Sara Sahely, ABG vice chairperson and manager of group advertising for Emirates, David Porter, media director for Unilever Arabia, and global IAA chief, Alan Rutherford

they have to organise accordingly. Each manager is incentivised on those, so that creates a sort of land-grab mentality rather than a spirit of integration or co-operation. “I’m sure you’ve all experienced agencies who say I can do that, even though you know they don’t have the capabilities of delivering on that kind of function. And, of course, rebates and AVBs, and all that sort of transparency kind of business, that then becomes a driving force for them because they are all motivated by revenue, growth and margins, which are pretty severe in terms of targets they have to achieve. “And it’s definitely changed the brandagency relationship because the success of the brand is no longer, I believe, the predominant measure of success of an agency, and client-service isn’t about the famous strategic partnerships that it used to be, but about ‘how can I serve this client for less cost?’

“It’s a marked change and I can’t blame any particular group. No one group is worse than another because they are all in that particular model. “And, if you look at some of the recent press, it all fuels the scandals that are happening in the agency world. This [press cutting] is the first one I pulled out. It’s called: Ad man tests the limits. Irwin Gotlieb, head of media WPP’s Group M talking about how he can bring the European rebate model into Razor sharp

Smart move: When Publicis acquired Microsoftowned Razorfish, it guaranteed to spend money against Microsoft’s media assets, says Rutherford.

the US. The US is known for being a relatively transparent market. He’s also quoted as saying, a third of European annual profits, of Mediacom, is down to rebates. So you can see how this becomes a driver of the agencies. “Another one, from Publicis, where, in China, the buying group there, Vivaki Exchange, was investigated for corruption. It’s being used to launder money for media brokers and to get additional payments for rebates. “So advertisers need to be very clear on what the role and responsibility of the media agency holding companies are. “Again, back to the US, where the Grey Group was in court for holding monies back, particularly in media production, of some major clients and lost the ruling in the New York courts. And this is a major multinational client. This is a serious issue. “Aegis Media, in Germany, settled with client Danone in June for EUR30 million to end allegations that it had kept its clients’ rebates. “The next involves Leo Burnett and the US army… one client you don’t want to take on is the US army. LB settled in January 2009 for $15.5 million in a case in which it was accused, in part, of marking up bills for pass-through expenses that were supposed to be billed without profit. “Another really interesting one. When Publicis acquired Razorfish. The deal involved some equity, but most of it was a guarantee to spend money against Microsoft – remember Microsoft owned Razorfish – against Microsoft’s media assets. So they were using their client’s money to buy an agency. I gotta say that’s smart. “Other headlines you will probably have had conversations about: remuneration and how each of the agencies will have said how tough it is at the moment – how they’re not making any money. “Well, look at the headlines and you’ll see these major groups have upgraded

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Client Servicing

On the same page: Agencies and procurement are very comfortable discussing revenues and stock prices

Procurement is going into a tough market. And, of course, the agencies are hurting a little bit. their profit margin and total revenues for 2010. How? Given that it’s such a tough environment and that every advertiser is employing their procurement guys to push harder on remuneration? “These are trends from one of the companies within Axiology, an agency remuneration and benchmarking firm. “In 2008 remuneration and total spend was in sync. As we hit recession in 2009, agency compensation fell faster than the amount of money being spent in the market, but in 2009 the agency groups managed to rebalance themselves. “They’ve taken out the number of overheads, cut staff, replaced senior staff with junior staff, etc. So the trend is that remuneration is now moving ahead to spend. They’ve rebalanced and their margin is back on the increase.

“Let’s get on to procurement. “Within the average marketing organisation, procurement can easily find a 20 to 25 per cent saving. They see that as standard. “On the other side, you will hear agencies moaning that procurement all Aboard?

Tripartide: IAA has 3,000 members globally comprising clients, agencies and media owners...but not, it seems, the IAA chapter.

doesn’t understand the value of creativity, which is a fair point. But it’s a biased market. Procurement is going into a tough market. And, of course, the agencies are hurting a little bit. If you are a small, local agency, you’ve only got 40 people, you can’t afford to lose anyone so you do the deal just to keep the cash-flow going through. “We’ve seen the rise of procurement and it’s not surprising really because there’s some low-hanging fruit there as well. There are some key dynamics around procurement within advertisers. “Firstly, everybody knows you can always do it cheaper. The low-hanging fruit, this environment, and the bad publicity surrounding marketing and agencies, procurement has every right to get involved. “And, importantly, they’re talking the same language as agencies these days. The agencies don’t go in and talk about their great creativity, their brands, added values. They are actually very

50 Gulf Marketing Review March 2011

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Client Servicing

Just rewards? ‘The incentive towards malpractice grows daily as the pressure comes from bosses...’

So the industry is in a bit of a graveyard spiral, but I don’t think it has yet hit rock bottom comfortable talking about revenues, their margins, and stock-prices etc. So procurement and agencies are actually on the same page. “Ironically, the agency move towards financial reporting coincides with the rise of procurement. “In the downturn, agencies are prepared to cut margins, do things cheaper. They are desperate for the revenue. “So what does all this mean? “The old adage ‘the cost of everything’ holds true. There is limited focus on the value that the IP of agencies can provide. And agencies are so risk-averse they’re not prepared to gamble on brand success and remuneration being more closely tied to brand success. “And if you sit within marketing, or media or advertising services within an advertiser, you have to be very, very vocal on that point to your senior management.

“The second point is that incentives aren’t necessarily fundamental in this new remuneration model, so agencies look to cut costs… mainly talent and hours in order to gain profitability. “The incentive towards malpractice grows daily as the pressure comes from bosses; as procurement tightens the purse strings. I’ve had an agency boss blame advertisers for malpractice… because he says agencies are left with little choice, as they’d been pushed so hard on remuneration the only way they can make money is by not being transparent. “And let’s not forget that it is a tougher world for other suppliers, media owners, production houses, etc, so there is an environment for rebates to flourish. “In my day at Unilever, we thought if we paid a decent incentive, the agency would work hard to achieve that. Actu-

ally the agency and agency management today is more focused on, ‘can I just get my base revenue in and make sure I’m profitable on that at the moment’ and find other ways of ensuring that they can raise the margin. “I hate to say it but the world’s changed, and probably forever. No CEO or CFO is going to accept a new, higher-priced agency in the remuneration model. And, once agencies have rebates they are not going to accept those being withdrawn. “So the industry is in a bit of a graveyard spiral, but I don’t think it has yet hit rock bottom… because agencies can still be leaner and some advertisers can still improve their position, and rebates and bad practices still grow...” n In next month’s GMR Alan Rutherford recalls his days as head of media at Unilever, where he helped overhaul the marketing services and, in doing so, “brought creative thinking and media closer than I’ve seen in any other agency or client relationship”.

52 Gulf Marketing Review March 2011

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B R AN D ANALY SIS

Doctor feelgood

An injection of branding is just what the region’s healthcare sector needs, Omnia’s Matthew Ronson tells Precious de Leon.

the gcc’s Population stood at 39.26 million at the end of 2009 and is expected to rise by nearly 6.93 million in 10 years, according to a UN report. This will result in increasing medical and general healthcare needs of an ageing and expanding population, which already faces diseases such as thalassaemia and diabetes. Hospitals and governments recognise this, and research firm McKinsey & Company expects investment in the healthcare sector across the region to grow from $12 billion in 2006 to $60 billion by 2025. This will include not just the improvement and expansion of existing healthcare companies, but the entry of global brands. Mayo Clinic has set up a representative office in Dubai, while the Cleveland

Clinic has signed a venture with Abu Dhabi-based group Mubadala. As the number of healthcare brands increases and competition becomes more intense, healthcare professionals are discovering how branding is becoming just as relevant to their industry. “Healthcare companies are realising that in order to build a sustainable brand, they will need to understand PR and marketing, and that branding is important in getting clinical perspective

Matthew Ronson brand director, Omnia Middle East

their message across to the consumers,” says Matthew Ronson, brand director at agency Omnia Middle East. “And as these international brands come in, the market will have to adjust the way it communicates. “Right now there are two ways we see healthcare brands communicate: either they slap a logo or endorsement name on something, or they have advertising messages that tend to be clichéd and don’t do anything to drive consumer belief.” While numbers are unavailable, it is common to hear patients looking outside the region for medical assistance – and Ronson believes poor communication of existing services is partly to blame. As consumers become more interactive with brands in other aspects of their lives, they will soon demand to have the

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same open communication with their clinics and hospitals. This is a global trend that is emerging in the region, brought on by the presence of global brands that already have these branding strategies in place elsewhere. The Equitrend Brand Equity Study last year placed Cleveland Clinic in fourth place in the US in terms of brand trust and brand equity – the highest a healthcare brand has ever reached. In 2006, the clinic wasn’t even on the list, which measures equity not just in healthcare, but across brands in general. Ronson suggests five disciplines for branding in healthcare: 1. Have a big idea: Make sure everything is driven from this big idea. Healthcare companies need to see themselves like any other brand in the consumer world. A core idea is where the branding strategy and everything else follow. 2. Be different. Many in the region struggle to think of a hospital where they would go for specific medical care. And without strong positioning and knowledge of where the specialists are, patients are left with going to the geographically most convenient establishment in hopes it will have the best possible care for their specific ailment. “There’s definitely a blanket perception among patients when it comes to medical facilities in the region,” Ronson says. Healthcare brands need to start thinking about how they can differentiate themselves. Moving away from clinical to lifestyle features, this could range from exceptional customer service to the actual environment itself, including mood lighting and other sensory experiences. In the 2010 ArabHealth exhibition, Philips’ healthcare division, for example, showcased a sensory model that created a relaxed and personalised atmosphere in a CT scan room through lighting, sound, and textures of the materials used. With one of its healthcare clients, Omnia is looking at the possibility of

Right note: Marlow and Frances Cowan became YouTube sensations after their piano performance at Mayo

…[healthcare] advertising messages don’t do anything to drive consumer belief… placing fake trees along the corridor – a warmer alternative to the unnatural feel of fluorescent lights usually seen by patients. The Mayo Clinic in the US extends its branding through a number of experiences that are as simple as placing a piano in their atrium. Initially the idea was to uphold music’s contribution to healing. But that soon gave way to patients and their families playing the instrument. The most famous example of this are elderly couple Marlow and Frances Cowan, who became YouTube sensations when their impromptu piano performance was captured by one of the visitors. The clip currently boasts more than 7.4 million views and has follow-up videos and interviews from patients endorsing the Mayo Clinic. (Mayo also has its own blog and YouTube account.)

3. Engage. It’s vital to engage with patients as well as the internal workforce. As traditional media reaches saturation and as regulation steps up, how can healthcare brands begin to engage people? “Social media will become vital to the medical industry,” Ronson says. “Even now, as engagement becomes significant, it’s still very erratic at best. But there is a growing realisation of the need for more interactive and social campaigns.” Internal branding is equally important, as staff retention is key to creating longlasting relationships with patients. This drives trust, loyalty and confidence in the brand when patients are able to consistently consult with the same practitioner – whether it’s a doctor or nurse. Moving forward, engagement should also include building good relationships with insurance companies, which can help with endorsements and expansion of your audience reach.

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B R AN D ANALY SIS

Healing hands: Consumers feel deep emotional connection with healthcare products and services. That’s why transparency is key

Social media will become vital to the medical industry... 4. Execute. Sweat the details. Healthcare firms need to look at how they are going to bring the brand to life. Everything up to this point is more ethereal. This is where it becomes hands on. Working on internal branding and actual execution of the brand strategy is when a detailed plan of how things are going to be done differently is a must. More importantly, the execution should cover every touchpoint within the customer journey, mapping out the experience under strict budget management.

burden a bit. Emotional connection is arguably deepest with healthcare products and services, and that’s why transparency and open communication is the way forward. With the explosion of the different social platforms – some with more value than others – companies need to find out how they can embrace them and use them to their benefit. Besides having a strong presence in social networks, Mayo Clinic has also mood lighting

5. Be open. Create participation and recognise that the people are moving from being consumers to participants. “While healthcare brands are comparatively more conscientious about spending on marketing and communications, they need to start looking at budgets for these as long-term investments,” Ronson says. The arrival of digital communications platforms has eased this budgeting

Ambient nature: Philips’ healthcare unit has devised a lighting concept for hospitals to create a relaxing environment for patients.

created an advisory service and teamed up with famous chefs to create healthy food options. Ronson admits some of these ideas will happen organically – not overnight but at a generational level. A first step in the region, he says, is a collaboration with educational institutions in educating children and their parents in a range of topics – from having a healthier lifestyle to discussions on diseases. Additionally, technology plays a role in extending a healthcare brand’s reach beyond the clinic or hospital. Dubai Healthcare City recently launched an iPhone application, which is already the third most downloaded healthcare app. Omnia is also looking at the possibility of teaming a healthcare client with a GPS brand. Plans are to programme the GPS systems with directions to the nearest medical facilities and gift them to patients. “Technology will play a huge part in the progress of branding in healthcare as it creates a consumer benefit as much as a brand benefit, while ensuring long-term financial returns,” n Ronson says.

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JEWELLERy & WatCHES Boasting a melting pot of cultures, the GCC is home to a host of giftgiving. We take a closer look and discover all that glitters really is…gold Common currency Let’s celebrate man’s weakness Changing times Boosting UaE sales Online sentiment attention grabbing PaRC analysis PaRC data

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Eloquent metal

Whether it’s a safe haven, status symbol or both, when it comes to consumer preference, gold speaks volumes. Rania Habib reports.

It may no longer be used as currency, but gold has never lost its lustre; the precious metal remains one of today’s most valuable investments. It’s long been held that in times of crisis people look to purchase gold, even when the price is high. “As a general practice, gold as an investment is going up, again and again,” says Dhanji Dedhia, marketing director of Damas. “Why? Because there’s the rational aspect of gold as an investment, and the emotional aspect of gold as jewellery. There’s always a good split between the two.” The intrinsic value of gold provides certainty in uncertain times, says Anuraag Sinha, managing director of Liali Jewellery. “Gold has never been more relevant and important than now. It is a valuable and versatile commodity, covering jewellery, investment and industrial demand,” Sinha adds. According to the World Gold Council (WGC), jewellery accounts for more than two-thirds of annual gold demand, with domestic demand of gold jewellery rising by 73 per cent in volume terms for the first nine months of 2010. India, the largest consumer in terms of volume, is estimated to have accounted for 15 percent of global gold demand last year. The UAE, Japan, Vietnam and Turkey, meanwhile, recorded slightly lower figures in the first nine months of 2010, compared to 2009. “By default, the Asian culture is more value-conscious, and more future-forward looking, so a higher proportion of people perceive gold as an investment. “ O f c o u rs e, w h e n p r i c e s a re volatile, people stay away; but when it’s within a certain range, as it has been [over] the past few months, between $1.400 and $1.600 per ounce (at the time of writ-

Going for gold: Consumers regard gold as a safe investment

ing), people are more comfortable looking at it.” Dedhia says Damas customers regularly invest in gold coins and bars. At Liali Jewellery, Sinha says the launch of a gold collection in the last quarter of 2010, in association with the WGC, proved extremely successful. “The tremendous success of this collection, at a time when gold prices are high, has proven that gold is not just key to preserving wealth and lifetime value benefits, it can be used to entice young, golden era

Investment: Dhanji Dedhia, marketing director of Damas

Intrinsic value: Rani Al-Khatib, managing director of Rasas

fashion-conscious women to redefine self-indulgence,” he says. Rani Al-Khatib, managing director of Rasas, Damas’ Dubai-based advertising agency, calls gold an eloquent metal, and says advertising gold – recession or no recession – is easy, thanks to its intrinsic lustre. “No matter what the economic situation, gold talks to people,” he says. “It reaches out, grabs them, and slowly but steadily draws them in. This is further heightened when the gold happens to be in jaw-dropping designs or coupled with diamonds. This is on the product level, and that’s what gets people hooked. That’s already half the job done. “The rest – the communication – is just a nudge in the right direction; as far as jewellery advertising goes, the communication will always take second place to the jewellery. So our challenge is not so much to give jewellery a platform, because it will always be right up there, more a voice – a seductive, n insistent voice.”

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S E C T O R A N A LY S I S

Gift to retailers

The multicultural demographic of the region provides a host of celebrations, which is great news for retailers.

The GCC is home to people from all over the world. With a large number of Asian, Arab, and western expats, its cities have turned into interesting cultural melting pots, with a host of ethnic and religious occasions to celebrate. Christmas, Eid Al-Fitr, Eid Al-Adha, Diwali and Valentine’s Day are just a few of the many occasions enjoyed in the region. And with so many reasons to celebrate comes gift-giving, a fact capitalised on by jewellers. Dhanji Dedhia, marketing director of Damas, says that along with religious and cultural holidays, there are other reasons to celebrate, such as the Dubai Shopping Festival (DSF). “During DSF, the entire city comes alive and it’s a time to shop, so people

Bridal attraction

Heart-felt: Damas has launched a range specifically for brides. Dhanji Dedhia, marketing director, Damas Jewellery, says: “Over the years, Damas has shared some of the most special and happy moments in the lives of its customers. Its stunning bridal collections have captured and united hearts, and been part of a woman’s most memorable and cherished moments.”

are looking for the best deals,” says Dedhia. He adds that Christmas, although a religious holiday, has become more “neutral” as it coincides with the end of one year and start of a new one. “People want more generic designs that would appeal to larger communities, so we launched 16 collections during Christmas that appeal to everyone: old, young, modern, classic.” Anuraag Sinha, managing director of Liali Jewellery, says purchasing gold or other precious metals during a special occasion or festival has become the norm in this part of the world. “Eid is, of course, culturally known to be a time to buy gold out of the Eidi (cash gift) received from the spouse or parents,” Sinha says.

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“Today this is replaced by fine jewellery as it is more attractive – either in diamonds, pearls or precious and semi-precious coloured stones set in gold. The same is true for Diwali and Christmas, which are celebrated by all and reserved as occasions to buy that special, big piece of jewellery. Globalisation has added new occasions for women to receive jewellery as gifts – on

Valentine’s Day and Akshay Tritiya, for example. However, these purchases are generally smaller, more casual pieces of jewellery.” “We know there are trends before holidays, because it’s very important to gift,” says Lise Anenn, associate media director, MediaVest MENA, whose clients include a luxury jewellery and watch group.

“We break down target groups in order to reach them during the relevant holidays. However, brands send us marketing briefs from their headquarters with very strict international guidelines. The international plan might not think of the local market, so it’s up to us to recommend different sets of advertising dates, without contradicting the international brief.” n

Historic/Forecast • US$ mn • Constant 2009 Prices • Fixed 2009 Exchange Rates 2009 2010 2011 Consumer expenditure on jewellery, silverware, watches and clocks, travel goods MENA 14,167.50 12,244.60 12,749.60 Saudi Arabia 4,086.90 4,309.10 4,536.80 Morocco 1,691.20 1,843.30 1,995.90 Egypt 1,441.80 1,555.40 1,650.10 844.9 956.5 1,066.80 Iran 816.3 831.1 855.8 United Arab Emirates Algeria 594.2 641.8 691.5 Kuwait 362.9 366.1 377.2 Qatar 270.3 303.2 352.6 Jordan 115.8 120.6 126.1 Bahrain 63.5 66.3 69.9 Tunisia 54.2 56.4 59.5

2012

2013

2014

13,314.90 4,773.50 2,174.00 1,777.80 1,164.90 887.2 736.5 394.4 382.2 132.4 73.9 62.9

13,834.30 5,004.70 2,363.70 1,905.40 1,254.00 920 777.2 411.1 394.6 139.2 78.1 67.3

14,368.70 5,232.00 2,544.70 2,043.80 1,333.70 953.3 820.4 427.4 410.1 145.1 82.6 71.6

Sources: National statistical offices/OECD/Eurostat/Euromonitor International

Investments seasonality Luxury 60 Millions

40 20 0 Jan

Feb

Mar

Apr

May

June

July

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

June

July

Aug

Sep

Oct

Nov

Dec

Feb

Mar

Apr

May

June

July

Aug

Sep

Oct

Nov

Watches Millions

6 4 2 0

Jewellery 15 Millions

10 5 0 Jan

Sources: : IPSOS Statex

2008

2009

2010

Eid

Dec End of Year

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S E C T O R A N A LY S I S

Watchmen

While males are more inclined to take a more rational approach to jewellery shopping, they do have a weakness.

Think jewellery and women come to mind, or men buying jewellery for women. The relationship between jewellery and men is rarely a direct one, especially in the region. Broadly speaking, women indulge in luxurious, highly ornamental pieces of jewellery, while men are conditioned to err on the side of discretion. Dhanji Dhedia, marketing director of Damas, says that when it comes to jewellery, the male versus female perspective debate is justified. “Without sounding discriminatory, men are more rational, while women are more emotional when it comes to purchasing jewellery,” he says. “Men look at value from an investment perspective, while women look at how to be the centre of attention. This is a relationship that has existed for a long time.” On the other hand, Anuraag Sinha, managing director of Liali Jewellery, says men’s desire for jewellery is increasing, with the company recently dedicating three collections to them: gold, diamond and accessories.

“Within gold, men’s jewellery is limited to chains and bracelets. Cufflinks and tie pins in gold have become very dated,” Sinha says. “However, men do like to use good cufflinks; we now offer them in highgrade ceramic and stainless steel.” Dhedia maintains that when a man looks at metal, he looks at it as cash, not jewellery. “Jewellery is prominent among men in some cultures, such as those in Asia, for example. People wear small chains, bracelets and rings. Interestingly, design is becoming simpler. But from our perspective, most cultures in the Middle East do not allow men to wear jewellery.” However, Dhedia says men do have a weakness. “I would say what jewellery is to women, fine watches are to men. It has always been a very strong relationship, as it’s a man’s way of indulging himself.” When it comes to marketing to men, Rani Al-Khatib, managing director of Rasas advertising, says it is about communicating with them differently.

“Put an Arab man in front of you and try to persuade him: you’ll mostly be using wit and humour. On the other hand, talking to a woman involves the use of softer words, higher emotions, and warmth overall. With a man, you address the heart in his mind. With a woman, you tickle the mind of her heart.” As for men being the principle buyers of jewellery for women, Dhedia says their role, in this case, is purely transactional. “There is very little of a surprise element, as the woman is very strongly involved in choosing jewellery,” he says. “The man only comes in to pay. The man being a budget facilitator is a trend that is similar among different nationalities.” Sinha says as women have become increasingly independent, they are beginning to choose jewellery on their own. “However, when it comes to high-ticket purchases, it is usually a joint decision with men, who may either be their fathers or their partners.” n

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sign of the times

How watchmakers are moving with the digital tide

MEDIA SPLIT Television Press Outdoor

2008 2009 Jan-Oct 2010 0

100

Source: IPSOS Statex

There’s little use in talking about a digital revolution when digital has swept across every nook and cranny of the marketing world. “We can’t stay behind”, says Roland Streule, president of Rado. “We have to use communication channels used by our consumers. So it’s logical that we are there.” “There” is online, where every marketer wants to be. But how are regional jewellers and watchmakers – perceived as more traditional luxury providers – moving with the digital tide? Streule says Rado, being a 54-yearold brand, highlights the need for it to remain relevant. “If you’re one of the early brands in the market, you run the risk of growing old,” he says. “You have to continuously update yourself, and

stay desirable and actual.” This comes especially in light of Rado consumers’ changing demographic. “The young population is growing quite strongly,” he says, solidifying the brand’s need to be online, where this younger population frequents. At Swatch, chief executive, Arlette-Elsa Emch, says the Swiss company is increasingly using social media as a marketing tool. “We are doing a lot of social marketing,” Emch says. “We are using everything electronic because it’s Swatch, which is a very creative brand. We are aggressively using social media with Twitter and Facebook.” Swiss watchmaker Tissot has modernised its communication to suit its evolving brand strategy. With NBA player and captain of the French national basketball team,

Tony Parker, as the global ambassador of Tissot since September 2010, the brand felt it necessary to move with the digital tide. “We have to adapt the Tissot DNA to new challenges, and try to be ahead of time,” says president Francois Thiebaud. “Omega [a watch manufacturer that also operates under the Swatch group] has an iPhone application [the feature makes it possible to browse Omega’s complete collection, presenting images and technical data for all of the brand’s wristwatches. The Watchfinder function lets users select timepieces which have exactly the specifications they are looking for] and we’re also working on a lot of things involving social media that we cannot discuss yet.” Alternatively, Lise Anenn, associate media director at MediaVest MENA, says brands within the Richemont group tend to be more conservative when it comes to digital media. “The brands are very conservative when it comes to any media at all, actually,” Anenn says. “When it comes to digital, social networks are okay, but they don’t match the image of the Richemont brands; one of the key rules for them is exclusivity.” Liali Jewellery, a Dubai-based retailer, began looking into online marketing in 2009 with Facebook advertisements, but managing director Anuraag Sinha says this is only the beginning. “As a jewellery retailer, we have been one of the very early users of social media for advertising, and it is also a great medium to communicate specific events,” says Sinha. “We started this activity using our own in-house resources, and while we have seen some success with it, we believe that this is only the tip of the iceberg. We have a lot to do, and this media will take us a very long way into the future.” n

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S E C T O R A N A LY S I S

Asian upswing Consumers from the east are helping to keep UAE sales buoyant, writes Rania Habib. In September 2009, after The China National Tourism Administration relaxed the restrictions on travel, Chinese travel agencies began sending tour groups to the UAE for the first time. The number of Chinese visitors to the Emirates is expected to more than double within the next 12 months. Today, more than a year later, an interesting trend has emerged in luxury brand stores: the presence of Chinese sales staff. Anuraag Sinha, managing director, Liali Jewellery, says the retailer has adjusted to this change. “Today, Indians and Chinese form the largest group of Asians spending on premium pieces of jewellery,” he says. “Therefore, in-store, we have specific merchandise that addresses their needs, as well as staff that can facilitate the process.” “We focus on the Chinese because their impact is big,” says Lise Anenn, associate media director at MediaVest MENA, who handles the Richemont group brands. But they are not the only ones who can afford premium pieces, says Anenn, and brands are catering to other groups as well.

There are many Arabs who “are very rich and can afford premium pieces,” she says. “There can be an ad in the newspaper for a watch, they will call the retailer and say they want it, even if it costs half a million dollars. The Chinese are becoming more and more like that as well, and the Russians are like that too. So it’s not only the Chinese, but they are very important.” Dhanji Dedhia, marketing director of Damas, says that segmenting consumers based on demographics works mainly at lower affluence levels. jewel language

Needs: Anuraag Sinha, managing director, Liali

Focus: Lise Anenn, associate media director, MediaVest MENA

“The minute price points go up, consumer segmentation is no longer valid on demographics,” says Dedhia. “At higher levels, we don’t look at Chinese versus Europeans versus Arabs; when it comes to higher-end pieces, it’s more taste-driven across nationalities. “Still, it is worth noting that China and India are performing very strongly, coming up with more millionaires and billionaires, while other parts of the world are struggling. So we promote ourselves in Chinese and in Russian, but as affluence levels go up, the chances of consumers speaking English are higher too. It’s very rare that those who come to our stores don’t speak English.” Anenn says being able to communicate with the customer is key. “We translate visuals into Mandarin, Russian, or Arabic, when needed,” says Anenn. “There is a will to get closer to those people, and it’s work we’re doing on a worldwide level. It’s our strategy to follow people from the minute they leave their country until they get to their destination with our communication.” n

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s e c t o r a n a ly s i s

watch out

When it comes to watches and jewellery the UAE’s consumers are very engaged, with online generating 59,000 searches in a month. By combining search and social media data, Sekari was able to analyse search behaviour and review how watch brands are regarded in the UAE’s online market. Sekari’s first task was to identify the number of searches on Google.ae for jewellery and watch terms. Out of an extensive list of initial keywords the term ‘watch’ showed a disproportionally high volume compared to the other top 20 keywords. This is because people who type in ‘watch’ includes those who want to look at online videos, as well as surfers seeking information about timepieces. The term, therefore, is more likely to be indicative of search intent for the items, with 59,000-plus searches in one month. The volume provides an interesting insight into search behaviour and what people are looking for when it comes to jewellery and watches. Interestingly, ‘engagement ring’ is No 11 out of 20 search terms, with

jewellery and luxury watches retailer Damas being the seventh most-searchedfor term. This suggests a high brand recognition, as many people are directly searching for the jeweller. Taking the top-20 searched-for-terms, we then tried to find out which watch brands were being talked about in social media, and how consumers related to them. Sekari’s sentiment analysis enabled it to identify Rolex as the most talked about watch brand in the UAE, followed by Cartier. Generally, sentiment across luxury watch brands was either fairly neutral or quite positive, and where some fell on the wrong side of the sentiment graph, the reading, on average, was not too negative. Damas had the highest sentiment across all mentions regarding watches and jewellery, coupled with the considerable search volume for its brand name. It is a positive

statement regarding its brand recognition in the UAE. However, the jewellery retailer could make far more out of this start by engaging with online audiences and increasing the reach of the sentiment that is being expressed. If they are not already doing so, watch retailers should monitor online conversations, listen to what is being said about them and react to the needs of these potential customers. It is somewhat ironic that retailers are not paying attention to the social media space. Brands should develop the research required to delve deeper and identify what is being discussed – because, in the end, conversations will take place with or without them. n

Lee Mancini head of Sekari SEO Dubai

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Search and Social Luxury Watch Brand Analysis Top 20 keywords, jewellery and watches market # 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Keyword (UAE) Watch Watches Jewellery Gems Diamonds Jewellers Damas jewellery Bracelets Earrings Pendant Engagement rings Jewels Gold jewellery Wedding rings Watches for men White gold Engagement ring Necklaces Diamond rings Sports watch

Top watch brands by volume of social media sentiment

Search volume 537,636 59,727 30,918 23,509 5,727 5,418 3,255 2,827 2,400 2,327 2,000 1,873 1,627 1,382 1,164 1,136 1,093 1,065 1,022 132

Search Engine Results Pages (SERPS). Research conducted on Google.ae Top 20 keywords with the most amount of searches last month based on local results from Google.ae

Brand Rolex Cartier Omega Chopard Casio Damas Ebel Breitling Piaget Longines Hublot Seiko Citizen Oris Tag Heuer Armani Swatch Tissot Rado Titan Bulgari Perrelet

Sentiment 0.26 0.14 0.25 0.43 -0.25 1.09 0.00 0.00 -0.10 0.33 0.38 0.25 -0.29 -0.17 0.50 0.20 0.40 -0.25 0.00 0.00 0.00 2.00

Volume 47 22 16 14 12 11 11 10 10 9 8 8 7 6 6 5 5 4 3 2 1 1

Number of mentions in social media in the past two months

Social media â&#x20AC;&#x201C; Volume vs sentiment graph 25

HIGH VOLUME NEGATIVE SENTIMENT

HIGH VOLUME POSITIVE SENTIMENT

Rolex (47 mentions) Cartier

Omega

15 Number of mentions

Chopard Casio Piaget

Ebel Breitling Seiko

Citizen Oris Armani Tissot Rado Titan Bulgari

LOW VOLUME NEGATIVE SENTIMENT <2.00

<1.50

Source: Sekari SEO 2011

<0.50

<1.50 Range of sentiment

Damas Longines Hublot Tag Heuer Swatch

LOW VOLUME POSITIVE SENTIMENT 0.50

1.00

1.50

2.00

March 2011 Gulf Marketing Review 71

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SECTOR ANALYSIS

Shining through

Jewellery and watches continue to attract significant media attention. Favourable government policy frameworks and active participation of the private sector have helped the region’s retail sector become one of the world’s most desirable retail environments in terms of investments and revenue generation. According to an RNCOS report published in January, changing market dynamics, rapid economic development, balancing crude oil prices, rising purchasing power and strong confidence are further strengthening the region’s retail sector. In 2009 the sector was valued at more than $425 billion. Not all of the countries reacted in the same way to the economic downturn, however. While

some economies such as Kuwait slumped, others such as Qatar thrived thanks to high demand for its gas. The UAE and Saudi Arabian markets, however, have sustained their dominance for more than a decade and that looks likely to continue. RNCOS anticipates growth at a CAGR of 13 per cent (2009 to 2013) to reach $682 billion by 2013. According to an April 2010 study by Jones Land Lasalle, the focus on luxury brands within existing and future shopping malls in Dubai is likely to diminish as the retail sector put increased emphasis on competitive pricing, creative marketing programmes, convenience shopping and value for money.

This trend is likely to result in the repositioning of both existing and new retail centres away from the previous focus on luxury brands towards value merchandising. The UAE is a hotspot for luxury retail trade, (Zawya, July 2010) with 15 per cent of residents viewing luxury items as part of their lifestyle, says Synovate. The number of designer shops, highend hotels and upscale shopping malls is also on the rise, especially in Abu Dhabi, placing the UAE capital among the top locations for upmarket goods. MEDIA COVERAGE Jewellery We evaluated January 2010’s MENA me-

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Jewellery – January 2011 Volume of coverage Boucheron Bulgari Cartier Chanel Christian Dior Fendi Gucci Hermes Swarovski Van Cleef & Arpels

OTS (Opportunities to see) 57 36 17 41 36 0 8 1 5 73

Newspaper coverage size – in cc 1,359,944 968,061 516,318 1,390,150 1,970,159 0 532,721 140,073 352,923 2,875,706

Magazine coverage size – in pages 0 0 73 73 136 0 0 0 153 195

Newspaper coverage size – in cc 387,000 1,140,263 568,723 355,473 2,420,102 601,923 70,000 654,600 180,000 1,961,426

Magazine coverage size – in pages 0 0 73 90 0 0 0 0 0 149

Review 24.19 25.1 8.1 14 17.06 0 2.38 0.13 0.75 33.14

Advertisement 4 5 1 2 5 0 0 1 0 3

Press release 2 11 1 2 3 0 0 0 0 4

Watches – January 2011 Volume of coverage Boucheron Bulgari Cartier Chanel Christian Dior Fendi Gucci Hermes Swarovski Van Cleef & Arpels

OTS (Opportunities to see) 12 26 25 12 28 13 2 12 4 30

Review 4.44 22.57 8.19 3.56 13.32 4.25 0.19 1.69 1.25 7.73

Advertisement 4 5 1 2 5 0 0 1 0 3

Press release 2 11 1 2 3 0 0 0 0 4

Source: Mediastow January 2011

… other brands displayed further variety in the language penetration with French, Russian and Mandarin… with French, Russian and Mandarin, with the exceptions of Fendi, Hermes and Swarovksi. Overall, in terms of market penetration, the UAE was the most favourable market, followed by Pan Arab, Lebanon, Bahrain and Egypt. In media-type penetration, magazines were a clear winner, followed by newspapers. Publication genres’ diversification showed interesting results. While there is a clear focus on genres such as lifestyle and general interest, fashion and shopping, and celebrity and society, as would be expected, a few brands displayed greater diversification in

other publications such as homes and properties, architecture and interior design, business and catering and hospitality. Watches Regarding watches, while Van Cleef & Arpels ranked first in terms of volume of coverage and NCS, it ranked second in terms of OTS. Christian Dior ranked first in terms of OTS and Bulgari in terms of MCS. Christian Dior ranked second in terms of volume of coverage and MCS. Bulgari was third in both volume of coverage and OTS, while Cartier was third in terms of NCS and MCS.

dia coverage of 10 brands in the luxury jewellery and watches segment: Boucheron, Bulgari, Cartier, Chanel, Christian Dior, Fendi, Gucci, Hermes, Swarovski and Van Cleef & Arpels. Van Cleef & Arpels took the lead in the jewellery segment, achieving the highest volume of coverage, OTS NCS (newspaper coverage size in cc) and MCS (magazine coverage size in pages). While Boucheron achieved the second highest volume of coverage, it came third in terms of MCS with 25.1 pages. Christian Dior was second in terms of OTS with 1.97M, and Swarovski came second in terms of NCS with 153 cc. The language penetration was highly mixed for the 10 brands. While there was a much higher Arabic penetration for Van Cleef & Arpels, Christian Dior and Chanel, English took over for Boucheron, Bulgari and Swarovski. All other brands displayed further variety in the language penetration

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SECTOR ANALYSIS

JEWEllery Brand Boucheron Bulgari Cartier Chanel Christian Dior Fendi Gucci Hermes Swarovski Van Cleef & Arpels

Product placement 36 17 13 28 19 7 6 1 3 44

Advertorial 3 4 0 3 6 1 1 0 1 7

Interview 1 1 1 0 0 0 0 0 0 0

Review 1 2 0 1 0 0 0 0 0 1

Advertisement 11 5 1 4 7 1 1 0 0 13

Press release 5 7 1 5 4 4 0 0 1 8

Product placement 4 10 15 5 15 0 2 8 3 22

Advertorial 1 0 4 3 5 0 0 3 0 1

Interview 1 0 0 0 0 0 0 0 0 0

Review 0 0 0 0 0 0 0 0 0 0

Advertisement 4 5 1 2 5 0 0 1 0 3

Press release 2 11 1 2 3 0 0 0 0 4

watches Brand Boucheron Bulgari Cartier Chanel Christian Dior Fendi Gucci Hermes Swarovski Van Cleef & Arpels

Source: Mediastow January 2011

The language penetration for the watches segment was more evenly balanced between Arabic and English… The language penetration for the watches segment was more evenly balanced between Arabic and English, relative to the jewellery segment. Boucheron, Hermes and Van Cleef & Arpels displayed the greatest language penetration variation in January 2011. In terms of publications’ genres, once more lifestyle and general interest, fashion and shopping and celebrity and society were among the favourites. However, there was a greater focused penetration with men’s, sports, business and women’s publications. Content Analysis January 2011 Messages The majority of media coverage for all of the 10 brands were a combination of advertisements and product placements. However, there were a few press releases, reviews and interviews.

Clippings Clippings ranged from ads, advertorials, product placements, reviews, interviews and press releases. In jewellery, Cartier displayed a high focus on product placements, while Fendi focused on both product placements and press releases. Bulgari was very diverse with seven press releases, five ads, three advertorials and 36 product placements. It is worth noting that Gucci and Hermes did not achieve any press releases in January 2011, while Boucheron, Bulgari and Cartier also featured interviews within their coverage. In terms of watches, Boucheron was the most diversified, while Bulgari focused on product placements, press releases and ads. Fendi, Gucci, Hermes and Swarovski did not achieve any press release coverage.

There was a very high focus on product placements for Van Cleef & Arpels, Swarovski, Cartier and Gucci. Conclusion The media coverage highlights Van Cleef & Arpels, Christian Dior, Cartier, Chanel and Bulgari as the most vocal ones, and it must also be noted that they had a good penetration of product placements, yet they also displayed clipping types’ diversification. The watches segment in general was better diversified. Van Cleef & Arpels and Bulgari also generated a substantial amount of press release coverage with positive messages on sponsorship, participation, new launches and interviews. Gucci, Hermes and Swarovski, on the other hand, had close to no press releases in January 2011. n

Hisham Elzubeir, research director, Mediastow, Dubai

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27775icon GMR280x215 11/02/2011 15:05 Page 1

s e c t o r a n a ly s i s

Gold rush

Ad spend on jewellery and watches is starting to gather momentum following a lacklustre 2009. Ad spend on Jewellery & Watches in the region reversed the slide of 2009 by gaining seven per cent in 2010 to post a total spend of $153 million. The sector was down by nearly 14 per cent in 2009 and in H1 2010 plunged by another 4.5 per cent, compared to H1 2009. However, the sector witnessed a healthy rebound in H2 2010, posting a gain of 14.5 per cent over the same period. Pan Arab Media contributed a quarter of the total ad spend as the sector relied more on local media to communicate its paid messages. Measured spend on Pan Arab Media gained seven per cent in 2010. Saudi Arabia retained its top spending market rank in spite of a three per cent fall in spend in 2010. The UAE followed with a 31 per cent surge in spending in 2010 to be the second highest spender. Kuwait held the third rank amid a decline of two per cent.

Other marketsâ&#x20AC;&#x2122; spending variation were Qatar(+6 per cent), Lebanon(+1 per cent), Egypt(-10 per cent), Bahrain(+16 per cent), Jordan(+15 per cent) and Oman(-13 per cent). Magazines continued to be the most preferred advertising channel as shares increased to 46 per cent of the total spend in 2010, up from 45 per cent in 2009. Newspaper share also increased from 37 per cent in 2009, to 39 per cent in 2010. Overall, print gained 11 per cent. Spending on TV was flat at a three per cent increase that led its share decrease to 10 per cent from 11 per cent. Watches account for 82 per cent of the category share with $126 million, with the remaining 18 per cent spending by jewellery and accessories. Rolex retained its top spending brand position in 2010. Cartier replaced L`azurde to gain second place, making it the third top spending brand in the sector.

The top three spenders in magazines were Rolex, Cartier and Chopard, while in newspaper, Rolex, Swatch and Cartier made the top three. The top three spenders in TV were Rolex, L`azurde and Cartier, in order of spending. Overall, the sector was affected severely in 2009, but the spending in the second half of 2010 indicates spending is likely to go up in 2011. The ad spend is calculated on the media rate cards and does not account for incentives and discounts. The period covered is January to December 2010, compared with January to December 2009. n

Shaharyar Umar analyst Pan Arab Research Centre, UAE

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CMY

2/22/11

12:27:59 PM

S E C T O R A N A LY S I S

CATEGORY: JEWELLERY & WATCHES Millions US$154

Markets Ranking & Media Split (000 US$) Television Rank Market Name & Abbreviation 2008 1 2 3 4 5 6 7 8 9 10 11

Pan Arab Media PAN 46,278 Kingdom of Saudi Arabia KSA 33,340 United Arab Emirates UAE 37,470 Kuwait KWT 12,539 Qatar QTR 12,358 Lebanon LEB 10,040 Egypt EGY 6,500 Bahrain BAH 3,047 Jordan JOR 1,722 Oman OMN 1,821 Other Markets** OTH 2,553 Total AGCC & Pan Arab 148080

2009

%Var’n 2010 YTD

36,454 35,351 25,725 13,088 8,879 9,228 6,272 2,744 1,800 2,268 2,001 125092

38,911 34,466 33,782 12,762 9,442 9,362 5,619 3,190 2,067 1,967 2,357 135698

7 -3 31 -2 6 1 -10 16 15 -13 18 8

2010 13,942 0 49 30 0 1,219 96 0 0 0 739 14760

%Var’n YTD 4 -58 114 -11 -65

146 6

Newspapers 2010 343 19,585 14,523 6,360 7,850 2,335 3,622 2,100 1,223 1,539 377 52582

%Var’n YTD

Magazines 2010

-27 24,626 3 11,699 49 16,350 -7 6,372 8 1,554 7 5,427 3 1,451 24 1,087 23 844 -16 428 69 1,195 12 62227

%Var’n YTD

Radio 2010

9 22 14 2 5 24 -17 3 5 -3 -17 11

0 0 26 0 0 0 0 3 0 0 46 75

Outdoor

%Var’n YTD 333 18 67

2010

Cinema

%Var’n YTD

0 3,182 2,791 0 38 381 450 0 0 0 0 6011

+7%

%Var’n YTD

2010

-52 83 -31 -66 -38 -27

0 0 43 0 0 0 0 0 0 0 0 43

2050 2050

**Other markets: Combined - Syria, Yemen & Arasian

Ranking of markets and media split (000US$) 100%

Category split by market 1% 1% 2% 2% 4% 25%

75% 50%

23%

Pan Arab KSA UAE Kuwait Qatar Lebanon Egypt Bahrain Jordan Oman Others

6% 8% 22%

25% 0%

Total GCC LEV PAN KSA UAE KWT QTR LEB EGT BAH JOR OMN OTH 153925 135698 18227 38911 34466 33782 12762 9442 9362 5619 3190 2067 1967 2357

Television

Newspapers

Magazines

Radio

Outdoor

Cinema

SPLIT BY PRODUCTS – 2010 All Markets

Pan Arab Media

82%

GCC Markets

79% 18%

Watches/clocks Jewellery

Levant Markets

82% 18%

21%

Watches/clocks Jewellery

84%

16%

Watches/clocks Jewellery

TOP BRANDS – ALL MEDIA (000 US$) – 2010 Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Brand Rolex Cartier L`azurde Swatch Omega Chopard Audemars Piguet Longines Patek Philippe Breitling Chanel Tiffany & Co. Piaget Van Cleef & Arpels Rado Aigner Dior Tissot TAG Heuer Cerruti 1881

Pan Arab Media Value 15,504 8,699 4,726 4,309 3,693 3,646 3,460 3,451 3,319 3,039 2,788 2,127 2,015 1,781 1,761 1,759 1,699 1,659 1,641 1,602

Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Brand Rolex Cartier L`azurde Breitling Longines Omega Chopard Patek Philippe Chanel Audemars Piguet Breguet Tiffany & Co. Hublot Titan Harry Winston Lamar Tissot Fortis Bogh-art Zenith

GCC Value 7,213 3,219 3,181 1,735 1,589 1,446 1,043 983 822 597 526 509 489 485 407 404 391 370 366 354

Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Levant Brand Rolex Cartier L`azurde Swatch Chopard Audemars Piguet Omega Longines Patek Philippe Breitling Chanel Piaget Tiffany & Co. Aigner Van Cleef & Arpels Rado Mont Blanc Cerruti 1881 TAG Heuer Dior

Value 13,925 8,127 4,463 3,865 3,470 2,988 2,972 2,871 2,679 2,541 2,426 1,884 1,867 1,758 1,710 1,637 1,509 1,501 1,436 1,427

Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Brand Rolex Omega Patek Philippe Longines Cartier Breitling Audemars Piguet Swatch Nina Ricci Chanel Rosso Nero Ulysse Nardin Hublot Giantto Tissot Fendi Dior L`azurde Tiffany & Co. Breguet

Value 1,579 721 640 580 572 498 472 444 380 362 357 352 333 318 303 290 272 263 260 254

Source: PARC

GCC & Levant

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Dubailynx11_generic_280x215.pdf

09/02/2011

13:36

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S E C T O R A N A LY S I S

CATEGORY: JEWELLERY & WATCHES Advertising Expenditure for Top Products (000 US$) 2008 – 2010 (Jan - DEC) 2008 2009 W&C 129,643 113,248 J&A 38,025 30,562 167,668 143,810

2010 126,150 27,775 153,925

%Var’n Y10/09 11 -9 7

Sh% 82 18 100

2010 Media Split %

TV 9 15 10

NP 42 25 39

MG 44 57 46

RD 0 0 0

OD 5 2 4

CN 0 0 0

Product Growth 2008 - 2010 (000 US$) 140000

W&C

120000

J&A

100000 80000 60000 40000 20000 0%

20%

60%

40%

80%

100%

W&C

Newspapers Television Magazines Outdoor Radio Cinema

J&A 2009

2010

2008

Overall Media Split Analysis (000 US$) Media Television Newspaper Magazine Radio Outdoor Cinema Total

Value 19,467 62,425 79,809 177 5,755 35 167,668

2008

Sh% 12 37 48 0 3 0 100

Value 15,631 53,713 64,119 238 10,107 2 143,810

2009

Sh% 11 37 45 0 7 0 100

Value 16,075 59,857 71,033 75 6,842 43 153,925

2010

Sh%

10 39 46 0 4 0 100

Var'n % 2009/2010 3 11 11 -68 -32 2050 7

Monthly Spend Analysis (Millions US$) 2008 – 2010 100 90 80 70 60 50 40 30 20 10 0

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010

2009

2008

Overall Media Split 2008 – 2010

Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

2008 8 12 13 13 16 17 11 7 19 14 19 19 168

2009 8 11 10 11 13 14 9 8 15 12 16 17 144

Total Category – Media Split %

(000 US$ - Semi Logarithmic)

90000 80000 70000 60000 50000 40000 30000 20000 10000 0

2010 7 11 11 10 13 14 9 10 17 14 20 20 154

Var’n % Y10/09 -14 -2 7 -10 -6 -1 0 25 11 22 26 16 7

10% 39%

46%

2008 Television Outdoor

2009 Newspapers

2010 Magazines

Television

Newspapers

Magazines

+7%

Top brands 2010 (000 US$)

Outdoor

Television Top Spenders Rank Brand 1 Rolex 2 L`azurde 3 Cartier 4 Longines 5 Breitling 6 Omega 7 Clark Ford 8 Titan 9 Lamar 10 Tissot

2010 4026 3267 1780 1175 1169 874 574 489 398 344

Newspaper Top Spenders Rank Brand 1 Rolex 2 Swatch 3 Cartier 4 Omega 5 Audemars Piguet 6 Patek Philippe 7 TAG Heuer 8 Longines 9 Chopard 10 L`azurde

2010 5929 3091 2216 1515 1474 1430 1052 1027 1003 943

Magazine Top Spenders Rank Brand 1 Rolex 2 Cartier 3 Chopard 4 Chanel 5 Audemars Piguet 6 Patek Philippe 7 Piaget 8 Tiffany & Co. 9 Omega 10 Aigner

2010 5495 4580 2328 2163 1984 1889 1319 1290 1263 1216

Radio Top Spenders Rank Brand 1 Orient 2 Romanson 3 TAG Heuer 4 Layali 5 Diamond 6 Fifa 7 Pandora

2010 26 19 12 8 3 3 2

Outdoor Top Spenders Rank Brand 1 Tissot 2 Cerruti 1881 3 Longines 4 Gf Ferre 5 R.cavalri 6 Seiko 7 Thierry Mugler 8 Guess 9 Citizen 10 Givenchy

2010 603 506 384 341 341 288 273 271 261 255

Source: PARC *Please note figures throughout this section are rounded up.

Product & Abbreviation Watches/clocks Jewellery and accessories Total

Millions US$ 154

Media Split %

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