GMR | Oct 2010 by MediaquestCorp.

17 OCTOBER 2010 - NO 191

SECTOR ANALYSIS CONSUMPTION GIVES WAY TO PARTICIPATION IN THE REGION’S MALLS A MediaquestCorp Publication

CLASS

OF 2010 Did your brand make the grade?

CLIENT SERVICING WHY PITCHING’S SUCH A *ITCH

BRAND ANALYSIS TOP 100 GLOBAL BRANDS INDEX

SPECIAL REPORT LUXURY IN THE ERA OF AUSTERITY

Registered in Dubai Media City

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PROFILE National Prawn Company’s Laurence Cook on reeling in the Saudi consumer. 46

www.GMR-Online.com OCTOBER 2010 – ISSUE NO. 191

NEWS

Music and film drop during Ramadan, says PARC. GMR publisher buys leading auto titles. Kuwait Airport’s first 3D TV ads installed. Interim marketing firm launches in UAE. Kellogg’s woos tweens with new chocolate cereal. Turner unveils TBS Arabia. Dubai events company strikes partnership in Saudi Arabia. Florida firm chooses Dubai agency for corporate ID.

WORLD NEWS

CLIENT SERVICING

Life’s a pitch: In a region where pitch lists regularly exceed 10 agencies, one agency chief strikes a blow for fairer practises.

14 MEDIA

NEWS PLUS

SECTOR ANALYSIS TOMORROW’S SHOPPERS

Interbrand’s Best Global Brands League shows there’s no replacement for heritage, legendary status and engagement when it comes to brand values as Coca-Cola stays on top. Tech brands dominate while regional brands don’t make this year’s top 100.

Did Nike’s tie-up with the global Aids effort and Rivoli’s Hourchoice creative chime with our guest critics?

GEMAS EFFIE MENA 2009 26 CASE STUDY

4 Gulf Marketing Review October 2010

IT and auto brands are way ahead of the class when it comes to marketing to students, but other categories are beginning to catch up.

Lego loses 3D trademark action. France’s Quick ﬂips to Halal. Bottled water more eco-friendly than other soft drinks, says quango. Why McDonald’s US is hatin’ it. Edelman acquires Brazilian ﬁrm. SA’s Bester Burke takes brand building to a new level. Love match: FedEx sponsors ATP. China’s ad spend up 16 per cent. Marketers up online video investment in USA. US print offers advertisers results-based deals.

CREATIVE VIEW

COVER STORY TESTING TIMES:

MAC DDB’s Hubert Boulos on the role of creativity and insight in campaign success. Pond’s Age Miracle was the clear winner in the Best New Product Category.

Marketeers and insight professionals must look at a broad range of data sources that will help shape the brand’s landscape of engagement, says Richard Barron.

SPECIAL REPORT

Reaching out to luxury consumers in the new post-recession, valueconscious era.

Future success in retailing relies on servicing the ‘always-on consumer’, the Net Generation. How mobile technology is helping to turn browsers into shoppers. Renewed investor conﬁdence means Beirut could soon outshine Dubai as the bling capital of the Middle East. What exactly will the Mall of the Future look like and will there be any space left for retailing? Why, 14 years on, Dubai’s shopping festivals are still reasons to be cheerful. Mixed fortunes for Saudi malls as recession dents global brands. Sekari SEO company urges online retailers to brush up on their Arabic plus latest ad spend data and analysis from PARC and media coverage breakdown from Mediastow.

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66 SECTOR ANALYSIS: RETAIL MALLS 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

AUDITED BY

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 in the UAE by Atlas Printing Press

6 Gulf Marketing Review October 2010

MANAGING EDITOR Siobhán Adams siobhan@mediaquestcorp.com DEPUTY 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

Saudi Arabia: Ghassan A. Rbeiz ghassan@mediaquestcorp.com Europe: S.C.C Arabies 18 rue de Varize 75016 Paris, France Tel: +(33) 01 47 66 46 00 Fax: +(33) 01 43 80 73 62 Lebanon: Beirut, Lebanon Tel: +(961) 1 202 369 Fax: +(961) 1 202 369

PUBLISHED BY: Medialeader FZ/MediaquestCorp FZ Europe: S.C.C Arabies, 18 rue de Varize 75016 Paris, France Tel: +(33) 01 47 66 46 00 Fax: +(33) 01 43 80 73 62

CO-CEO Alexandre Hawari CO-CEO Julien Hawari CFO Abdul Rahman Siddiqui Managing Director Ayman Haydar General Manager Simon O’Herlihy Creative Director Aziz Kamel Distribution & Subscription Director JP Nair, jp@mediaquestcorp.com Marketing Manager Joumana Haddad, joumana@mediaquestcorp.com KSA GM Tarek Abu Hamzy, tarekah@mediaquestcorp.com, Tel: +966 1 4194061 Lebanon GM Nathalie Bontems, Nathalie@mediaquestcorp.com, Tel: +961 1 492801 North Africa GM Adil Abdel, Wahab, adel@medialeader.biz, Tel: +213 661 562 660 France Sales Director Manuel Dias, dias@arabies.com, Tel: +33 1 4766 46 00

NEWS

Music and movies ﬂop in Ramadan MENA Media consumption habits changed radically during this year’s Ramadan compared to last year, according to top line ratings data from PARC. The changes were due to ﬂexible and shorter working hours. The average time spent watching TV grew, with shorter programmes, such as sitcoms, soaps and religious programmes, in high demand. Movies, music channels and sports, however, fared badly. News programmes were also slightly affected. The total newspaper and TV ad spend grew 34 per cent to $2.1 billion from $1.58 billion last year, largely due to a surge in spend on Pan Arab media and Egypt. The region posted a gain of 42 per cent spending on TV during Ramadan, buoyed by a 49 per cent increase in spending on Pan Arab Media. TV spend during Ramadan hit $1.8 billion. A full report appears in November’s GMR.

SHIP TO SHORE

8 Gulf Marketing Review October 2010

Interim marketing company launches UAE Dubai-based James Hartnell, a marketing veteran of 15 years, has launched his own company. The former marketing director of Sharjah Environment Company, Bee’ah – prior to that he was GM of Nett Results PR – has set up interim marketing company, The Hartnell Marketing Group. HMG provides services for companies that require full marketing provisions for limited- and short-term projects, while a full market-

New venture: James Hartnell

ing department is developed when existing resources need augmenting, he told GMR.

“With a team of experienced professional, they provide valuable marketing insight and application skills on how to maximise the relationship between clients and communications agencies and suppliers.” Interim marketing specialists differ from a typical marketing consultancy role as the former will implement, rather than leave behind, a strategy or plan for clients to carry out themselves, he added.

Events ﬁrm expands in Saudi Arabia KSA/UAE Mamemo Productions has appointed Jeddah-based Imagine! as its corporate representative for the Saudi market. Speaking to GMR about the move, Mememo’s managing and creative director, Sam Katiela, said he was attracted by the opening up of markets in the kingdom during the past 10 years, particularly the

initiation of mega-scale investments outside of oil. “At some point these projects will need to be marketed and communicated to the national and regional audiences – a process that has already started, he said.” He added that while there are no ofﬁcial ﬁgures for the events industry in the region, the fact that Saudi Arabia

accounts for 27 per cent of the total ad spend in the GCC is encouraging. Total ad spend in the region stood at $532 million in the ﬁrst half of 2010. “Each market in the GCC is unique in its identity, concept and strategy. This is particularly true for the Saudi market, where doing business may not necessarily be easy, but deals can be done,” Katiela said.

UAE Dubai-based re-brand-ingTM has created the corporate identity for start-up broadcaster Blue Whale, owned by the Golf World Entertainment Group in Belize. Billed as the world’s first and only floating broadcast centre, Blue Whale delivers golf and lifestyle HD and SD programming to viewers across the globe via satellite broadband and mobile transmission from aboard a 60-metre yacht. The only other dedicated golf broadcaster is The Golf Channel out of the USA, which distributes its programming through affiliate broadcasters globally. The blue whale motif was chosen because the animals can travel at speeds of up 30kmh while communicating with other blue whales across vast oceans. On the logo design, the dorsal fin is formed inside the letter “B”, with transmitter waves “spouting” like jets of water from a whale’s blowhole. The dark blue and subtle grey colour was inspired by the whale’s skin colour, giving it an overall “organic” effect as opposed to the expected electronic techno look, said re-brand-ingTM.

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NEWS

Turner eyes Middle East through new TBS Arabia MENA Turner Broadcasting System (TBS) Europe Limited – a Time Warner company – is investing in regional partnerships and developing plans to increase its presence in the Middle East through its new division, TBS Arabia. Its regional presence so far has produced licensing and development partnerships such as the launch of Cartoon Network Arabia. The network recently tied up with Jordan’s Rubicon and the UAE’s Lammtara Productions, creators of local animation series, Freej. Meanwhile, already available in 22 languages, the freeto-air Arabic version is due to

NEW DIMENSIONS

Kuwait The UK’s Balfour International Group has launched the ﬁrst 3D TV advertising placements in Kuwait Airport. The ads, hosted on 3D duallayer screens, will run until the end of the year in the arrival and departure terminals. Balfour, which specialises in screen advertising and outdoor media, is looking to roll out 3D screens in other airports in the region. “The idea behind the 3D advertising is to show clients how effective 3D technology is in terms of engaging the audience,” said Charles Firebrace, head of business development.

10 Gulf Marketing Review October 2010

Fun times: Cartoon Network will debut with a regional version of Skatoony

premiere at the end of 2010, GMR can reveal. This is the ﬁrst time the TBS channel is broadcast in Arabic, reaching a potential 35 million homes across the MENA region. The company plans to coproduce content and start production on its ﬁrst local kids’ programme, Skatoony, described as “animation meets live action quiz show, where

kids in the Gulf compete against cartoon characters to win prizes”. TBS has signed up to 13 episodes for the ﬁrst series and plans a second series next year. Cartoon Network has made localised versions in the UK, Germany and Canada, as well as a Hindi version. “Another key is recognising that kids’ media consumption

is becoming far more expansive, so we are ensuring all the key media points for kids are being addressed – such as web, mobile and live events. It’s too early to say what we’ll look at, but we are always looking to expand our channel portfolio,” Alan Musa, VP and GM, Africa, ME and Pan Region, TBS, told GMR. Marketing for Cartoon Network Arabia is via TV, print and online, across Saudi Arabia, Egypt, the UAE, Bahrain and Kuwait. Strategy also includes activation within schools and malls. Mediacom is handling media planning while creative is in-house, led by Raf Gasak.

Mediaquest acquires titles from TMF

Driving growth: Mediaquest has expanded its portfolio

UAE In line with its growth strategy, publisher of GMR, Dubai-based Mediaquest Corp. (Mediaquest), has acquired several print and online titles from Dubai-based The Media Factory. The terms of the deal were not disclosed. The acquisitions include Autocar Middle East, F1 Rac-

ing Middle East, Policy (insurance B2B magazine), FourFourTwo Middle East and The Brief. The auto titles and football fan-zine FourFourTwo are licensed from the UK’s Haymarket Media Group Ltd. Mediaquest has also acquired the rights from Hay-

market to publish the Middle East version of Autosport. com, the world’s leading motor sport website. The titles will continue to be supplemented by highproﬁle events, such as Insurex and the Autocar Awards, as well as print supplements, Mediaquest said. Commenting on the deal, Mediaquest’s Co-CEO, Julien Hawari, said: “We are fortunate to have created a talent pool of multilingual and experienced publishing professionals in our editorial, design, sales and marketing teams. This gives us the great conﬁdence to launch these titles into new markets, and provide readers and advertisers with a wider choice of quality media.”

NEWS

Kellogg’s craves bigger share of chocolate cereals Tresor hopes to take 1.5 per cent of Middle East’s RTEC segment by year-end MENA Kellogg’s ME is hoping to take a bigger share of the region’s RTEC – Ready to Eat Cereals – market by wooing the ‘tween’ segment with a new chocolate-flavoured range, Tresor. Described as “soft pillows of cereal filled with a choice of hazelnut or caramelflavoured chocolate”, Tresor is being rolled out across the GCC and Levant. Kellogg’s hopes the new range will command 1.5 per cent in value of the RTEC market by year-end. Its integrated campaign tag lines read: “Chocolate will never be safe again” and

Treasure the moment: Kellogg’s adds tween appeal to breakfast occasion

“Breakfast will never be the same again.” Media includes pan Arab TV, instore displays,

digital, cinema advertising and sponsorship in the UAE and Kuwait, plus activation

in areas where tweens traditionally ‘hang out’. The cost of the campaign, created by Leo Burnett Dubai and planned by Carat ME, was not disclosed. The ﬁrm’s largest RTEC markets in the region are Saudi Arabia, where it has 30 per cent, with the UAE and Kuwait following with 58 per cent each. Kellogg’s say its chocolateﬂavoured lines are the fastest-growing, accounting for 30 per cent of the cereal category in Saudi Arabia. Tresor, which originally launched in France in 2007, is priced at $4.6 a box.

Russian paper comes in from the cold after 17 years UAE An Arabic language Russian affairs newspaper is ofﬁcially relaunching in Dubai 17 years after it stopped publishing in the region. The fortnightly Anbaa Moscu – Moscow News – is published by Russian news agency RIA Novosti (RIAN). Publication resumes this month following the success of pilot issues, said RIAN. Asked why publication had ceased, editor-in-chief Raed Jaber told GMR that many newspapers targeting foreign readership went out of print following the collapse of the Soviet Union. The decision to revive the paper was also, in part, prompted by the success of

12 Gulf Marketing Review October 2010

Read all about it: Anbaa Moscu is back

the English-language edition of The Moscow News, he said. Jaber added that Anbaa Moscu was ranked among the most authoritative foreign media for Arabic audiences, and circulated in all major Arabic countries. “So it seems only natural

now to revive this tried-andtested brand rather than opting for a start-up.” According to Jaber, readership comprises politicians, entrepreneurs and media personalities, plus those generally interested in Russia and Russia-related events. “It should be noted that Arab countries are home to hundreds of thousands of former Soviet university graduates who speak Russian. Many of them have married women from the former Soviet Union, who are also part of our paper’s potential audience, along with their children, he said.” The paper is distributed in 13 countries across the MENA

region – including Iraq – with a total circulation of 190,000, Jaber adds. He declined to comment on whether the paper would apply for BPA auditing, but said advertisers would typically be entrepreneurs, ﬁnanciers and Russian investors interested in expanding their presence in the region.

ERRATUM In September’s GMR Cover Story we incorrectly quoted Scott Feasy, managing partner, Expression, as saying: “FMCG has been generally good throughout, especially in South Africa.” It should have read “Saudi Arabia”. GMR regrets the error and any confusion it may have caused.

WORLD NEWS

Lego loses 3D trademark case Luxembourg Lego has lost its 11-year battle to have its iconic eight-studded red brick a registered trademark. In 1999 Lego registered the 2x4 brick as a 3D trademark. Shortly afterwards Canadian toy maker Mega Bloks Inc (now Mega Brands) applied to have the registration annulled claiming that registration of the block’s form was a contravention of trademark legislation.

Brick wall: Lego trademark denied

However, the court application for the right to register a 3D image of the brick was rejected last month by The European Court of Justice in Luxembourg. The ruling means Lego cannot claim exclusive rights to the use of an eight-studded brick. Lego said it bought the action to protect consumers from being misled. “Analyses show that 40 to 60 per cent of shoppers believe they are buying a Lego product when in fact they are purchasing a different product. “Shoppers see there is a different name on the box – but they believe it is a product line or company owned by us,” said Peter Kjær, head of the Danish ﬁrm’s IP Section.

14 Gulf Marketing Review October 2010

More halal-only outlets for burger chain France’s Quick adapts to fast growing consumer trends. France Quick, France’s secondlargest burger chain after McDonald’s, is to offer halal food in 22 of its 346 outlets. According to Quick, the decision follows successful trials in the Muslim-dominated regions of France, which saw sales double in outlets that tested the concept. During the trial, the outlets, which sold only halal beef and smoked turkey in place of pork bacon, saw a surge in Muslim customer spending. McDonald’s does not serve Halal in France, although KFC has served halal chicken in its French outlets for 20 years. According to a recent survey, the French halal market is worth $7 billion and is expected to grow at 15 per cent a year in line with the burgeoning Muslim middle class, according to research company Solis. The halal

Fastfood: Quick has made 22 of its 346 restaurants halal only

market in France is now, reputedly, twice as large as the organic food market. In the past ﬁve years, spending per household on halal food has grown twentyfold, according to daily newspaper Le Figaro. France’s Muslim population is estimated at ﬁve million out of a total of 63 million. KFC France says it has served

halal chicken in its French outlets for 19 years. Earlier this year KFC was forced to reevaluate its halalonly offerings following disappointing sales during its 86 trial outlets and protests from non-Muslims. Quick is also working on pre-cooked non-halal burgers for those who object to halal.

Water carbon footprint treads more softly Europe The bottled water segment leaves a lighter ecological footprint than other soft drinks, says the European Federation of Bottled Waters (EFBW). The Brussels-based association comprises 26 national trade associations representing more than 500 natural mineral and spring water producers. In its latest ‘sustainability report’ the EFBW claims that it takes less than two litres

Softly spoken: Hubert Genieys

of water to produce one litre of bottled water, the lowest ratio of all packaged drinks.

The report stresses that the industry recycles industrial water in production systems, protects its natural water sources, has been using low carbon or renewable energy sources, and has slashed packaging weight – from 50g for a 1.5-litre bottle in 1986 to 35g in 2009. The federation’s president, Nestlé Waters’ Hubert Genieys, said: “Protecting the environment is a top priority for the sector.”

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WORLD NEWS

Newsprint videos grow 65 per cent USA Online video consumption grew across all media industry categories in the second quarter of 2010, according to the Online Video & the Media Industry Quarterly Research Report. During Q2 unique viewers increased, on average, by 2.8 per cent per month, with consumers watching 11 per cent more videos month-onmonth compared to Q1. The number of viewers watching videos on newspaper sites grew the most over this period, rising 65 per cent from Q1 due largely to coverage of the oil disaster in the Gulf of Mexico. The study also found that referral trafﬁc for video from Facebook and Twitter is growing faster than from traditional search engines. At current growth rates Facebook will surpass Yahoo! by the end of the year to be the second only to Google for video referral trafﬁc. Not only are Facebook and Twitter drawing in viewers, they are also leading to the highest levels of engagement for videos on TV network and music websites, said the report. The report also focuses on brand marketing. Nearly 60 per cent of marketers said they plan to invest more in online video in the next 12 months. More than 65 per cent of brand managers indicated that the primary focus of their online video initiatives is awareness, followed by lead generation (21 per cent) and e-commerce (12 per cent).

16 Gulf Marketing Review October 2010

Media ad spend in China expected to reach $45 billion this year, report says China Measured media ad spending in China is expected to reach $44.9 billion this year, a 16 per cent increase from 2009, according to a new forecast from WPP’s Group M. The study This Year, Next Year: China Media Forecasts also predicted that ad spend in the country would reach $49.6 billion in 2011, an 11 per cent increase over projected spending in 2010. In dollar terms, growth is led by a 16 per cent hike in projected TV spend expected to increase from $24 billion in 2009 to $28 billion this year. Internet ad spend saw the largest percentage gain. It is expected to rise from $3 billion in 2009 to almost $4 billion this year, up 30 per cent. Factors driving growth included: a 173 per cent rise in per capita disposable income in urban areas be-

LIGHTING UP

Lucy Zhang: Era of hyper-fragmentation

tween 2000 and 2009, from $816 to $2,515; three-fold rise in retail sales during this period; increases in retail distribution so advertisers must invest to reach new consumers in tertiary cities; and media inﬂation forcing ad budgets to rise as the cost of communicating with customers goes up. TV remains a seller’s medium in which the big chan-

nels such as CCTV, Beijing TV and Shanghai Media Group have tremendous inﬂuence. Demand for airtime far exceeds supply on these big TV channels, where stringent airtime restrictions also apply, said the report’s author, Lucy Zhang, futures director, Group M China. “The media market is about to begin an era of hyperfragmentation, offering media agencies and advertisers a massive degree of choice when formulating media plans,” she said. “This may come as a surprise to western advertisers who might not normally associate choice with China. The key challenge for advertisers in the country is how agencies manage and evaluate this choice while striving for further media effectiveness and higher returns.”

UK JC Decaux is unveiling its upgraded M4 Torch in London this month, replacing the two digital screens with state-of-theart LED panels. The Torch is located on the stretch of road between the City and Heathrow Airport. It registers 1.8 million impacts every week and an audience that is 67 per cent ABC1, said Decaux. The upgrade provides two 6.75m x 4.5m screens with a 10mm pitch that, Decaux claims, delivers an image three times the quality of the existing screens. The ediﬁce can be rapidly updated and carry multiple creatives, enabling time-sensitive campaigns and countdowns to events or promotions. The ﬁrst campaign is for NatWest Bank, booked through Mediacom and Kinetic.

WORLD NEWS

FedEx serves up new sponsorship Monaco FedEx has signed a three-year global sponsorship deal with the Association of Tennis Professionals (ATP). The company is a platinum sponsor and ofﬁcial carrier of the ATP World Tour. The sponsorship will launch at the 2010 Barclays ATP World Tour Finals in London next month. In addition to marketing rights, FedEx will be a sponsor at 17 ATP World Tour tournaments in 12 countries.

Love all: FedEx extends sports marketing

Reliable performance is the core theme across all activation – and this is reinforced visually with brand exposure on court at tournaments spanning four continents and on ATPWorldTour.com, said Fedex. FedEx will develop an enhanced analysis of player match records, providing fans with added information on player success and consistency on different surfaces, when under pressure and against speciﬁc opponents. This, along with player videos and polls, will be featured in a new section on ATPWorldTour.com called the FedEx Reliability Zone. FedEx has long been active in sports marketing, having sponsored the PGA Tour and the Roland-Garros, among others.

18 Gulf Marketing Review October 2010

Health awareness ad upsets McDonald’s NRA backs fast-food giant over ‘burger in morgue TVC’ protest. USA A hard-hitting TVC featuring an overweight, middleaged, male corpse lying in a morgue clutching a halfeaten hamburger has angered McDonald’s. Produced for the Washington-based non-proﬁt Physicians Committee for Responsible Medicine (PCRM), the advert draws attention to the link between heart disease and high-fat fast food. The ﬁnal shot shows the brand’s golden arches with the tagline beneath reading ‘i was lovin’ it’, while a VO says: “High cholesterol, high blood pressure, heart attacks. Tonight, make it vegetarian.” A spokesman for McDonald’s has slammed the ad. “This commercial is outrageous, misleading and unfair to all consumers. McDonald’s trusts our customers to put such outlandish propaganda in perspective, and to make

They’re hatin’ it: McDonald’s weighs in against PCRM’s obesity awareness TVC

food and lifestyle choices that are right for them,” he said. However, according to Susan Levin, the PCRM’s director of nutrition education, the organisation believes it is making a point about all fast food when it refers to McDonald’s. The National Restaurant Association (NRA) has also weighed in, condemning the

ad “irresponsible”. It was an attempt to scare the public with a “limited” view of nutrition, the association added. The ad will initially air in the Washington area of the USA but is slated for other ‘fast food cities’. It coincides with a campaign, led by First Lady Michelle Obama, to encourage ﬁtness and improve diets, especially among children.

Edelman buys brand marketing firm US/Brazil The world’s largest independent PR agency, Edelman, has acquired Brazilian brand marketing firm Significa. Terms of the deal were not disclosed. The new company, Edelman Significa, will help clients build their brands through causes and content, an approach referred to as “Brand Attitude”, said a company press release. Significa clients include Natura, Itaú, Votorantim Fiat,

Petrobras and Whirlpool. Edelman’s clients in Brazil include Air France, Boeing, Iberostar, GE and Samsung. As a result of the acquisition, Yacoff Sarkovas, CEO of Significa, becomes CEO of Edelman Significa Group Brazil, reporting to Gail Becker, chairwoman, Canada and Latin America, Edelman. Ronald Mincheff remains president of Edelman Significa, São Paulo office, which grew by 17 per cent in 2010.

Signiﬁca organises Com:Attitude, an annual initiative that produces surveys and seminars about brand attitudes in Brazil. More than 4,000 communication professionals have attended the surveys to date. The ﬁrm also has a second business unit named Arbora, which works exclusively for non-governmental organisations, helping to improve its whole value chain. Com:Attitude and Arbora will be integrated within Edelman.

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NEWS PLUS

BEST GLOBAL BRANDS 2010 2009 Brand 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34

1 2 3 7 4 6 9 5 10 11 8 12 13 14 15 16 20 17 19 18 21 24 23 22 26 27 25 28 37 30 31 32 33 29

Coca-Cola IBM Microsoft Google General Electric McDonald’s Intel Nokia Disney Hewlett Packard Toyota Mercedes-Benz Gillette Cisco BMW Louis Vuitton Apple Marlboro Samsung Honda H&M Oracle Pepsi American Express Nike SAP Nescafé Ikea JP Morgan Budweiser UPS HSBC Canon Sony

2010 2009 % change BV* ($m) BV ($m) BV 70,452 68,734 2% 64,727 60,211 7% 60,895 56,647 7% 43, 557 31,980 36% 42,808 47,777 -10% 33,578 32,275 4% 32,015 30,636 4% 29,495 34, 864 -15% 28,731 28,447 1% 26,867 24,096 12% 26,192 31,330 -16% 25,179 23,867 6% 23,298 22,841 2% 23,219 22,030 5% 22,322 21,671 3% 21,860 21,120 4% 21,143 15,433 37% 19,961 19,010 5% 19,491 17,518 11% 18,506 17,803 4% 5% 16,136 15,375 14,881 13,699 9% 14,061 13,706 3% 13,944 14,971 -7% 13,706 13,179 4% 12,756 12,106 5% 12,753 13,317 -4% 12,487 12,004 4% 12,314 9,550 29% 12,252 11,833 4% 11,826 11,594 2% 11,561 10,510 10% 11,485 10,441 10% 11,356 11,953 -5%

BRAND AWARE Coca-Cola hangs on to number one and tech brands dominate, but regional names are nowhere to be seen in this year’s top 100 brands. REGIONAL BRANDS hoping to break into the annual Best Global Brands league still have a lot of work to do, according to the compilers, Interbrand. Speaking to GMR at the unveiling of the 2010 rankings, Matthew Millard-Beer, Interbrand director, Middle East, said: “While the region has many brands that are potentially great, business people need to recognise the role of brands in the growth of their businesses. Brands should be seen as being like any other business asset, in that they require sustained and cohesive activity in order to grow in value.”

20 Gulf Marketing Review October 2009

“In principle, brands in the region need to grow in terms of scale and geography in order to make the list,” he said. In the latest rankings Coca-Cola has been named the world’s best brand for the 11th consecutive year with a brand equity value of $70.45 billion. Technology brands continue to dominate, however, with IBM (#2), Microsoft (#3), Google (#4), Intel (#7) and Hewlett Packard (HP) (#10) in the top bracket. Google sees a 36 per cent increase in value over last year, edging ever closer to rival Microsoft. HP enters the top 10 for the ﬁrst time,

having increased its brand value under a new business model and brand platform. “Apple increased brand value through carefully controlled messaging and an endless wave of buzz surrounding new product launches. HP is expanding into a service provider, offering smart acquisitions and a strong brand platform,” said Millard-Beer. “BlackBerry remains the most popular smartphone for business users, holding off pressure from Apple as it edges into the corporate world. It will be interesting to see how BlackBerry’s brand value

2010 2009 Brand 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67

34 43 38 39 40 36 35 42 46 41 44 48 45 50 47 49 52 57 55 63 54 53 58 60 56 61 New 62 65 67 69 64 81

Kellogg’s Amazon.Com Goldman Sachs Nintendo Thomson Reuters Citi Dell Philips eBay Gucci L’oréal Heinz Accenture Zara Siemens Ford Colgate Morgan Stanley Volkswagen BlackBerry MTV AXA Nestlé Danone Xerox KFC Sprite Adidas Audi Avon Hyundai Yahoo! Allianz

2010 2009 % change BV* ($m) BV ($m) BV 11,041 10,428 6% 9,665 7,858 23% 9,372 9,248 1% 8,990 9,210 -2% 8,976 8,434 6% 8,887 10,254 -13% 8,880 10,291 -14% 8,696 8,121 7% 8,453 7,350 15% 8,346 8,182 2% 7,981 7,748 3% 7,534 7,244 4% 7,481 7,710 -3% 7,468 6,789 10% 7,315 7,308 0% 7,195 7,005 3% 6,919 6,550 6% 6,911 6,399 8% 6,892 6,484 6% 6,762 5,138 32% 3% 6,719 6,523 6,694 6,525 3% 6,548 6,319 4% 6,363 5,960 7% 6,109 6,431 -5% 5,844 5,772 2% 5,777 N/A N/A 5,495 5,397 2% 5,461 5,010 9% 5,072 4,917 3% 5,033 4,604 9% 4,958 5,111 -3% 4,904 3,831 28%

2010 2009 % change BV* ($m) BV ($m) BV New Santander 4,846 N/A N/A 70 Hermès 4,782 4,598 4% 66 Caterpillar 4,704 5,004 -6% 71 Kleenex 4,536 4,404 3% 74 Porsche 4,404 4,234 4% 75 Panasonic 4,351 4,225 3% New Barclays 4,218 N/A N/A 80 Johnson & Johnson 4,155 3,847 8% 76 Tiffany & Co 4,127 4,000 3% 77 Cartier 4,052 3,968 2% New Jack Daniel’s 4,036 N/A N/A 82 Moët & Chandon 4,021 3,754 7% New Credit Suisse 4,010 N/A N/A 92 Shell 4,003 3,228 24% 94 Visa 3,998 3,170 26% 79 Pizza Hut 3,973 3,876 2% 78 Gap 3,961 3,922 1% New Corona 3,847 N/A N/A 72 UBS 3,812 4,370 -13% 86 Nivea 3,734 3,557 5% 15% 95 Adobe 3,626 3,161 84 Smirnoff 3,624 3,698 -2% New 3M 3,586 N/A N/A 88 Ferrari 3,562 3,527 1% New Johnnie Walker 3,557 N/A N/A New Heineken 3,516 N/A N/A New Zurich 3,496 N/A N/A 89 Armani 3,443 3,303 45 91 Lancôme 3,403 3,235 5% 90 Starbucks 3,339 3,263 2% 73 Harley-Davidson 3,281 4,337 -24% 100 Campbell’s 3,241 3,081 5% 98 Burberry 3,110 3,095 0%

2010 2009 Brand 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100

*Brand Value. Source: Interbrand, 2010

holds up next year should a resolution not be met in regard to meeting Middle Eastern governments’ demands to open up its services.” This year a number of brands were mired in crises, resulting in stalled growth, loss of value and, in the case of BP, failure to make the ranking, said Interbrand. BP’s environmental disaster and inability to make good on its brand promise of ‘Beyond Petroleum’ led to it falling off the list and helped competitor Shell emerge as an industry leader. Shell is now ranked 81, up from 92 in 2009. Toyota (#11), a key player in the Middle East’s auto industry, suffered a 16 per cent loss in brand value due to a recall. But it managed to weather the crisis better than expected due to its reputation for reliability, efﬁciency and innovation. Goldman Sachs (#37) was once the envy of Wall Street, says Interbrand,

BP’s environmental disaster and inability to make good on its brand promise of ‘Beyond Petroleum’ led to it falling off the list but now faces the dichotomy of strong economic results and an angry public that will continue to lash out until the company begins to demonstrate that it is making sincere efforts to better

VALUE CONSCIOUS

Adding up: Interbrand’s Matthew Millard-Beer

align its ethics with its brand. Despite the global economic downturn, luxury brands Cartier (#77), Armani (#95), Louis Vuitton (#16), Gucci (#44), Tiffany & Co (#76) and Hermes (#69) all saw the value of their brands increase in 2010. “By investing in their heritage and legendary status, these brands have successfully been able to engage new consumers by constantly innovating and evolving their touch points,” said Millard-Beer. Interbrand’s 2010 Best Global Brands is available at Thebestglobalbrands.com. Q

October 2009 Gulf Marketing Review 21

CRITIQUE

Client: Nike Agency: Arnold Worldwide, USA

CREATIVE VIEW Nike Red Laces TVC, Hourchoice print from Rivoli. Marwan Chahine creative director Leo Burnett Dubai Writing a creative review on a local and global campaign made it clear the amount of work we still have to do as a region to reach international standards. Nike: Red Laces The ﬁght against Aids in Africa needs great brands to drive awareness and engagement, and what better brand than Nike to endorse this cause. Nike has a clear purpose; a purpose that pushes people to embrace change and ultimately aims at changing their behaviour to act. The big idea behind the campaign is very simple: An invitation to “lace up and save lives” in the ﬁght against Aids. And they managed to tie-up with athletes from around the world. Nike has an

22 Gulf Marketing Review October 2010

excellent track record of elevating global causes in order to create awareness and encourage participation. And no doubt this spot is part of a 360-degree integrated campaign inclusive of digital media and social media networks in order to amplify the importance of this issue. As with the idea, the execution of this campaign is simple. It has universal appeal and is not typically African. Moreover, it’s engaging. When watching, you immediately feel like playing around with the lace the way the athletes do or see what else you can do with it. Even the pack shot is done tastefully. I believe this campaign managed to take the global “Aids” red ribbon to a new level, a more practical and human one, making it relevant and engaging by letting people wear it the way they want to as opposed to having no other choice but to pinning it on their chest. And lastly,

I think this is the perfect example of a Humankind act in which a brand steps up and joins a cause. There are endless ways to wear the laces and even more things to do with them, but there’s only one way to show your support in the ﬁght against HIV/Aids in Africa: Lace up. It sincerely encourages me to get involved. Hourchoice It takes courage to run a copy-based campaign when catering to a tactical and promotional objective. And this campaign ticked the box of courage. However, the headlines fall short in the “wit” department; they just weren’t catchy enough. Now the questions are: What is the big idea behind this campaign? How does it communicate what this brand stands for? Will this campaign persuade me as a consumer to go and buy a watch from Hourchoice? I’m not so sure.

Client: Hourchoice Agency: BPG Advertising, Advertising UAE

I have mixed feelings about the art direction of this campaign. While the typography is clean, well thought out and in-line with the brand image, the use of quotation marks visually is not so fresh. Overall, the layout could have been better crafted. Perhaps, if there had been some differentiation between the tactical ads and the generic ones, the ads would have been much more successful in grabbing consumer attention. And, by the way, my watch is from Hourchoice, so I guess I naturally expected to see more.

At a time where everyone is trying to make the biggest TVC, the most expensive TVC, the most astounding VFX, the most… Nike comes along and produces one of the simplest and most inspiring ads I’ve seen in a while. The treatment of the TVC is beautiful and simple. And the way each athlete interacts with the laces is simply brilliant. It’s such a simple and fun to watch commercial. It really makes you want to go to your nearest Nike store and buy at least one of these beautiful red laces.

Rami Traboulsi CEO/creative chief Joe Fish Creative, Beirut Nike: Red Laces Would a brand develop a TVC with allstar, world-class athletes cast to sell red sport shoes laces? Usually, the obvious answer would be no. But if the brand’s name was Nike, and the product was developed with the aim of helping ﬁght Aids in Africa with the help of someone called Bono, then the answer would be: Abso-nike-lutely!

Hourchoice Usually we talk about each ad individually. In the Rivoli Hourchoice, I don’t think I have a choice but to comment brieﬂy on the whole bunch for obvious reasons. It’s a simple typographic template. The layout is simple and clean and generally well balanced. I believe that typographic layouts can be beautiful pieces of art. Not in this case. They are too simple and ﬂat. The colours aren’t helping, especially if they add red in the layout in some of the ads.

And the headlines are not very well thought out. Well, some of them at least. As a consumer, there is nothing that would really attract me in these ads. They are simply too ﬂat and desperately lack a touch of luxury to reﬂect the brand and the products it represents. Overall, it’s an extremely average ad with an average layout and concept. I don’t know how long they have been using this template, but I really think that it’s about time Hourchoice change its ads. Q MARWAN CHAHINE

Nike: Red Laces Hourchoice

RAMI TRABOULSI

Nike: Red Laces Hourchoice

October 2010 Gulf Marketing Review 23

BRAND CHECK

NEW LIFE? Has pharmaceutical company Merck Serono’s new corporate identity pepped up the age old brand? THE PHARMACEUTICAL company Merck Serono’s new tagline, ‘Living Science, Transforming Lives’, descriptively and emotively positions the brand at the heart of medical science, which in itself can only be a good thing. It successfully sums up what the company does – and why it does it – in four very powerful words. Regarding the new conﬁguration of the Merck Serono name, it’s clear that giving Serono equal prominence was an important part of the whole rebranding effort. But the move away from the Merck Group-type style is less successful in

my opinion. While the use of upper and lowercase letters can often give a friendlier and more informal impression, this new typeface is a lot less rounded than the original, giving a somewhat harsh feel – one now far less attached to the Merck Group identity. VERDICT Rating: Merck Serono

Richard Bowcott regional head, Rufus Leonard Middle East

Furthermore, the simpliﬁcation of the original red, yellow and blue icon formation – with the blue lozenge cleverly linking into the initial letter M — also makes it feel less like part of the family. It loses a lot of the scientiﬁc ‘DNA’ idea so prevalent in the Merck Group logo. So, overall I applaud the addition of the new brand positioning line and the prominent position given to the Serono name, but I feel slightly confused as to the merit and logic in moving the rest of the identity away from the strong brand style already established in the Merck Group logo. Q

LONG REGIONAL PRESENCE OLD

NEW

24 Gulf Marketing Review October 2010

Medical professionals gathered at the Burj Al Arab hotel, Dubai, in May to celebrate Merck Serono’s 50-year presence in the region. The company began operations in the Middle East region in the late 1950s. Back then it was known as Merck Pharmaceuticals. The company considers the region to be an important strategic market. It has experienced rapid growth in revenue as well as market share in recent years thanks to increasing demand in the medical sector. Karim Smaira, chief executive of Merck Serono, recognises and celebrates the strong local partnerships developed with the medical community and health ministries in the UAE, as well as other countries throughout the region. The assembled guests were thanked for their efforts in bringing the benefits of improved pharmaceutical technologies and techniques to the UAE. “We are committed to the UAE, to the region, and we will continue to grow as the UAE grows,” Smaira said. The event also saw the unveiling of the new corporate branding for Merck Serono. Smaira said Merck Serono is a company known worldwide for developing breakthrough medicines.

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GEMAS EFFIE

STAR QUALITY As we gear up for the GEMAS efﬁe Mena Awards next month, one of last year’s judges recalls the crucial roles that insight and creativity play in campaign success.

26 Gulf Marketing Review October 2010

Etihad Airways. It strongly leveraged the quest for a bride as a key insight for the Indian audience and tied it to travel offers from the airline. The other new trend that we have recently witnessed is the power of creative ideas to build business. Again, until very late, there was a clear dichotomy between creative ads which were mainly scam ads used for creative awards (and I include in those what agencies call “proactive ads” which are aired once very late on a TV station or published once by a magazine for free etc…), and business building ads. In the GEMAS efﬁe Mena Awards, the region ﬁnally witnessed a world-class campaign, earning a business effectiveness award with Coca-Cola Egypt. Today, the region may have come to the understanding that insights are to be leveraged along with truly creative ideas. This may sound obvious,

but it is very far from being systematic here. I feel that marketers do not want to spend the money required to better understand consumers, and at the same time are terriﬁed of anything that actually has a creative idea. The current economic crisis may actually force the change as competitors may start learning the hard way from the success of the ones who have applied these two simple rules: strong insight plus creativity. Those who don’t realise the importance of a strong consumer insight are bound to fail, as markets are becoming closer to what we could witness in, say, Europe in terms of competitiveness. I do not believe that Arab consumers are any different from the rest of the world. Once you have overcome basic cultural barriers and taboos, successful strategies will be in line with what we see globally:

THE MENA region went through unprecedented growth until late 2008, which honestly did not require effective communications as everyone was successful and every marketer and ad man could brag about business results going through the roof. So basically any strategy worked for a while providing nothing was offensive to local cultures – avoiding religion, politics and sex. At the inaugural GEMAS efﬁe Mena Award last year, at which I was a judge, we started seeing a positive trend: The coming of age of “the insight”. Until then insights were discussed but hardly seen in action. They had more to do with marketing directors’ wishful thinking. Insights hardly came from a deep consumer understanding. Most of the GEMAS efﬁe Mena submissions were based on a strong insight. This includes Grand Prix runner-up

GEMAS EFFIE

ultimate stage of business effectiveness. Nonetheless, developing a TV ad is not the end. Integration has to follow in a much smarter way than the current cutting and pasting of a key visual with a common corporate ID across all media and marketing channels (typical, unproductive and very common behaviour in the region). Today channel planning has to evolve into behavioural planning. This is especially true with the rise of digital.

Very engaging: Etihad leveraged the Indian wedding ritual to create a truly insightful and creative campaign

â&#x20AC;Śnobody is tapping into that local DNA to bring brands to fameâ&#x20AC;Ś s %NGAGE THE MARKET BY ADDRESSING consumer and non consumers, as well as the people who inďŹ&#x201A;uence them (versus opposing users to non users, lapsed users etcâ&#x20AC;Ś). This has been proven successful worldwide (Marketing in the Era of Accountabilityâ&#x20AC;? Binet & Field 2007) and there is no reason why this should not apply to the region. All GEMAS efďŹ e Mena winners in 2009 were in line with that strategy. s 5NLEASH CREATIVITY TO BUILD AN EMOTIONAL bond. Saatchiâ&#x20AC;&#x2122;s Love Mark creator, Kevin Roberts, refers to it as â&#x20AC;&#x153;Love Brandsâ&#x20AC;? for a reason: we now know that most of our purchase decisions are based on emotional thinking versus rational thinking, but for some reason this information has not yet been fully processed in the region

28 Gulf Marketing Review October 2010

with the notable exception of Egypt. However, I am quite conďŹ dent that as our markets become competitive, marketers will be forced to take that into account to survive the future. In the Mena region, brand positions are not as stable and as well entrenched as in the rest of the world. s &ILM ADS ARE KEY &IRST 46 IS NOT DEAD as evidenced by the latest World Cup ratings. It is still the best means to leverage the much-needed emotion to build business. I still see too many brands expecting miracles from print campaigns, because they just do not want to spend on TV production. s 3ECONDLY lLMS CAN BE USED ON THE internet incorporating longer and alternative versions that will be shared to make a brand famous, the

s 4URN CREATIVITY INTO SOCIAL CREATIVITY 4O be effective a brand needs to be talked about and its communication should become a social currency that people will be playing with and passing on, especially with the widespread use of broadband internet. Thatâ&#x20AC;&#x2122;s what we call ShareValue at DDB. I am amazed that nobody is tapping into that local DNA to bring brands to fame. The brands that will be the ďŹ rst to tap into social creativity will revolutionise the market in the very near future. If you need any further evidence just check what branded content Arabs are sharing on Facebook. Right now, no locally generated content is truly worth sharing for a brand. To succeed in the Mena region a strong insight combined with a real creative idea are more necessary than ever, but not enough. The way of the future is social creativity which requires yet another level of creativity and boldness to take a brand from a â&#x20AC;&#x153;well-knownâ&#x20AC;? status to fame. Consumers are ready, the only question is whether local marketers are ready to jump on board, and whether agencies are ready to deliver such ideas. The ones who do will revolutionise the market in terms of effectiveness. Q

Hubert Boulos regional managing director MAC DDB, Doha.

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G E M A S E F F I E C A S E S T U DY

CATEGORY: BEST NEW PRODUCT LAUNCH The top scorers in F&B FMCG category continue our series of GEMAS Efﬁe Mena Awards 2009 winners’ case studies.

THE GOLD AWARD Client: Unilever NAME Sector: FMCG Product: Pond’s Age Miracle Campaign: Love Conquers All Agency: Memac Ogilvy & Mather Dubai Media expenditure: Conﬁdential

30 Gulf Marketing Review October 2010

THE BIG IDEA To underpin the functional anti-ageing rational with emotional engagement: “Notice the difference in seven days or your money back,” plus “See the difference in your husband in seven days”. BRINGING THE IDEA TO LIFE Prelaunch: Engage the trade and internal brand immersion, including incentivisation. Phase1: 360º campaign, including moneyback guarantee to help build trust. Speciﬁc collateral was developed for Saudi Arabia.

Phase 2: Establish romantic brand credentials by challenging the consumer to show her husband the difference in seven days, underpinned by extensive tailor-made instore activation. In LuLu Hypermarket, for example, where the customer proﬁle is mainly Asian, a romantic weekend at the Taj Mahal was offered to two lucky couples, while in Carrefour – mainly European customers – spa breaks were offered. PR and TV also played signiﬁcant roles in maintaining brand awareness. EFFECTIVENESS 5.3 per cent market share in nine months. JUDGES’ COMMENTS “Built on 100 per cent insight.”

THE CHALLENGE To launch the new masstige anti-ageing brand Pond’s Age Miracle across seven MENA markets using the culturally sensitive platform of romance as the core communications driver, while engaging consumers, trade and Unilever employees. Distribution was a major challenge, as skin care has a longer shelf life compared to other non-food items, and that exerts exceptional pressure on the SKUs.

OBJECTIVE To win ﬁve per cent market share within 12 months; to launch simultaneously in 820 outlets; and engage and excite 1,200 Unilever Arabia employees.

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G E M A S E F F I E C A S E S T U DY

THE SILVER AWARD Client: Acres Development Holding Sector: Real Estate Development/Retail Product: Le Mall Campaign: Le Mall Launch Agency: JWT Lebanon Media expenditure: $1 million THE CHALLENGE In taking over failed project the Boulevard Mall in Sin El Fil, Beirut, Acres had to develop the existing architecture, overcome negative associations linked to the old mall, provide the right product mix and create competitive market positioning. It also had to create a brand with a clear edge that could position Le Mall as an alternative shopping destination for the youth and young adults. OBJECTIVE Drive trafﬁc to Le Mall post-launch and entice shoppers to spend around 90 minutes a day there. Create a concept that could be implemented in other districts while building brand equity among the target youth segment. THE BIG IDEA Create a social movement that infiltrates all aspects of social life. Revive people’s personal sense of style in a

32 Gulf Marketing Review October 2010

market where stereotypical images of Lebanese men and women have emerged. Promote individuality in a city where all consumers exhibit a similar personal style. BRINGING THE IDEA TO LIFE Launching Le Mall as a place of selfdiscovery and fashion experimentation through an unbranded, social movement: Iammyself.me. Supplement it with OOH and ambient across the city, including the main exit from the airport. Use

models to hand out “The Manifesto”, created to make the site seem more akin to a social movement rather than a commercial brand, throughout Beirut. Print, radio, PR and events supported the launch. EFFECTIVENESS Daily footfall weekly average increased by 200 per cent to reach 43.799 entrances in September 2009. Two months after opening, Acres Holding confirmed expansion of two new branches. Q

ÂŠ Corbis

COVER STORY

34 Gulf Marketing Review October 2010

STUDENT SUPPORT Learning more about the student sector could gain extra points for brands, writes Precious de Leon. SCHOOL TERM has started, and malls are ﬁlled with offers for grade and high school students. But why is there little communication with those heading for university? There are 38,093 university students in Dubai alone, across 53 federal, government and private institutions, according to July 2010 ﬁgures from the Knowledge & Human Development Authority (KHDA). Education remains high on the agenda for governments in the region. “Since in most Gulf states education reform is a priority, the challenge is to structure the interaction with students in a way that best serves each country’s reform agenda,” says Azza El Shinnawy, public sector education lead for Microsoft Gulf, when asked about the challenges of putting together a student-focused campaign.

Jeddah’s King Abdullah University for Science and Technology opened its doors in September 2009. It currently has close to 400 students from more than 60 countries – from Mexico and China to Saudi nationals. The Kingdom’s ﬁrst co-educational institute could present an opportunity for marketers to reach out to both genders in one academic setting. CLASSMATES

Hi-tech: Intel’s Nassir Nauthoa

Making a connection: VW’s Stefan Mecha

In Riyadh, the Princess Noura Bint AbdulRahman University for Women (formerly King Abdullah University for Women, but renamed in honour of the sister and advisor of the first king, Abdulaziz Al Saud) is under construction. It is scheduled to open in early 2012 and is said to be the largest women’s university in the world. In February 2009, Saudi Arabia appointed its first female minister, Nora Bint Abdullah Al Fayez. A USeducated former teacher, Al Fayez was officially made deputy education minister in charge of a new department for female students. “One of the benefits of targeting university students mainly through events is that you get to talk to a specific and defined prospect in an environment free from competing messages they are bombarded with outside the campus.

October 2010 Gulf Marketing Review 35

COVER STORY

Top of the class: Mercedes-Benz recently held a student design competition inspired by its E-Class Cabriolet model

Students are the most vibrant and creative strata of any society… The university campus is their territory and they usually feel more open and relaxed to communicate with you,” says Fadi El Aswad, marketing manager, Mercedes-Benz Cars, Daimler Middle East & Levant. There are a handful of companies that have seen the potential in marketing to university students. Leading the way are technology and consumer electronics brands. “Microsoft is a company with a clear mission in the education segment and students are at the heart of this mission,” says El Shinnawy. Microsoft developed the Partners in Learning Programme as a pillar for its education initiatives in September 2003. It allows students access to the company’s latest products and offers them preferential rates for purchases. The company cuts across K-12 and higher education levels. “Students are the most vibrant and creative strata of any society, and Mi-

36 Gulf Marketing Review October 2010

crosoft interacts with students on diverse fronts to unleash this potential for creativity and innovation,” adds El Shinnawy. Microsoft Gulf tied up with GEMS Education in the UAE this June to provide students with software offers. As part of its GEMS Education Software programme, students can purchase the latest Microsoft Ofﬁce 2010 Professional Plus for a discounted price of $66, instead of the $517 retail price. The partnership also saw a rafﬂe for Xbox consoles and games as well as netbooks. Another technology brand that has long-term involvement with students is Intel. Over the past decade, the company has invested more than $1 billion towards improving education in 50 countries. Among some of its initiatives are the Intel International Science and Engineering Fair (ISEF) and the more

recent Intel Education Initiative. The company also communicates with this group via its website, inspiredbyeducation.com, a Facebook group of the same name, the CSR@Intel blog and through @intelinspire on Twitter. So why focus on students? “Because students today will be consumers tomorrow,” says Nassir Nauthoa, general manager of Intel, Gulf Countries. “It’s about staying relevant to our audience.” Regionally, the company will continue its initiatives throughout the year via university road shows. It recently brought 150 key Intel and partner delegates to the Higher Colleges of Technology in the UAE to talk with students about the latest offerings in technology. Last May 11 students, from Saudi Arabia, Palestine and Jordan, were recognised at the ISEF, which saw student entrepreneurs, innovators and scientists compete at the largest international pre-college science fair. It was the ﬁrst time that Palestine participated. Technology brands don’t have the monopoly on communication with university students. Across the region

a number of banks are already attuned to this subgroup. In the UAE, MeBank, which was under the umbrella of Emirates Bank International before it became Emirates NBD, had products that were targeted to cater to university students’ banking needs. In Kuwait, Gulf Bank opened the ‘Red’ account for university students, as previously covered in GMR’s August 2007 issue. In addition, brands such as Barbican and Nokia, which are geared towards the youth, have been present in the academic environment through competitions and sponsored events. Although the value of building relationships with students is also registering among brands that have not been readily active in the region’s youth market before, automotive brands have begun to take notice in recent years. In Europe, Volkswagen enjoys an historic connection with college students, with most of them purchasing a VW as their ﬁrst car. This has not been the case in the Middle East. But plans are under way to change this. “What we’d like to do is open communication with students,” says Stefan Mecha, VW Middle East managing director, adding that the brand is in talks with universities across the region in hopes of achieving brand loyalty among students. Volkswagen hosted its ﬁrst university football tournament in partnership with Samaco in Saudi Arabia earlier this year. The month-long initiative saw more than 500 students participating from Sultan Bin Abdul Aziz University in Riyadh, King Fahd University of Petroleum and Minerals, King Faisal University and Prince Mohammed Bin Fahd University in Khobar, and College of Business Administration and King Abdul-Aziz University in Jeddah. The event offered the chance to testdrive the latest Volkswagen models: Passat CC, Scirocco and Golf VI. “We bring the kids closer to the brand and at the same time we create an op-

Learning opportunity: Cisco Digital Media Suite American University of Sharjah

portunity for the parents to get to know the brand more,” says Mecha. Online and social media is a staple in any student-focused campaign. Daimler Middle East, for example, created a microsite for the student-focused initiatives that it runs. The company plans to make signiﬁcant headway in creating and maintaining relationships with students. Its most recent effort was a collaboration in April with French fashion university Esmod through the Express Your Style design competition. The competition involved the submission of designs MAKING PRESENCE FELT

Building relations: Brands such as Barbican have been present in the academic environment through competitions and sponsored events

inspired by Mercedes-Benz’s E-Class Cabriolet model. Besides being given prizes, which included VIP tickets to the Mercedes-Benz Fashion Week event in Berlin in July and two return air tickets, the winners were also allowed test drives, given a special edition silk scarf from the Mercedes-Benz lifestyle collection and a copy of the Mercedes-Benz Fashion Week Berlin Backstage book. “When planning the launch of the E-Cabriolet, aside from the ‘traditional’ communication tools, we wanted to bring the fashion aspect to life. Hence the launch of the first Daimler Middle East & Levant fashion contest in April 2010,” says Daimler’s El Aswad. About 4,000 students voted on the Express Your Style Facebook fan page while Twitter was also used to push the competition. “This was the first fashion contest launched by Daimler Middle East & Levant, but not the first time the brand has worked with students. Back in 2008, Mercedes-Benz general distributor for Dubai and Northern Emirates, Gargash Enterprises, worked closely with the Uni-

October 2010 Gulf Marketing Review 37

COVER STORY

Recognition: Palestinian students were among those awarded at the Intel International Science and Engineering Fair in May this year

Microsoft tied up with GEMS to provide students with a software purchase offer. versity of Wollongong on a senior year advertising project for the CLC launch,” she adds. “Back then the CLC was Mercedes-Benz’s key to appeal and attracted a relatively younger target audience. The brief was for students to launch this new product by creating a through-the-line advertising campaign that will be presented to a panel of judges from the teaching, retail and advertising industries.” Following the fashion contest, the brand launched a regional online competition for its GLK Grand Edition in May, inviting university-age students to create a GLK advert, with the winning concept being published as the ofﬁcial advert of the compact sports utility vehicle. In one month the campaign received more than 80,000 visits to its site, more than 300,000 page views and 2,300 submitted adverts. Saudi Arabia saw the most submissions.

38 Gulf Marketing Review October 2010

Daimler Middle East & Levant is planning to continue developing studentfocused activities in the future. “I believe we need to talk more to university students, not only on new car launches but on safety issues and driving ethics, among others,” says El Aswad. “This segment is important, but we have to interact with them based on NURTURING TALENT

Social values: Damas reaches out to university students as part of its Corporate Social Responsibility Programme

our product mix. We have a large product line-up and it’s obvious that not everything works. We have to cater to this audience with the right product/ offer,” he says There are some brands, though, such as jewellery brand Damas, which reaches out to university students as part of its Corporate Social Responsibility Programme rather than making a straightforward marketing push. It focuses on the aspect of nurturing talent and local skills at the academic level. Earlier this year, Damas sponsored the ﬁfth edition of The Outstanding Students Project, organised by the Supreme Council for Family Affairs – Youth Centres in Sharjah. The project was set up “to honour outstanding UAE male and female students”, according to a Damas statement. With a rise in student population inevitable, brands must seek opportunities to reach out to the youth, and become an important presence in their lives by sharing their experiences and speaking their lingo. Q

COVER STORY

MAKING THE GRADE Focusing spend has never been so easy, says The Lounge, which shares its 10 principles for marketing to students. 1. Make the business case for students University offers a unique opportunity for brands to start a relationship with a new audience. Students are entering a stage of genuine independence and many will be making buying decisions for the ﬁrst time. As one of the only recession-proof demographics, they are doubly attractive. With access to money from the recently reinstated grants, student loans, generous bank overdrafts, credit cards, parents and part-time work, they’re accepting of the $15,000 to $30,000 debt they will amass during their time at university and are happy to spend this money freely on brands they feel deliver quality and value. 2. Focus your spend Why target students separately? While they might consume some of the same

40 Gulf Marketing Review October 2010

media as broader “youth”, their lifestyle and mindset is unique. They label themselves ﬁrst and foremost as “students”; this is their profession. They expect their status and lifestyle to be understood and addressed. Hence the raft of student-speciﬁc media opportunities that have sprung up to reach them in their “walled” university environments. Never has focusing spend been so easy if this myriad of media can be successfully navigated. 3. Immerse yourself in students’ worlds so you can understand their reality Most marketeers who’ve been to uni fall into the trap of applying their own experiences to today’s students, even if that experience was 10 or 20 years ago. Today’s students are bombarded with experiences, media, opportunities and marketing messages. They are,

therefore, increasingly discerning about brands and will only start relationships with those who take the time to truly understand them. 4. Target the ‘right’ students for your brand Students are not a homogenous group. For many, university life presents an opportunity either to reinforce or reinvent their identity. But while the drive to be “individual” is great, the desire to ﬁt in, make friends and belong is greater, quickly morphing into “tribes” according to their lifestyles, interests and values. Examine which tribes hold most synergy with your brand to create a group of true brand advocates. 5. Beware the culture of expectancy Students are incredibly expectant, and with readily available discounts and freebies, who can blame them? But

Online Doctor of Business Administration while discounts are a great way of attracting their attention in the short term, to create any repeat or lasting behaviours in the long term you need to build a relationship by providing ongoing value and benefits. 6. Don’t expect students to ‘do’ too much Hand in hand with expectancy comes the challenge of how to motivate and mobilise students. Think about how you can enhance their existing routines and experiences without asking them to step outside comfort zones. Don’t expect them to do too much. 7. Shared lifestyles No other demographic lives, socialises and spends most of their day with the same people. They are literally in each other’s pockets. This means that if you can attract the influencer in a friendship group you very quickly reach multiple students. This applies in the digital world too. 8. Be the entertainer and the experience provider Students go to university to gain a degree. Well, that’s the official story. Ask any student and they’ll tell you university is all about the experiences and the lifelong friendships formed. It’s these experiences that give them social currency and bonding moments with their newfound friends. Provide the experience and invaluable word-of-mouth will follow. 9. Don’t jump on the Facebook bandwagon without a strategy OK, so nearly half of all students are on Facebook. And it can be a fantastic medium through which to engage them, but only if there’s a point; a reason for them to get involved with your brand. What will they get out of it? What will encourage them to accept your brand into their profiles? How do you become an integral part of their lives and add value to what they’re doing? In short, Facebook should be the vehicle through which to communicate a valid and interesting message, not an end in itself. Plus, for an added tip, see point 7. 10. Timing is everything You might have the best idea and creative and communication strategy, but if you don’t understand daily student life or the wider student calendar, both of which can vary by university, it’s likely you’ll end up on an empty campus or trying to engage them when all they can think about is exams. So, do your research on reading weeks, term dates, exam timetables, popular student nights and other local nuances. Then we have the age-old freshers or not freshers question, but let’s sit down for a chat about that one. Q *The article was originally published on The Lounge’s Blog, dated February 17, 2010.

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October 2010 Gulf Marketing Review 41

COVER STORY

FRESHERS’ FAIR As education moves further up the Saudi government’s timetable opportunities for brands will increase. Sarah Abdullah reports from Jeddah. IMPROVEMENTS IN Saudi Arabia’s education sector have spurred a massive demand for education solutions in certain specialised ﬁelds, while also providing huge potential for international brands to enter the Kingdom. Since ascending the throne in 2005, King Abdullah bin Abdul Aziz has been responsible for streamlining and drastically improving education in the country, especially for women. One of his largest projects is the construction of the world’s biggest university for women, the Princess Noura Bint Abdulrahman University (please see main feature).

42 Gulf Marketing Review October 2010

The project began in the second quarter of 2009 and is expected to be completed in the ﬁrst quarter of 2012. The university will cover eight million square metres and will include administration buisldings, 13 faculties, a 700-bed student hospital, laboratories, research centres, residential areas, mosques, as well as a kindergarten and amusement centre for families and students. Being built at a cost of $11.5 billion, it will have 26,000 students. “It will be a world-class institution providing colleges of medicine, dentistry, nanotechnology, and information technology, ﬁelds of study where

women may have difﬁculty entering because gender segregation is strictly enforced,” Princess Al-Jowhara Bint Fahd, the university’s president, said in a statement. In addition to the massive outlay on the Princess Noura university, King Abdullah has over the past ﬁve years spent a further $55 billion on university education, according to Dr Ali Al Attiyah, deputy minister of higher education. He said that in 2009, $8.5 billion, or 6.7 per cent of the country’s total budget, was allocated to the education sector. “Several initiatives with regards to

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New subjects: The education sector has seen a sea change under King Abdullah

King Abdullah has over the past ﬁve years spent a further $55 billion on university education...

44 Gulf Marketing Review October 2010

These developments highlighted the need to have women at leadership positions in the Ministry of Education, a need that was fulﬁlled by King Abdullah with the appointment of Norah Al Faiz as the deputy minister for women’s education. Norah became NEW LEARNINGS

academic improvement and raising the bar of educational excellence in the Kingdom have been established over the past five years. One such is the King Abdullah Foreign Scholarship Programme, which currently has 85,000 beneficiaries,” Al Attiyah said. Under King Abdullah, not only have new institutions been established and scholarship programmes announced, women have also begun to study in fields that were previously closed to them, such as law, engineering and architecture. These reforms have encouraged more Saudi women to attend university, they now account for 60 per cent of the population on campus.

Growing presence: Women now account for 60 per cent of the population on campus

the first woman to be appointed to cabinet. But it is not all about educating women and producing more graduates. The government is also working to rid the society of cultural norms that forbid women from working. Since allowing women to study law in 2007, many law companies have been employing female lawyers as legal consultants. But as yet women have not been able to represent clients in courtrooms because of strict laws. In February, a draft law was proposed to allow female lawyers to try family cases in the courtroom, but nothing has been finalised. To further promote education and provide opportunities for marketing professionals and international brands to break into the education sector and focus on women in the Kingdom, a Saudi Women’s Education Conference is scheduled to take place in Riyadh at the Imam Mohammed ibn Saud Islamic University this month. According to research by RNCOS, a firm specialising in industry intelligence, Saudi Arabia, with the largest population in the GCC, also has the biggest education industry in the region. With 60 per cent of its population under the age of 24, the country provides a massive opportunity to the education industry. With the current trend of establishing more universities and schools, student enrolment will rise in higher learning institutions. It is expected to register a CAGR growth of 13.7 per cent between 2010 and 2013. “We anticipate that this support will further increase in the next three years as the Kingdom strives to diversify its economy to knowledge-based sectors. This will further result in the fast development of the education sector, making the country the most attractive education market in the GCC. “In higher education, medical and technical education are poised for substantial development,” the company said. Q

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PROFILE

THE GMR INTERVIEW Laurence Cook, communications head at Robian, hopes his line of seafood products proves a real catch. Alex Malouf reports from Jeddah. IT’S NOT often one gets the chance to develop not just a brand, but an entire category from scratch. But Saudi Arabia’s 2,600km of coastline offered one entrepreneur such an opportunity. Despite its natural maritime advantages, Saudi Arabia, until fairly recently, did little to exploit its potential as a seafood centre and develop brands for local and export markets. That changed in 1982, however, when a Saudi ﬁrm run by the Al-Balla family started a small research project to explore the feasibility of developing saltwater prawn farms off the kingdom’s coast. That project developed into a company that is now 28 years old and going from strength to strength. “Our managing director, Ahmad R Al-Balla, started Robian as a small six-

46 Gulf Marketing Review October 2010

month research project in 1982 to see if it was feasible to have a sustainable saltwater prawn farm off a desert coast,” says the company’s recently appointed director of corporate communications, Laurence Cook. “Our knowledge and understanding increased, so today we have one of the world’s largest integrated prawn farms in the world – one built on a sound engineering and scientiﬁc base and longterm view.” As the ﬁrst Saudi company to produce prawns on an industrial scale, Robian, or National Prawn Company, as it is also known, has proved there’s a market for locally made non-traditional foods. Cook believes that, with the growth of business as well as changing consumer tastes in the region, it won’t be

long before Robian becomes known throughout the Gulf for its branded line of seafood products. “We focused, until a couple of years ago, on production, consistency of supply and, of course, quality and taste. We also wanted to get our systems, processes and accreditations – such as our recent British Retail Consortium Food Grade ‘A’ certiﬁcation – in place. We are now much more focused on the market and are developing a range of branded products,” he says. Cook, who joined Robian in 2009, is no stranger to the region. After spending more than 20 years in the UK, Asia, the UAE, as well as Saudi Arabia, with ﬁrms such as Ogilvy, Gavin Anderson & Company, Valin Pollen and Batey/Red Cell Group, he is relishing

Lateral thinking: Cook, who joined Robian in 2009, uses Australian agency along with a local agency

FANTASY CV Born: May 1960 Education: BA Hons in African and Asian history from the School of Oriental and African Studies, London University Lives: Jeddah, but Hong Kong is my home Hobbies: Tennis, photography and an eclectic taste in music Career high: Helping to establish the Asia Infrastructure Development Alliance. We created a body consisting of governments, multilateral agencies and corporations whose aim was to promote private sector investment in infrastructure. Bringing those parties together to cover development for two-thirds of the world’s population is the best thing I’ve done Career low: I don’t think of it like that. I never really had a career low. I just got on with the work Fantasy job: An actor, preferably in ﬁlms!

marketing. Corporate and B2B marketing is handled not in the kingdom, but much farther aﬁeld. “We work with a marketing ﬁrm in Australia called Lateral Aspect,” he says. “They do all the brand development and creative work. “They understand the food business, they are creative, they have a very simple way of working and they’re very cost effective. We have worked with them before and their creativ-

ity, allied with their understanding of the food business globally, means they deliver.” Lateral Aspect handles development of the Robian brand and productbranding internationally. Designs for the local market product – the Red Sea shrimp – will be handled by Memac Ogilvy, according to Cook. “In Saudi Arabia we have a direct relationship with the consumer through Red Sea Shrimp,” he says.

October 2010 Gulf Marketing Review 47

the challenge of working on the client side. “When I joined, Robian had little in the way of profiling,” he says. “You had a company with a turnover of more than $100 million and no structured communications programme. “I’ve enjoyed bringing all the elements of the marcomms mix together, including corporate branding, B2B and internal comms, public affairs, media relations and supporting international and domestic sales, and marketing activities. “After all the years of telling clients what to do when I was on the agency, I have now got to walk the walk. It’s also fun when one of my agencies tells me I’ve got it wrong, despite me thinking I may know better.” Due to the kingdom’s predictable climate, Robian maintains production of shrimps all year round. The company is looking to expand its sites to cover 200sq km, pushing output to more than 40,000 tonnes a year. Robian already exports to Asia, Europe and the USA. For Cook, the expansion will provide the company with a base to build its own branded products locally, regionally and globally. “We provide customers with what they need either through our brands or our buyers’ brands. We have just revitalised and launched one of our brands and now have three main ones for prawns. We will soon have Red Sea, Desert and Falcon Bay Shrimps. “We are considering expanding our sales operations with offices in the Middle East, Asia and Europe. These offices will look at new distribution opportunities in their markets,” Cook says. Robian started offering the Red Sea Shrimp in its home market this year. Cook works with several agencies: Jeddah-based Adalid handles PR, while Memac Ogilvy takes care of consumer

PROFILE

Healthy choice: Robian wants to encourage greater prawn consumption by pushing the message that they are not just for special occassion

Having started with prawns, Robian – which is Arabic for shrimp – has now branched out into cultivating fish and sea cucumbers. The move allows it to grow in Asia, where fish is widely consumed. “We are in 30 markets at the moment with a prawn of exceptional taste and texture; it’s very popular with chefs,” Cook says. “Our focus at an international level is to be a premium producer. We will begin to grow new markets with products such as our sushi-grade frozen prawn, which will obviously be targeted at Japan, as well as fast-growing sushi markets such as the USA. “Our fish, the greater amberjack, or kampachi, is also primarily aimed at sushi markets, while the sea cucumber will satisfy a niche in Asia,” he adds. “We anticipate significant growth in Saudi Arabia and the region for seafood products. So we will concentrate our efforts on developing these markets.” Cook admits his marketing budget needs to grow. He expects this to happen as Robian becomes more brand-

48 Gulf Marketing Review October 2010

and less product-led. “Our total market spend is SAR15 million ($4 million), but that will change as we focus more on the Saudi market and on pushing the message that shrimps are an everyday food and not just for special occasions.” Catering to such a diverse range of geographies and cultures places Robian in a unique position to observe consumer eating habits. While the food producer has already noticed eating patterns change in markets such as Europe and the US, possibly owing to the ﬁnancial crisis, its EXPANSION STRATEGY

Bold plan: Robian is looking to expand its sites to cover 200sq km, to push output to more than 40,000 tonnes a year.

aim locally is to transform Saudi Arabia’s dietary habits. “We are exposed to pretty much every trend out there in most markets. In Europe, Australia and the US the emphasis is on sustainable sources, as well as, of course, quality and taste. Recently, there has been a trend towards more at-home eating, which suggests an opportunity in value-added products and convenience,” Cook says. “In Saudi this is very much an emerging trend. Here our focus is on encouraging greater consumption by giving people fresh, high-quality prawns in conveniently sized packs at affordable prices. Prawn consumption is still relatively low, with many people eating them at restaurants and on special occasions. It would be good if we could do for prawns in Saudi Arabia what the salmon farming industry did for salmon in other markets,” he adds. For Cook, the expectation is that Saudi and Arab consumers would follow European and Americans in changing their eating habits to reﬂect a healthier lifestyle. Already he and his colleagues

have been working on marketing campaigns to educate Saudi consumers about the health benefits of eating seafood. However, Cook’s aim is to provide information, rather than instruct. “We are about to kick-off a campaign that aims to get across the health message as well as underline the idea that shrimps are a terrific convenience food. They’re easy to cook, affordable and tasty. “We also have to educate consumers on the issue of frozen foods, that what they are getting are premium shrimps that are frozen and packaged at source. They’re fresh out of the packet. “We are trying to change how people perceive seafood, to show them that shrimps aren’t messy, and aren’t hard to cook. You can even take the shrimps out of the packet, wash them and then eat them. Annually, only 500 grams of shrimp is eaten per person in Saudi. We can, and should, look at changing that,” he adds. Robian’s focus may be on healthy living, but also wants to grow food in a sustainable, long-term manner without drugs or antibiotics. It’s an approach that consumers and suppliers outside the region appreciate. “Sustainability across all fronts is critical to our brand and our ability to provide products to markets in the EU, the US and elsewhere, where sustainability is on consumers’ agenda,” Cook says. “We are the only seafood company in Saudi Arabia to have an EU export licence. So, notwithstanding our strict biosecurity measures, which necessitate a clean environment, good environmental practices are critical to our long-term success.” Cook says the company does not use any antibiotics. “Our outflow is measured regularly and is significantly within allowable levels, both on a global and Saudi regulatory level. And, of course, being a saltwater operation, we do not use precious freshwater resources. We are ISO 14001 accredited.” “We believe that if we want to make sure our business lasts for many,

Net sales: Red Sea Shrimps launched this year

It’s also fun when one of my agencies tells me that I’ve got it wrong, despite me thinking I may know better. many years, antibiotics have no role in healthy farms. “Our ponds are very different from most other prawn farms. Our scale – currently 12 farms with about 28 ponds in each, with each pond measuring 10 hectares – and location – on unproductive desert coast – provides us with some signiﬁcant advantages, especially in terms of biosecurity.” Robian is now expanding into new areas, into nutraceutical- and pharmaceutical-grade products. While these are in their early phases of development, Cook explains that these new products will require a change to the company’s positioning. “The corporate brand will change as we are no longer a purely aquaculture company. We are developing new lines

in marine agriculture (algae production) and chitin manufacturing. We also plan to have a trading operation. All this will give us ﬁve revenue streams based around marine resources,” Cook says. The man tasked with spreading the word about Robian’s strategies and development is looking forward to the challenges ahead. “We are now an international business employing more than 2,700 people from 27 countries speaking 19 languages,” he says. “We have an operation that will produce roughly 43,000 tonnes of white prawns and 5,000 tonnes of greater amberjack by 2013. We are also diversifying into other marine-based businesses. It is a remarkable Saudi success story.” Q

October 2010 Gulf Marketing Review 49

ÂŠ Getty Image

CLIENT SERVICING

STRIKING A BLOW FOR AGENCIES An agency chief doesnâ&#x20AC;&#x2122;t pull any punches in telling clients how agencies really feel about pitching. A MARKETING MANAGER dies and gets to the Pearly Gates. Upon arrival, heâ&#x20AC;&#x2122;s presented with a special offer to try both heaven and hell in order to choose which one he likes the most. His inspection of heaven goes ďŹ ne. Itâ&#x20AC;&#x2122;s a nice place, full of pleasant people. His visit to hell, on the other hand, is amazing. He opens the doors and, rather than being confronted with pitchforkwielding devils and cauldrons of ďŹ re, he stumbles into the equivalent of the best VIP lounge in the world. Great food, drinks and a non-stop party â&#x20AC;&#x201C; he has the best time. Upon his return to the Pearly Gates, he decides that hell is the better place for him. Returning to the gates, he rushes

50 Gulf Marketing Review October 2010

to open the door and rejoin the party. But this time he is confronted with the hell he ďŹ rst imagined â&#x20AC;&#x201C; ďŹ re, pitchforks, the lot. He then runs up to the devil and angrily demands to know whatâ&#x20AC;&#x2122;s going on. He was promised the party of his life, only to ďŹ nd the reality to be different and far less rosy. The devil responds with a wry smile: â&#x20AC;&#x153;Last week was the pitch. Now youâ&#x20AC;&#x2122;re the client.â&#x20AC;? In February this year, I read an article online about 25 Belgian agencies that had launched a â&#x20AC;&#x153;virtual strikeâ&#x20AC;? to protest against their clientsâ&#x20AC;&#x2122; unfair pitching practises. For one week, if you visited any of their homepages, you were welcomed

with a message that read: â&#x20AC;&#x153;As you can see, we have replaced our regular website with this letter. Itâ&#x20AC;&#x2122;s going to stay up one week to express our discontent.â&#x20AC;? And then, by clicking from one agency homepage to the next, one could read the full text of why they had grown discontented with the pitch-happy state of affairs. The agencies made two major claims: s 0ITCHES COST A LOT OF MONEY )F YOU RE competing in a 10-agency shootout, the chances of you winning are 10 per cent. But agencies continue to have no choice but to invest a small fortune into what would be equivalent to a boxing match, as they go round by round in order to win new business.

s )F AGENCIES ARE SPENDING ALL OF THEIR TIME WORKING ON PITCHES GUESS WHAT THEY RE NOT WORKING ON #LIENT BUSINESS %VERYONE KNOWS THAT WE USUALLY DIVERT OUR BEST RESOURCES n CREATIVE AND STRATEGIC n TO PITCHES INSTEAD OF CLIENT WORK SO IT IS CLIENTS WORK THAT ULTIMATELY SUFFERS ,UC $E ,EERSNYDER #%/ OF THE !## "ELGIUM S ASSOCIATION OF COMMUNICATION COMPANIES WHICH MASTERMINDED THE STRIKE SAID h)F YOU RE CALLED INTO A PITCH AND KNOW THERE ARE SIX OR SEVEN OTHER GUYS AND THAT YOU LL SPEND %52 ON THE PITCH YOU HAVE A BETTER CHANCE AT A CASINO v !FTER READING ABOUT THE "ELGIANS DISCONTENT ) CYNICALLY TWEETED h"ELGIAN AGENCIES PROTEST ABOUT THE PITCH PROCESS )F THEY KNEW WHAT WE PUT UP WITH IN THE 5!% THEY D SHUT UP v !ND ) M SAD TO SAY THAT HAS PROVED JUST HOW CORRECT THAT TWEET WAS /NE WEEK LATER ) RECEIVED AN 2&0 FOR THE REDESIGN OF A PORTAL )T COMPRISED THREE PAGES A COVER REQUESTING THREE SETS OF DESIGN CONCEPTS A LIST OF DELIVERABLES NEEDED AND A DISCLAIMER .O BRIEF NO BRAND GUIDELINES 5PON CALLING THE PROSPECTIVE CLIENT ) WAS TOLD h) M FED UP WITH ALL OF YOU AGENCIES ASKING FOR A BRIEF AND BRAND GUIDELINES n JUST USE YOUR IMAGINATION v )T TURNS OUT THAT AGENCIES HAD BEEN INVITED TO THIS PITCH AND WHILE SOME OF MY INDUSTRY PEERS TURNED DOWN THE INVITATION ALL IT TAKES IS FOR ONE OF US TO ACCEPT THESE TERMS TO MAKE THIS SORT OF hBRIEFv ACCEPTABLE .OT TO BE OUTDONE ANOTHER MARKETING DIRECTOR SENT OUT AN INTEGRATED COMMUNICATIONS PITCH BRIEF TO AGENCIES REGARDLESS OF OUR SPECIALITY n 02 ADVERTISING OR DIGITAL ) KNOW THIS BECAUSE SHE WAS NICE ENOUGH TO ## ALL OF US IN THE TENDER INVITATION 4HERE ARE SOME THINGS YOU JUST CAN T MAKE UPx !MONG THE WAVES OF SACKINGS AND UNPAID INVOICES THAT HAVE ACCOMPANIED THE GLOBAL RECESSION OUR INDUSTRY HAS SUF-

Shut up or put up: If Belgian agencies think they have it bad ... says Tuqan

“I’m fed up with all of you agencies asking for a brief and brand guidelines – just use your imagination.” FERED ANOTHER BODY BLOW THE CHEAPENING OF EVERYTHING WE DO 3UDDENLY WE NO LONGER lND OURSELVES IN DEMAND OR ABLE TO DIFFERENTIATE OURSELVES THROUGH ORIGINAL THINKING )NSTEAD WE ARE AT THE MERCY OF PROCUREMENT DEPARTMENTS AND ENTHUSIASTIC MARKETING DIRECTORS WHO KNOW THAT THEY NOW HAVE THE PICK OF THE LITTER !ND WHO CAN BLAME THEM 4HERE ARE STILL AS MANY AGENCIES AS EVER IN TOWN n INCLUDING THE NEW ONES THAT mOCKED TO THE REGION n BUT THERE ARE FEWER ADVERTISERS WITH REAL MONEY TO SPEND !ND SO WE lND OURSELVES A LONG WAY FROM THE SELLER S MARKET WE ENJOYED IN .OWADAYS IT SEEMS THAT EVERY PITCH INVITATION THAT LANDS ON OUR DESK REQUIRES AN ENDLESS ROUND OF FREE DESIGN CONCEPTS OR CAMPAIGNS WITH THE END

RESULT BEING THE BEST AGENCY IS TOLD THEY ARE TOO EXPENSIVE AND THAT UNLESS THEY REDUCE THEIR COSTS TO MATCH THE CHEAPER AGENCIES THEY CAN FORGET IT 1UITE OFTEN PITCHES ARE CANCELLED OR SHELVED INDElNITELY RENDERING THE HUNDREDS OF THOUSANDS OF DOLLARS SPENT BY MULTIPLE AGENCIES COMPLETELY WASTED 2OUND AFTER ROUND OF CAMPAIGN IDEAS FREE DESIGN CONCEPTS AND APPEALING TO THE LOWEST COMMON DENOMINATOR IS A ZERO SUM GAME IN WHICH ONLY THE AGENCY WILLING TO DO THE MOST FOR THE LEAST CAN WIN 7E ARE DEVALUING THE STRATEGIC THINKING OF OUR CRAFT n THE BEST APPROACH TO CREATING ARRESTING WORK THAT GETS RESULTS /NE LEADING ADVERTISING AGENCY IN THE 5!% WHICH ENJOYS ITS FAIR SHARE OF GLOBALLY ALIGNED WORK PARTICIPATED IN

October 2010 Gulf Marketing Review 51

CLIENT SERVICING

Right priorities: Agencies need to focus on client business, not working on pitches

It is a brave agency head that turns down a pitch for being unreasonable, incomplete or unsuitable 32 pitches last year for regional clients. And we’re all guilty of this. My agency refused to pitch for most client inquiries in 2008 in the heady days of Dubai’s real estate and tourism boom. Now we’re willing to do more and more to win less and less. After all every agency has overheads and salaries to pay, and sometimes in the desperation to win a new client or get our foot in the door we offer ourselves cheaply or for free in the hope that it will pay dividends later. I’m not saying that advertisers should not have the right to make the bestinformed decisions about who their marketing partners will be, and I do not dispute that some of the best ideas created came out of the energy, enthusiasm and sky-high ambition that only

52 Gulf Marketing Review October 2010

a new pitch can generate, but I question the direction in which we are headed. Agencies in the region come in all sorts of shapes and sizes, and it does not take much to understand what each of us is good at. A ﬁve minute chat with an existing client about us is far more insightful than any polished presentation we can put together. As the Belgian strike manifesto stated: “Judging an agency isn’t rocket science. Our work is on every street corner, and all over the internet.” I’m not asking for an end to the pitch process, just a reality check and acceptance that, by making the selection process more opaque, more competitive and less realistic in its expectations, we are ultimately denying everyone – agencies, clients and

the media – the chance to align with the best partners. This will only lead to less inspired work, less growth and less opportunity for our next generation of Arabic advertising talent. We are consultants, not used-car salesmen. But there is hope. In my interactions with colleagues across the industry, we know that we cannot go on like this. I do not know what the answer is, and in our fractured state it’s unlikely that we would rally round a common charter and stick to it. It is a brave agency head that turns down a pitch for being unreasonable, incomplete or unsuitable, but it is starting to happen. What was most striking about the global ad agency I mentioned earlier is not that they participated in 32 pitches in 2009, but the number they turned down...128. Q

Yousef Tuqan Tuqan CEO, Flip Media, Dubai

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HAVING A WORD Whatever the landscape of engagement with brands looks like in the future, it is certain that conversations will be a major part of the picture, says Richard Barron. THE WORLD turns and the world changes, and with this consumers change rapidly. They no longer have automatic trust in authority, so-called opinion-makers and leaders. Word-of-mouth recommendations from friends and colleagues carry far more weight and influence than messages broadcast by brands and the corporations behind them. This is an inherently fluid landscape that is difficult to navigate. We are now in a world where social networking generates more internet traffic than search engines, where it is perceived to be better to be talked about rather than trying to outshout the competition on a variety of platforms. Indeed, the din of millions of con-

54 Gulf Marketing Review October 2010

versations taking place simultaneously presents challenges for communicators of all backgrounds. We live in an era of participation. Consumers are no longer willing to be passive and simply “receive” marketing messages. This means you have to think more about your approach and the channels you communicate through. The artist Banksy recently “toured” the USA, producing works of art (or grafﬁti depending on your standpoint) across the country. His latest stop in New York prompted thousands to take to the streets with cameras, each person hoping to be the ﬁrst to discover and record a new “Banksy”. This perhaps illustrates the artist’s success – the art

itself is a catalyst to engagement and participation. Traditionally, marketing has strived to deliver a ﬁnished piece of work – a concept or proposition that is both compelling and as perfect as possible. Delivering the “ﬁnished” piece of work may be satisfying for marketing professionals, but its effectiveness is likely to be short lived. The concept may be of the moment but it will be static and, once consumed in the marketplace, will ultimately be discarded. The new challenge is to create a proposition that not only delights and intrigues but also entices consumers to participate. The proposition should be an offer to engage with the brand, to make a basic promise that also includes

an invitation to modify and tailor this offer to meet the personal needs of the individual. Consumer advocacy These propositions are, by nature, dynamic, and if managed effectively they can generate massive consumer advocacy for brands. This is the art of the conversation – where consumers spend just as much time talking with you as listening. Recently, Spike Lee directed a short film for a corporate organisation comprising footage shot solely on mobile phones by consumers. Microsoft has even gone so far as to file patents for software that will facilitate user-generated content, although the jury is out on the level of engagement this will deliver. Alec Baldwin urged his colleagues to “Always Be Closing” in the film Glengarry Glen Ross. However, Baldwin’s character assumes the stance of a predator with an endless supply of willing consumers walking through the door waiting to be “closed” by salespeople. This view of consumers presupposes that they can be manipulated or controlled almost at will by marketeers. The resources and budgets required to influence consumers, let alone attempt to control them, can be massive. Increasingly, brands are attempting to engage with consumers in more intimate and empathetic ways. One of the fundamental principles behind successful engagement is the concept of co-creation, where consumers become actively involved in creating products that meet their needs by articulating clearly what those needs are. News media have embraced the concept of co-creation in their use of user-generated content. Although this has been partly driven by advances in technology, use of eyewitness-captured footage by news networks marks a radical shift in editorial policy. Highly productive Conversations have proved to be highly productive in changing thoughts and

Passive resistance: Consumers are no longer content simply to receive marketing massages

We live in an era of participation. Consumers are no longer willing to be passive and simply “receive” marketing messages. actions, even society itself. Idle speculation in London coffee houses on the prospects of success for different businesses led to the development of the stock exchange and global equity markets. It also led to the birth of Lloyd’s of London and the modern concept of insurance. More recently, James D. Watson and Francis Crick discovered the structure of DNA not through experimentation but by sitting down and talking through what they thought the structure should look like. Their conversations led to a landmark in scientiﬁc knowledge during the 20th century. The journalist James Surowiecki, in his book The Wisdom of Crowds, anticipates that there will be a “shift away from older forms of communication… towards something that resembles

a real conversation”. While he does not specify the exact nature of these conversations, we can see them today in forms such as YouTube, Web 2.0, blogs and lifecasting. Perhaps one of the most large-scale examples of conversation comes within the open source software community. Here, the conversation is ongoing as developers add their own voices in the form of code integrated into the software itself. The scale of these conversations is huge when one considers the development of programs such as Linux and the huge information repositories of the WikiMedia Commons projects. Conversations lead to a rebalancing of marketing approaches. In the past, campaigns have focused on promoting the tangible assets of a brand that make

October 2010 Gulf Marketing Review 55

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Warning signs: A brand that fails to engage with consumers is already in decline and is likely to be overlooked in the market

Delivering the “finished” piece of work may be satisfying for marketing professionals, but its effectiveness is likely to be short-lived. the brand itself look good. Sometimes, this has led to exaggerating positive features in the hope that consumers will not notice less appealing aspects of the offer. Unfortunately, this does not help to build trust between brand and consumer, yet trust is critical to having open, frank and honest conversations. In order to gain greater engagement with brands, it is important that they focus on less tangible, internal benefits – the benefits and rewards the brand gives its purchasers. In essence, how does this brand make me look/feel good about myself? Implicit within this, although it may be uncomfortable for many, is the notion that brands should admit to vulnerability and imperfection. Placing trust in the consumer to see a brand’s faults as well as its assets is a highly effective way to engender trust.

56 Gulf Marketing Review October 2010

Yet all too often, brand marketing and communications shy away from this approach in fear of devaluing brand equity. In reality, a brand that fails to engage with consumers is already in decline and is likely to be overlooked in the market. Same language It may sound obvious to some, but for conversations to take place it is essential that all parties speak the same language. Tone of voice is almost certainly the most critical factor in successful communications. Understanding and using the terms, phrases and even slang of the culture can make or break a brand’s dialogue with potential consumers. Insight professionals are employing new ways to tap into the language of consumers. Traditional group discussions are being replaced by ethnographic studies where consumers are observed

interacting with brands and products in their everyday lives. Moving forward, it is essential that marketeers and insight professionals look towards as broad a range of data sources and dialogues as possible. This is likely to mean less tightly deﬁned responsibilities, as all people advocating a brand should be engaging in conversations across multiple touch-points. Whatever the changing landscape of engagement with brands looks like in the future, it is certain that conversations will be a major part of the picture. Q Global Aspects is an insights consultancy based in Dubai. Its leading consultants have worked for more than 25 years on projects for government and major multinational corporations. It specializes in brand development, communications, acquisitions advice and change management.

Richard Barron principal consultant Global Aspect

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LUXURY RETHINK Brands must find new ways to reach out to the more demanding, more discerning and more value-conscious, post-recession consumers. IF THE LUXURY market in the Middle East was more than a little lacklustre at the start of last year, the fourth quarter of 2009 and first half of 2010 definitely saw it showing signs of regaining some of its former sparkle. According to Merrill Lynch’s World Wealth Report 2010, global demand for luxury cars, yachts, jets, art, as well as jewellery, gems and watches was weak during the first half of 2009, with sentiment improving in the second half. High net-worth individuals also began seeking out “passion investments” – items perceived to have tangible long-term value. Gems, jewellery and watches saw the second largest allocation of passion investments overall at 23 per cent, after luxury collectibles (automobiles, yachts

58 Gulf Marketing Review October 2010

and jets) at 30 per cent. The Middle East accounted for the heaviest investment in gems, jewellery and watches worldwide at 35 per cent. More, more, more Other indicators also bode well for the regional luxury market, which is currently estimated to be worth around $8.53 billion in annual sales, representing 4.5 per cent of global sales, according to London-based broker Bernstein. Bernstein said Abu Dhabi, Dubai, Manama and Doha now have a higher luxury retail point-of-sale density than Seoul and Tokyo. At the Reuters Global Luxury Summit in June, major players such as Louis Vuitton, Valentino, Van Cleef & Arpels, Hermes and La Prairie said they

consider the Middle East their main focus after China. With the absence of VAT in markets such as Dubai, an appetite for European brands in cities such as Beirut, and a large volume of retail space coming on the market in places such as Abu Dhabi, Qatar and Saudi Arabia, the region looks increasingly attractive for luxury brands looking to grow their presence. “Our retail sales are up 18.5 per cent from last year at a group level. This growth is mainly coming from shop openings – about 25 in the first half of 2010,” said Fadi Jabbour, head of retail for Chalhoub Group, one of the biggest players in the Middle East luxury market, with a portfolio of more than 280 high-profile fashion, beauty and lifestyle brands including Baccarat, Christofle and Christian Dior.

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tax-free environment represents signiﬁcant value for the Chinese, both for the truly wealthy as well as the aspirational. “The Chinese economy is booming; China has just overtaken Japan as the second largest economy after the United States. For those luxury brands that are not yet available in China, or for Chinese who are travelling, the fact that there is no tax, no VAT [in Dubai] represents a signiﬁcant saving – it pays for their trip,” says McClelland.

Strong showing: The Chalhoub Group, which has the Christoﬂe brand in its portfolio, reports steady growth

Value doesn’t mean cheaper items, it means they need to feel like they get value... “The bulk of the activity is still concentrated in our three main countries: Saudi Arabia – mainly Riyadh – is up by 14 per cent, the UAE is up 26 per cent, and Kuwait is still performing as per last year,” he said. According to Lise Anenn, associate media director at SMV, who handles Richemont Group and Hermes accounts in MENA and the Indian Subcontinent, the Middle East has begun to see increased investment from global luxury brands on the communications front as well. “In terms of budgets, we have not really been affected,” Anenn told GMR earlier this year. Part of the reason is that when the recession hit, this region came into focus, because spending did not stop here. It slowed down, but did not stop like in other markets. All the emerging markets suddenly came into focus and brands’ headquarters were suddenly more involved with the Middle East. If before

60 Gulf Marketing Review October 2010

the region did not get a budget for some brands, it got one now.” The Middle East’s geographical position also means that the catchment area for luxury shoppers includes the subcontinent – which heavily taxes foreign luxury products and does not have a very mature market – central Asia, Russia and China. According to TB Mac McClelland Jr., president and CEO of The Luxury Marketing Council in the Middle East, shopping in a LOOKING FORWARD

Optimistic: Chalhoub Group’s Fadi Jabbour

Holding steady: SMV’s Lise Anenn

Value conscious But despite the return of tourist dollars to the region’s luxury market in the first half of 2010, the impact of last year’s steep decline in sales and the significant erosion of discretionary spending power – among aspirational shoppers in particular – continues to be felt. According to Jabbour, while the Middle East consumer is “still extremely appreciative of exclusive, rather ostentatious, luxury items”, the market has witnessed “a move whereby people research value, because most of them have less disposable income”. “Value doesn’t mean cheaper items, it means they need to feel they are getting value for what they are paying. People look for choice rather than price, as per our research, so we aim to optimise what we offer in substance – major brands, key boutique locations and exclusive collections.” But while value is not restricted to lower price tags, the past year has seen price cuts within the luxury sphere. “Globally you saw luxury brands discounting heavily for the first time in memory,” said McClelland. “When a brand suddenly has 70 per cent off, it’s going to be hard to command a premium price even when the economy recovers. I think a lot of them have done a disservice to themselves.” Speaking to GMR before the summer, Christian Fedorczuk, group director for strategy and development at the media firm OMD, which heads LVMH group’s account in the Middle East, discussed the

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Don’t Tinkerbell: Luxury products should not dilute core brand values with discounts

The impact of last year’s steep decline in sales continues to be felt. account in the Middle East, discussed the challenges posed by the recession from a communications perspective. “[Luxury] brands need to shift products when the overall market is down, expensive products, that is,” he said. “That creates an oxymoron, communication-wise: Hardsell without hard selling in order not to damage the brand. It’s a ﬁne balance – meeting short-term commercial goals and keeping a long-term vision, and protecting a desirable brand image.” Fedorczuk advised against messing with a brand’s premium positioning by resorting to tactics such as massive markdowns or utilisation of cheaper media channels. “Do not tinker with your brand image,” he said. “Not because of the recession anyway. Keep it steady. The downturn might last a few years, but you’re stuck with your brand for a lifetime. There is more harm than good to be done.” Online opportunities and expectations The unique challenges posed by this problem have, however, led to certain innovative

60 Gulf Marketing Review October 2010

solutions. According to Sonia Borg, business development director at Sukar.com, the presence of afﬂuent, elite consumers as well as a young, growing, brand-conscious middle class in the Middle East – paired with two years of recession that left luxury brands with the need to ‘destock’ discreetly and consumers who actively seek out good bargains – proved a winning combination for the online shopping club. “Shopping clubs present brands with the opportunity to destock in a controlled environment without damaging their brand ALL MAPPED OUT

Online gamble: Sukar.com’s Sonia Borg

Focused: The Luxury Marketing Council’s TB ‘Mac’ McClelland Jr

image through ﬂash sales. Invitations to participate in the sales are only sent to a circle of invited friends, and the site is secured so that the sales are not traceable on the internet,” Borg said. According to Borg, Sukar.com sources current as well as excess stock from earlier seasons, presenting itself as an additional distribution channel for brands carrying excess inventory. “In short, we can do this [offer signiﬁcant discounts] because we take the extra stock that costs money while it sits on the shelves or loses value with time, and we make it accessible to a far greater audience than is possible for a physical retailer to reach. And to that we throw in the added advantage of all-round discretion – only our private members are invited to the brand sales, and at no point do we divulge who our retail partners are,” Borg said. Sukar.com has 180,000 members across the GCC, Egypt, Lebanon and Jordan and, according to Borg, the site aims to reach half a million members by the end of the year. “The site’s biggest market by opportunity is Saudi Arabia, with about half of its shoppers based in the country. Egypt is the next to watch, with more than 17 million people online, a young population and a growing middle class,” she said. According to McClelland, luxury brands are going to be forced to embrace the online medium in a bigger way. “A lot of them resisted migrating to the internet for a long time. But consumers will dictate how they will be sold to. If you walk into a store and the salesperson does not know what they are talking about, isn’t polite, doesn’t give you what you want, you’ll turn around and walk out.” McClelland says many luxury consumers, don’t feel like visiting stores and prefer to shop online. But they don’t have many options. “What do you mean you don’t have a website? What do you mean I can’t buy it online? What do you mean you don’t have an online customer service available 24-7? Brands that are not prepared to do that will suffer,” he said. Q

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MALLS Mall owners are enticing shoppers to stay longer with more entertainment. Entertainment & leisure In-mall communications Mall of the Future Tomorrow’s shopper Global to local Dubai Shopping Festival Beirut retail spaces Saudi shopping Online search for malls Media coverage PARC analysis PARC data

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66 Gulf Marketing Review October 2010

FAMILY FIRST FECs are taking centre stage as demand for destination malls and experiential offerings continue to rise.

Splashing out: The Wahooo! Water Park, Manama City Centre, Bahrain, combines retailing with family entertainment

RETAIL PROJECTS in the GCC are expected to measure six million square metres of Gross Leasable Area (GLA*), according to the Alpen Capital GCC Retail Industry Report 2010. Highlighting the renewed conﬁdence in mall development, the study estimates GCC retail demand growth at a CAGR of 9.5 per cent from 2010 to 2011, with industry growth for this year expected at 8.3 per cent. The majority of the GLA addition is expected in the UAE and Saudi Arabia, followed by some major additions in Qatar by 2012. “There has [also] been a qualitative shift in retail consumer behaviour in the GCC. The key trends developing in the region are – rising acceptability of modern retail format, increased preference for international brands, growing prominence of online retailing and an enhancing appreciation for innovative ideas and offerings,” the study says.

Meanwhile, the total GLA in the UAE as of the end of 2009 stood at 3.12 million square metres, according to real estate services company CBRE Middle East. Of this ﬁgure, Dubai’s share is 60 per cent, Abu Dhabi’s is 26 per cent with the remaining 14 per cent being in the northern emirates. This ongoing change is coupled with expectations of increased tourism in the region. According to the World Travel and Tourism Council, the number of international visitors to the GCC is expected to rise to 78 million every year by 2014 – a growth rate of 5.3 per cent from 2009. This ﬁgure was reported at close to 60.5 million in 2009, which generated a tourism income of about $242 billion – $4,000 per head. Destination mall With the region forging ahead with its positioning as an international shopping

destination, renewed conﬁdence in mall development is not far behind. But the presence of global and emerging regional brands is no longer enough. Developers have long been moving towards the creation of ‘destination malls’. As retail outlets become globally homogenous, malls are looking for different ways to lure shoppers with leisure, entertainment and tourism offerings. This, in turn, has extended shopper/consumer dwell time, banking on the region’s culture of ‘shopping as a social activity’. “The weather and the relative lack of alternative leisure options in many cities, plus the lower participation rate of women in the work force and large family size, give shopping centres in the Middle East more prominence in the daily life of its customers,” says Omar Al-Salﬁti, CEO of Al Tajamouat Group, which is due to open the TAJ Mall in Jordan next year. “Consequently, as the largest ‘creators’

October 2010 Gulf Marketing Review 67

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

Mama Mia!: The Venetian-themed Villaggio Mall, Doha, is more than just a shopping centre, it’s a destination

of public spaces, mall developers are responding to the needs of the local population. This is reﬂected in increasing F&B choices, more diversiﬁed entertainment facilities for all ages and more exciting retail stores,” he says. Besides encouraging consumers to stay in the mall longer, it also broadens the mall’s target audience. It has inevitably put leisure and entertainment at the forefront of any mall development, enjoying increasing attention from developers, whereas before entertainment was more of an afterthought. What’s changed? With increased attention on non-retail aspects of the mall, owners and developers are putting more emphasis on higher-end F&Bs and destination FECs (family entertainment centres).Mall owners want shoppers to stay at the mall longer and spend more. According to the International Council of Shopping Centres (ICSC), shoppers who visit a mall for less than 30 minutes spend an average of $54.20, or 44 per cent less than the overall average mall spend of $98.40. Shoppers whose mall visits last 180 minutes or longer spend $205.20 per visit or 52 per cent more than the average.

68 Gulf Marketing Review October 2010

Regional mall developer Majid Al Futtaim (MAF) has even designated a separate division to manage the leisure and entertainment projects within all of its malls, called MAF Leisure. Heading this is CEO Arnaud Palu.“The shift is quite strategic: to create malls as destinations that provide exceptional experiences through their variety of entertainment venues,” he says. “Looking at any new mall within the region you can see that each has developed some form of leisure offering as their draw card to increase customer dwell time within the malls. Malls are most deﬁnitely no longer just a place to shop and it is crucial

DESTINATION SENSATION

Ready for launch: Al Tajamouat Group’s Omar Al-Salﬁti

Focus on fun: MAF Leisure’s Arnaud Palu

to create these kinds of entertainment offerings to make them a key location on the map, both for incoming tourists and local visitors.” The ex-Disney executive says, for now at least, that an average of 20 per cent of investment is allocated towards leisure activities per mall project depending on the size of the project. And this figure is set to increase. It hasn’t been a completely smooth transition, however. “There’s definitely a dichotomy,” says Palu, describing the increasing influence of FECs to consumer demand and their effect on leasable areas in malls. It’s a cautious transition for developers used to only maintaining relationships with retail tenants, and seeing straightforward ROI in these relationships.Now, most are having to understand the significance of FECs and how the right installation could benefit the retailers and, inevitably, the developers themselves. MAF Leisure has delivered a variety of new entertainment concepts from Ski Dubai at the Mall of the Emirates and indoor skydiving facility iFly at Mirdiff City Centre Mall, to the Wahoo!

Water Park inside the Manama City Centre, Bahrain. While actual footfall figures could not be released, Palu says Ski Dubai has seen its biggest July to date, with visitors coming from the UAE, Saudi Arabia, Qatar and Kuwait in particular. But MAF certainly isn’t the only one to follow the ‘destination’ trend and put FECs at the heart of their new projects. Kuwait’s Al Shaya Group has been operating the Venetian-themed Villaggio Mall in Qatar, while the Tamdeen Group operates the 360 Mall in Kuwait, that hosts arts exhibitions, among other seasonal activities. And then there’s Emaar Malls Group and its mammoth Dubai Mall, which is not only attached to the Burj Khalifa but also houses several FECs: Kidzania (a town built for children), amusement centre Sega Republic and the region’s largest in-door aquarium. In Jordan, conglomerate Al Tajamouat Group is set to launch TAJ Lifestyle in the second quarter of 2011. The mall is operated by one of its divisions, Al Tajamouat for Touristic Projects. At more than $183 million capital investment, the 150,000sq m upscale mall will boast cinemas, arcades, F&B areas, children zones and a supermarket. It is designed by US-based F&A design consultants – the same company that designed Dubai’s Mall of the Emirates. “The world’s largest candy store and the new books and IT stores are as much a leisure destination as a cinema. In the Middle East, we allocate more space for non-merchandise, as the mall fills in many needs which elsewhere are found on the city streets,” says Al Tajamouat Group’s Al-Salfiti. “Something unique to the Middle East is the evolution of incredible indoor family entertainment centres in almost all malls, and their growing representation over leasable area.” The F&B section at Al Tajamouat Group’s first mall, the TAJ Lifestyle, takes up about a quarter of the total leasable area, in addition to the cinema and other FECs.

Sweet treat: The candy shop at TAJ Lifestyle in Jordan is as much a leisure destination as store

…we should not be afraid of breaking the boundaries of in-mall entertainment, it can be as big, small, weird, wonderful. More to come More mall concepts seem to be under way. MAF has also announced plans to open 10 malls over the coming decade across the Middle East, including Syria, Egypt and Saudi Arabia. Palu declined to comment on MAF Leisure’s plans for entertainment and leisure installations in these projects. “The continued success of Ski Dubai since its launch has showed how we should not be afraid of breaking the boundaries of in-mall entertainment, it can be as big, small, weird, wonderful,” Palu says. It is more important than ever to offer something different and this can be seen in a series of new developments across the board that demonstrate a wide variety of innovative and exciting leisure options. Indian supermarket chain LuLu is set to open a shopping mall in Salalah by the end of this year, Times of Oman reported.

With a total area exceeding 400,000sq ft, spanning three levels, the mall will feature a hypermarket, department store and amusement area. LuLu also plans to invest $266 million in Saudi’s retail sector over the next 12 to 18 months, having opened the first LuLu department store in Riyadh earlier this year. In Algeria, a $89.8 million shopping mall project is in the planning stages. Backed by a JV of Swiss banking group Valartis and Swiss department store operator Jelmoli, it will be the country’s first shopping mall. The Abu Dhabi-based Emke Group is also looking to expand into the North African region with its first department store in Egypt. In India it is currently building the largest shopping mall in the city of Kochi. Meanwhile, regional conglomerate Al-Futtaim Group (not to be confused with MAF) has signed a $1.65 billion JV with Qatar Islamic Bank, Aqar and an

October 2010 Gulf Marketing Review 69

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

Something for eveyone:The TAJ Mall, Jordan. The upscale mall will boast cinemas, arcades, F&B options, kid zones, a supermarket – and, of course, shops

It’s a cautious transition for mall developers used to only maintaining relationships with retail tenants… undisclosed private partner company to build a “mega retail and leisure development” in Doha. The JV is called Bawabat Al-Shammal. Located on the highway linking the international airport with the proposed Bahrain Causeway, it will include a shopping centre, entertainment area and two hotels. Construction for the 433,000sq m project will begin in early 2011, with completion of the first retail phase expected in the first quarter of 2012 and final completion by 2015. Al Futtaim looks after the Festival City brands across the UAE and Egypt. Get interactive Within the enduring ‘destination mall’ trend is the sub-trend of creating interactivity of FECs. “People have become part of the action,” says Palu. A far cry from the beginnings of amusement centres such as Disney, where visitors were just spectators to what was happening around them.

70 Gulf Marketing Review October 2010

“Leisure operations have become more versatile and downsized, with a strong interactive positioning,” he says. Al Tajamouat Group’s Al Salﬁti agrees: “I believe whether it be cinemas, candy stores, entertainment centres, fashion or hypermarkets with food kiosks, retailers are placing greater efforts and focus on customer experience.” He adds that an emerging trend in the sector is a push towards “New Urbanism”. This is a mix of retail, residential CHECKING OUT JORDAN Room to grow: Similar to the rest of the Middle East, Jordan has a relatively young population and is growing at roughly three per cent every year. The kingdom currently has a GLA of less than .5sq ft per capita, compared to one in Kuwait, 20 in Dubai, 21 in the US and 10 in Europe, according to Al Tajamouat Group. Amman has approximately 200,000sq m of retail leasable area excluding outdoor strip areas. A total of 145,000sq m is expected to be delivered by the end of 2013.

and office space in one project, bringing maximum traffic to the shopping area. Al-Saltifi has the last word: “Whether it be reflected through higher levels of service, dramatic and changing store fronts, unique product displays, the industry as a whole is placing greater emphasis on defining all customer touch points to create a more entertaining atmosphere. “Ultimately the experience must be entertaining, not entertainment as one of the objectives. The same is reflected in the stores that are gaining popularity. Interactive displays, makes the shopping experience entertaining.” Q A number of mall developers were contacted for this story. Those mentioned responded to GMR’s request for information. *Gross Leaseable Area (GLA): the total area of floor space (usually cited in square feet) leased for retail shops, consumer services, and entertainment, including restaurants. Areas that are not let on long-term leases, such as assembly halls, exhibition space and the likes are not usually included in GLA figures, although they may produce some rental revenue. Source: Shopping Center Studies at Eastern Connecticut State University, based on criteria set by the International Council of Shopping Centres.

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

COLD CALLING How smartphones are helping to convert browsers into shoppers.

Kicking up a storm: Smartphone users are expected to exceed one billion worldwide by 2014

UNTIL RECENTLY the idea of getting realtime promotion notiﬁcations on mobile phones while walking through a mall was a pipe dream. Today, however, retailers and mall owners are using smartphones and social media to enhance the in-mall experience, opening opportunities for direct effect on ROI. In the Middle East, it is increasingly common for malls to maintain Twitter and Facebook pages – from The Dubai Mall to Riyadh’s Oasis Mall and Jordan’s Taj Mall – although the levels of interactivity may vary. “We strongly believe in communicating regularly with both our customers and retailers and keep them updated through our newsletters and e-mails. In addition to these more traditional methods, we are also looking at utilising social media as a tool to communicate with our audience,” says Fuad Al Najjar, vice-president of Deira City Centre. Regionally, upcoming malls are taking cues from their global counterparts. Al Tajamouat Group in Jordan

72 Gulf Marketing Review October 2010

is working with GS Fitch to design the Taj Mall’s advertising spaces, including wayfinding signages. “GS Fitch is coordinating with mall architects, F&A, based in California to ensure that the in-mall advertising/media platform is not intrusive to the design, but is well integrated with the look and feel of Taj and all other signage elements,” says Omar Al-Salfiti, CEO, Al Tajamouat Group. The retail real estate industry is also extending marketing strategies to include location-based applications such as Foursquare, Gowalla and FastMall. There’s still a lot of ground to cover, however. Regionally, smartphones are still just a fledgling demographic (albeit one IN TOUCH WITH CONSUMERS

Sound strategy: Deira City Centre’s Fuad Al Najjar

that has phenomenal growth rate) and infrastructure, and 3G costs are still very much an issue for consumers. But there are some innovations being introduced elsewhere that marketers in the region may want to consider, especially given that smartphone users are expected to exceed one billion worldwide by 2014, according to Parks Associates’ ‘Smartphone: King of Convergence’. Shopkick, one of the latest applications launched in the US, encourages subscribers to enter participating stores and malls via smartphone messages. Designed to increase on-site purchases, the app also gives shoppers additional points called ‘kickbucks’ for scanning products and trying on clothes. These points can be redeemed on and ofﬂine. Shopkick makes a proﬁt from the mall owner/retailer for every kickbuck earned and a percentage of the sales that can be directly attributed to the application, which is available for free download on iTunes. Another new app is mallMerlin, developed by CBL & Associates Properties. It features promotions, HD video and in-mall navigation and allows mall owners and retailers to customise offers by region and store level. Consumers can access mallMerlin’s content from any location, but the shopping experience is enhanced when the subscriber is inside a member mall. In the US, Target recently introduced Target Mobile, an in-store and online cellular shopping experience; and Target Electronics Trade-In allows guests to receive credit towards any Target purchase by turning in their new or used video games, mobile phones and iPods. By December 2010, Target Mobile and Target Electronics Trade-In will be available in approximately 850 stores and will become available nationwide in 2011. Q

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MALL OF THE FUTURE Skiing, surfing...or some shopping – consumers are wanting it all. LOOK BACK a decade ago. Would you have expected to see a ski slope inside a shopping centre? What about a water theme park in a mall? What lies ahead for shopping centres in the future? Global branding and design company FITCH attempted to paint that picture in a recent insights study entitled, ‘Mall of the Future’. Its findings highlighted the following retail trends: Seeking experiences As material needs become increasingly fulfilled, consumers will shift their attention to experiences that inject sensorial stimulation, excitement and adventure into their everyday lives.

Singing sensation: The Umm Kalthoum Exhibition created a sensorial experience in Kuwait’s 360 Mall last year

Souks you: Shoppers are nostalgic for traditional, authentic experiences

It’s snow time: Ski Dubai unites the Emirate’s snow sports fans

74 Gulf Marketing Review October 2010

Embracing the authentic In reaction to intensiﬁcation of mass commercialisation and increased scepticism of large institutions, people are turning to simplicity, tradition and honesty for reassurance and comfort. Community connections In an overwhelmingly complex, impersonal and transient world, consumers will look for points of reference and anchoring by forging new connections and using spaces that bring out a sense of community. In line The multi-channel approach to retailing and brand communication is starting to blur. Customers are demanding a seamless and integrated approach to the entire purchase process, from research to delivery. The mall of the future, according to the report, will remain as a destination centre that will not only drive visits through entertainment and leisure offerings, but give its shoppers a sense of belonging and familiarity, growing from locality and a clear consistent positioning. Q

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ALWAYS-ON CONSUMERS Selling to the Net Generation means moving from a consumptionled to participation-led retail strategy. THE RETAIL WORLD is undergoing a sweeping transformation. The changes are being driven by technology, the internet, social networking and demand for richer, more immersive experiences. The future will be owned by the ‘Net Generation’. Born between 1982 and 2000, these empowered young people will transform every institution of modern life. Currently, around 80 per cent of them have internet access, and they typically spend a third of their lives online. Whereas the TV generation are passive, the Net Generation are engaged, their internet is reactive, involving, collaborative and multifaceted. For them, participation is the new consumption. This is the ‘CGeneration’ – they like to create content, contribute and connect. They demand customisation.

76 Gulf Marketing Review October 2010

The mobile device is critical to this generation. For them it will no longer just be about phone calls and cameras. These devices will be their remote control, an extension of their body. As the sociologist Richard Ling says in his book New Tech, New Ties: “Mobile communications will reshape social cohesion.” A decade ago there were fewer than 500 million mobile subscribers; now there are about 4.6 billion. In 2000 an average user spoke for 174 minutes a month, according to GSMA. By 2009 that ﬁgure had risen to 261. One estimate suggests Americans alone sent one trillion text messages in 2008. And it is estimated that by 2020, the global mobile economy will be worth $20 trillion. Augmented Reality will be the new window to the world of brands and shopping.

According to the director of Nokia’s Emerging Business Unit, Tom Henriksson: “AR is creating a clickable world, where the world around us becomes the web and the mobile device our cursor.” This all-pervading technology links the information world to the real world while offering digital information overlaid on real time, real world imagery. As Daniel Sánchez-Crespo of the independent game development studio, Novarama, says: “By making the real world a playground for the virtual world, we can make the real world much more interesting.” If we engage customers with compelling AR, we can ﬁnd a new meaning for consumer experiences.” To assist brands and retailers, it will be beneﬁcial to understand that the Net

Generation have eight characteristics. Futurist Marian Salzman describes them in her latest book, This Next, as being: - They value freedom and choice in everything they do - They love to personalise and customise - They scrutinise everything - They demand openness and integrity - They expect entertainment and play in leisure, education and work - They constantly collaborate - They expect everything to happen quickly - They expect constant innovation As developmental molecular biologist John Medina says about the Net Generation in his book, Brain Rules: “They can click their way out of any situation.” This new generation will have the power to choose like never before. They represent a generational tsunami, and as true ‘Digital Nomads’ they have a new relationship with time, place and other people. The Net Generation do not view technology as a ‘thing’; for them it is a part of their existence, like the air they breathe. Technology is an ever-present part of their ‘always on’ culture. It controls how they interact with brands, shops and each other. It will no longer be about ‘technology’; it will be just how we do things. But if technology and the ability to be connected disappear further into the background, what will occupy the foreground? Well, we have already started to witness a steady growth in demand for intimate, textural experiences. Shopping is polarising into functional and recreational shopping. Within these, retail experiences segment into four categories: ‘Rational’ shopping – typically in supermarkets where the retailer facilitates decision-making by communicating product features – there is a focus on price and service or customer interaction. ‘Convenience’ shopping – based on an edited assortment, simple navigation and fast processing, with merchandise solutions based on needs.

Augmented reality: The distinction between business and leisure will become increasingly blurred leading to ‘Bleisure’

“Retailers will need to stop thinking about making shopping entertaining and concentrate on making entertainment shoppable.” ‘Emotionally engaging’ shopping – more about sensory immersion, with high interaction and engagement at all levels, often attracting a premium. It may communicate provenance or extol the product. Typical examples of this are Selfridges, Whole Foods and Keihl’s men’s store. ‘Relationship’ shopping – encourages sociability among customers with shared values and mindsets. The experience is about storytelling and active participation. The communication here has shifted from a retailer-driven monologue to a dialogue between retailer and customer, and between customers themselves, both on and ofﬂine. Typical examples of this are the Apple Store, Samsung’s ‘non-store’, the TTL (Time to Live) store from South Korea, and the Recip-ease and Rough Trade stores in London.

The traditional physical store remains as important as ever for providing an environment to meet the new demands of storytelling, sociability, connoisseurship and surprise. As Salzman says: “As we increasingly live wired, digital lives, we crave compensatory human contact and intimate experiences.” We will be witnessing a return to craft – a 21st century renaissance of the art- and design-centered approach to making things, where the individual will take centre stage. Even software is poised to embrace its craft heritage, with the proliferation of ever-increasing specialist apps, rather than the previous industrialised, massproduction and distribution model. Consumers will expect customised experiences that they can share and critique with their social networks both

October 2010 Gulf Marketing Review 77

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

Emotionally engaging: Selfridges London has chosen the path of sensory immersion through which to engage its consumers

Shopping will no longer be about stores, it will be about stories.

78 Gulf Marketing Review October 2010

to satisfy desire, not needs, and through shopping we help produce meanings for objects and, by extension, ourselves.” It is the changing nature of status that is driving the changes in shopping. There is a move from status symbols to status skills. Whereas earlier we sought status from owning and showing off things, we are now increasingly seeking status from the knowledge or connoisseurship behind the product or service. In short, the ‘brand story’. Shopping will no longer be about stores, it will be about stories. People no longer just want things – they seek meaning, and they will turn their attention to those brands that have a story. People want to master the skills to make the most of what they buy and be able to tell the story that comes with it. The future of shopping will be about skilled consumption and participation. As author Hamilton South says: “Retailers will need to stop thinking about making shopping entertaining and

on and ofﬂine. They will also abandon ubiquity. Nike brand president Charlie Denson says: “Another thing that is very, very important is the value the consumer is placing on customisation. It’s a very, very important part of the way they interact with people or with brands today.” The future of shopping will be about ‘fusion and blur’, the blurring of the boundaries between working, socialising, shopping, learning, discovering, eating and drinking. According to The Economist magazine, some 70 per cent of net-geners feel that working and having fun can and should be the same thing. According to The Future Laboratory consultancy, the era of ‘Bleisure’ – the blurring of business and leisure – will soon be upon us. The separating of work and life is a lost skill among net geners. So, what of shopping? Well, at its core shopping is about status. As author John Twitchell says: “We shop

concentrate on making entertainment shoppable.” Shops will be less about a ‘cookie cutter’ modular commonality and more about event-driven, curated experiences where the retailer becomes the ‘space curator’, staging transitory experiences that encourage discovery, surprise, spontaneity and serendipity. To quote Salzman again: “The future of shopping is about mindsets, not merchandise.” Therefore, brands will have to move from a monologue to a dialogue with customers – more POD (point of dialogue) than POS (point of sale). Shopping will also become increasingly social, making what was once a solitary trip to the shop a participatory social event, where groups of shoppers with common interests will be connected either physically or virtually. They will share and critique, and with vast amounts of information only a click away, customers will have the power to choose like never before. Retailers must create shopping experiences that tell the brand story, and embrace and facilitate the sharing of information with the ‘always-on tribes’ of customers.

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Future perfect: The next big thing in mobile technology will be geo-networking, which uses virtual data to broker real-world encounters

Augmented reality will be the new window to the world of brands and shopping. According to PSFK, a trends research and innovation company, “We must think less about real estate, staff, footfall and online stores, and start thinking about the entire world as a store, one in which we can easily make instant purchases regardless of time and place. “Beyond an evolving decentralised shopping experience, retailers must begin to contemplate the impact of digital media and the effects it is having on purchase decisions. As shoppers go through the process of discovering new products, testing them, and reﬂecting on their purchases, they are sharing these thoughts with their social networks and inﬂuencing perception among their peer group. “Retailers must embrace and facilitate this sharing of information, and shops need to evolve to create experiences that drive sales both in-store and within online social networks.” The above describes the new paradigm of shopping and consumer experiences.

80 Gulf Marketing Review October 2010

Below are examples of technology, brands and shops that have begun to embrace and deliver new customer expectations. Square (Square.com) is a new mobile app that turns the mobile device into a credit card reader, allowing the customer to buy anything, anywhere, at any time. A small plastic card reader connects to the earphone jack, transferring the credit card’s swipe data to the app. After the amount has been conﬁrmed, the customer simply signs the screen with their ﬁnger and the receipt is sent by email. In a world where everything is connected to the internet, we will be able to see information that is around us as we go about our everyday life. Digital information will be overlaid on our real world in real time. This can be seen at Frogdesign.com, where interactive digital information is projected on to shop windows for product features, and alongside food to give nutritional information.

Google has launched a product that provides shoppers with an inside view of a shop with merchandise layout as an interactive tool for customers. There is also a marked growth of social networking in shopping. At Diesel, a camera in the changing room connects to Facebook, allowing shoppers to take pictures as they try on outﬁts that they can post online. The next big thing in mobile technology will be ‘geo-networking’, which uses virtual data to broker real-world encounters. These apps will encourage the crucial serendipity in shopping, allowing people to use their mobiles to signal where they are to friends who may be nearby. Foursquare.com has built a business around this idea. Asking people to add their whereabouts to their tweets, ﬁrms can use this data to direct advertising and other services at people as they move from place to place. Q

Ibrahim Ibrahim managing director Portland, UK

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MIX AND MATCH? Malls in the Middle East must offer an outstanding shopping environment, so why don’t global retailers follow suit? IT’S NO secret that shopping is big business in the Middle East. This region offers some of the most exciting retail growth opportunities in the world. Indeed, eight MENA countries made it into AT Kearney’s recent Global Retail Development Index, with the UAE ranking seventh overall on the list of the most promising retail destinations globally. With a market attractiveness index of 79.1 and a market saturation of just 18.8 per cent, the opportunities for the savvy retailer are quite literally everywhere. The mall experience Malls in the Middle East offer an unparalleled experience for consumers and they have set new standards for urban entertainment across the globe. They are tourist destinations in their own right, offering a wealth of possibilities for all would-be visitors:

82 Gulf Marketing Review October 2010

entertainment, food and drinks, meeting facilities and, of course, shopping. But the in-store experience has much to live up to if it is to match the high standards of the malls. Here we take a closer look at what’s needed to deliver on the promise expected by the expectant UAE shopper. International brands in Dubai Taking a look at the international brands based in Dubai, for example, the thing we notice is that their retail format is more often than not directly based on global retail concepts. In short, stores in Dubai are exactly the same as the ones in Europe or Asia. And, in some cases, they are even from a previous era. What a missed opportunity... the mall offers all the right ingredients for a unique shopping experience, the retailers fall short.

What if... What if retailers in Dubai took the opportunity to raise the standard in global retailing, just like the malls did in the creation and delivery of their overall concept? What if an international retailer adapted its international concept to meet with local taste and ﬂavour? There is an amazing opportunity here that should be seized. So, how can a locally based international retailer maximise its mall opportunity, add value to the visitor experience and, crucially, add ﬁnancial value to its bottom line? Let’s look at some options that will turn a brand into a true retail experience: s -AKE IT PERSONAL Retail is the primary consumer touch point in today’s markets. It is the home of our brand. We must ensure retail rep-

s 4HE RETAIL EXPERIENCE SHOULD mIRT SEDUCE AND SURPRISE Consumers must experience brands in real life. Retailers have to provide personal interaction with the brand. Retail is not only about our product and services; it’s about building brands through a memorable shopping experience. s )NFORM ENTERTAIN AND SELL As a retailer you raise expectations. In order to become a leader you have to be both the authority and the innovator. Today’s consumers have a wealth of choice when it comes to information and purchase channels. Shops are part of the information and selecting process. Therefore, the retailer has to be relevant at every consumer touch point in order to be the consumer’s preferred brand. Through retail outlet diversiﬁcation (local store, ﬂagship stores, pop-up stores) a retailer can target and focus on different customers. Secondly, entertainment is key. Activation. We don’t see enough of that. Indulge consumers to the world of the brand. Examples can be found elsewhere; the Apple Store or Toys “R” Us that work with agendas of events, training, demonstrations and interactives, turning the store itself into a destination. s 3TAFF n SALES AND SERVICE OR PERSONAL BRAND AMBASSADORS The consumer service experience is vital.

resents the strategy, the brand, its values and mentality. Brands are built through a personal relationship with consumers. Retailers should treat consumers as guests and ensure that the market position, the vision and the ambitions of the brand are mirrored in the chosen retail concept. The concept should be based on the long-term effect it can have on brand perception. We believe the retail environment to be the ultimate place to create loyalty by means of personal contact with customers.

Getting personal: Understanding the customer is key to enhancing the retail experience

…the mall offers all the right ingredients for a unique shopping experience, the retailers fall short. It is often the difference between sale and no sale… often the products themselves are similar to the competition. Therefore personal service is key. Understanding, recognition and knowledge help to exceed consumer expectations, enhancing their retail experience. With thorough sales training and the creation and implementation of an incentives and awards programme, savvy retailers turn sales people into brand ambassadors and enhance the consumer experience and, ultimately, bottom line. s -AKE A GREAT lRST IMPRESSION WITH EVERY VISIT Retailers must engage with consumers and keep them interested and motivated. By constantly updating their stores and their retail communication (windows, banners, brochures) they can demonstrate how passionate they are about what they do and how much they care.

Social media offer the perfect platform for this interaction: Facebook pages help to get the latest news and schedule meetings with friends, thus creating a customer community. s 'LOBAL VERSUS LOCAL TOUCH THE LOCAL COMMUNITY A big challenge for global shopping experiences is to reinvent themselves with a local touch. In an environment where shoppers are well aware of what the global brands show in Paris, London, New York or Tokyo, Dubai should create an outstanding experience. Customers will notice and appreciate. Q

Dennis Rond, DAY creative business partners, Dubai

October 2010 Gulf Marketing Review 83

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FESTIVAL FEVER STILL HIGH? Fourteen years on, how much impact does the Dubai Shopping Festival have on the UAE’s retail landscape? Precious de Leon reports.

TOTAL VISITORS 2.92

Millions

2.2 1.6

2.4

2.5

2.55

3.1

3.3

3.5 3.2

3.35

2.68

1.6

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006-07 2008 2009 43 days 31 days 31 days 28 days 31 days 31 days 31 days 32 days 32 days 32 days 45 days 32 days 32 days

TOTAL SPEND 2.77

2.72

Billions ($)

2.67

1.03 .585

1.12

1.17

1.22

1.25

1.39

1.57

1.81

.759

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006-07 2008 2009 43 days 31 days 31 days 28 days 31 days 31 days 31 days 32 days 32 days 32 days 45 days 32 days 32 days

THE DUBAI Events and Promotions Establishment (DEPE) recorded 3.35 million visitors (tourists and residents) during the Dubai Shopping Festival (DSF) 2009, which saw $2.67 billion in sales. Since its launch in 1996, DSF has become a symbol of Dubai’s strong shopping

84 Gulf Marketing Review October 2010

culture, but how much impact does it really have on the city’s retail sector? Over the past 14 years, DSF has helped the emirate earn a steady stream of revenue. According to DEPE ﬁgures, the ﬁrst year saw 1.6 million visitors and a respectable $585 million in sales.

Since then, visitor numbers and spend have increased year-on-year, reaching its highest during DSF 2006-07, which ran from December to February. The festival saw 3.5 million visitors and sales of $2.77 billion. This was the only time – apart from the inaugural edition – that the festival was held over 45 days rather than a month. DSF recorded its first decline in 2008, with visitor numbers dropping to 3.2 million and sales of $2.72 billion. While 2010 figures are yet to be released, DEPE is already trying to make sure DSF stays relevant to its ever-changing demographic. The company is working closely with communications agency BUZ (Business Unlimited Zone) to manage the DSF website, Mydsf.ae, as well as the Facebook fan pages and Twitter accounts of DSF and Dubai Summer Surprises. The company also handles communications for its Eid in Dubai festivities. “Considering the UAE alone has close to 1.7 million people on Facebook and a social media penetration of 38 per cent, we can’t afford not to have a social media strategy for the shopping festivals,” says Baiju Kurieash, managing director and chief executive of BUZ. “It also allows us to gauge feedback and suggestions and to engage visitors.” The company is planning to create a YouTube account to upload official and fan videos. DEPE’s sites and social media accounts collectively have more than 2,000 fans. Kurieash notes that malls are starting to get on board with similar social media communications. “Malls in the region are stepping up their social media strategies, realising that they can harness this technology to get closer to shoppers,” he says. Q

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RAGS BACK TO RICHES Greater social stability and new investments mean Beirut is giving Dubai tough competition in the glamour stakes.

Carry forward: Galup president Michelle Chammas Garzouzi, Prime Minister Saad Hariri and Hermes CEO Patrick Thomas

IT GOES without saying that Paris is Beirut’s second name. The two cities share a love for intricate style and untamed glamour that have become their hallmarks. But it wasn’t until the start of this year that Beirut truly strapped on its Manolos and tottered out from beneath the French capital’s shadow, thanks to a combination of political stability and the scale of investments that came with it. The chairman of the Investment Development Authority of Lebanon, Nabil Itani, announced that the value of projects beneﬁting from IDAL’s One Stop Shop services, which are special packages to facilitate investments in Lebanon, reached $1.1 billion by the end of 2009. He said tourism brought in the biggest share of investments, whether in terms of number of projects or volume of investment, with 13 projects amounting to $940 million.

86 Gulf Marketing Review October 2010

Most of these investments were targeting the luxury segment, with ﬁve-star hotels, such as the Four Seasons and Le Gray, and super premium brands, such as Burberry, Hermes and Dior, growing like mushrooms across the city. Guillaume Boudisseau, a consultant at Ramco Real Estate, said: “Luxury is spreading like an oil stain through downtown Beirut, which is now the place to invest.” Driving this growth was an economy that wasn’t affected by the global economic crisis, contrary to the case in major Gulf metropolises, especially Dubai. “Whereas Dubai was hit by the economic crisis, Beirut was protected by it,” says Nathalie Comaty, communications and market research manager at ABC, one of the main shopping malls in Beirut. Attesting to this is Tony Salameh, one of the hottest names in regional luxury and owner of Aishti, a premium retailer based in Beirut. He says the

Lebanese capital now has the chance to overtake Dubai. “This is mainly because Dubai’s clientele, mainly wealthy Russians who accounted for 60-65 per cent of its turnover, have disappeared after the crisis,” he says. Leading this development was the recent opening of Beirut Souks, a shopping haven where the world’s leading luxury brands, including Louis Vuitton, Chloe and Jimmy Choo, set up shop. Nasser Chammaa, chairman and GM of Solidere, the company tasked with the redevelopment of Downtown Beirut and overseeing the souks, believes that Beirut Souks will constitute the heart of economic and touristic activity, “contributing to putting Beirut on the world map as a major regional centre for shopping, work and entertainment”. Michelle Chammas Garzouzi, president of Galup, the distributor of Hermes in Beirut, says the city centre, particularly the souks area, has been beautifully rebuilt to the highest international standards to accommodate luxury brands, including her new Hermes outlet. And if there is one thing reflecting this trend, it’s academia. The country’s top business school, the ESA, has decided to launch a training programme in luxury management, the first of its kind in the country. With competition between the cities fierce, Beirut’s edge over Dubai is that it can always put on its Parisian outfit – glamorous, revealing and authentic – something Dubai’s malls cannot. With stability a newfound Lebanese asset, and as Solidere prepares to start the development of the Beirut Waterfront, we are yet to see the full scale of growth. Q

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EGYPT

IRAN

Hijab-free zones spring up in Cairo

Wealth, family ties offer no protection

Running on Empty Gulf nations scramble to build a lucrative future from todayâ&#x20AC;&#x2122;s oil wealth

West Bank Battle

F M IC W NO PREVIE

This time the ďŹ ght is over mobile networks

Lots of Hot Air

Al Gore messes with industrial giants

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ECSOPECIAL

A MediaquestCorp Publication Registered in Dubai Media City

Canada ........................C$ 7.50 France ..........................â&#x201A;Ź 4.57 Germany ....................... â&#x201A;Ź 6.14

Egypt ..............................EÂŁ 10 Italy.............................. â&#x201A;Ź 5.17 Jordan ............................. JD 4

Kuwait ...........................KD 1.2 Lebanon .................... LÂŁ 5,000 Morocco.........................DH 22

Oman............................ OR 1.5 Qatar .............................QR 15 Saudi Arabia ...................SR 15

Switzerland ....................SFR 8 Syria............................ SÂŁ 100 Tunisia .......................... TD 2.5

UAE .............................AED 15 UK .....................................ÂŁ 2 USA ....................................$ 5

A MediaquestCorp publication

75(1'6 $' *05 'HSWK LQGG

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

BLITZ TO GLITZ Greater social stability and new investments mean Beirut is giving Dubai tough competition in the glamour stakes.

Carry forward: Galup president Michelle Chammas Garzouzi, Prime Minister Saad Hariri and Hermes CEO Patrick Thomas

86 Gulf Marketing Review October 2010

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

ANOTHER BRICK IN THE MALL Due to high demand for shopping centres in Saudi Arabia, construction will never stop–even in a recession. Sarah Abdullah reports from Jeddah. WHILE SAUDI Arabia has generally remained unaffected by the global recession, some mall developers in the kingdom have felt the pinch due to the international brands they represent. But that hasn’t stopped them from building. “The development of malls in Saudi Arabia is and has been mushrooming dramatically, despite availability, and this has happened because of investment in other areas, Mohammed Al Madani, executive manager of Al Maddahia Group, tells GMR. “Most of the investors and businessmen are opting for commercial centres and investment in real estate projects.” The current recession has, however, had a negative impact on some mall owners. “Of course, the recession has affected international brands and companies in Saudi Arabia, no one can deny this.

88 Gulf Marketing Review October 2010

This has had a negative impact on mall owners and there has been a sharp drop in revenues across the retail market,” Al Madani says. Those that heavily invested in international names were the most affected, with companies boasting a balanced investment plan diversiﬁed into other markets more able to make up for lost proﬁts and survive the recession. As for his company, Al Madani has recently transferred all of its malls and BUILDING A FUTURE

Moving forward: Al Maddahia Group’s Mohammed Al Madani

assets to a newly formed joint-stock company called Bunyan United Company, which, in turn, formed a new company called Awtad International Company, responsible for operations, maintenance, leasing, and marketing for all upcoming projects. “Our latest project, which is currently leasing, is ‘Business Park’, a complex comprising 58 ofﬁce villas located in north Jeddah. We also have three new projects on the drawing board worth $106 million, [which are] expected to be completed in the next two years,” he adds. It is due to this high demand for housing and shopping malls, Al Madini says, that developers keep building, even in a recession. Research ﬁrm Proleads Global agrees, stating that the kingdom’s high priority

on job creation and infrastructure growth in sectors such as utilities, water, health care and transportation, factored in with oil prices currently more than $70 per barrel, has created an economy that has weathered the storm. “With a huge and growing population, Saudi Arabia has sufﬁcient domestic demand to ensure growth in all sectors, as several young Saudis enter the job force every year,” Emil Rademeyer, director of Proleads Global, says. In an interview with Jiwar Real Estate Management & Marketing, the company’s CEO, Dr Saleh bin Abdullah Al Habib, echoes the positive rating for the future of mall development in Saudi Arabia. “The outlook for the kingdom’s metropolitan, mall-based retail market is excellent given the strong growth in demand and increasing occupancy rates,” Al Habib says. “The government’s strategic focus on expanding the non-oil economy is likely to lead to the development of additional commercial industries, of which mall retailing will be a major beneﬁciary,” he says.

Saudi Arabia has sufficient domestic demand to ensure growth in all sectors… According to feasibility research carried out by Jiwar, the supply of mallbased retail GLA is expected to expand in the kingdom at a CAGR of 11.3 per cent, reaching 8.3 million square metres by 2012. The ﬁrm adds that personal disposable income is also expected to increase by a CAGR of 6.5 per cent. These statistics, coupled with the lack of leisure activities for a majority of the country’s residents, and the availability of cash, is expected to be the basis to fund frequent shopping trips to the nearest mall. One can’t truly speak about the effects of the recession on international brands without mentioning Fawaz Abdulaziz Al Hokair Group, franchisers of clothing, electronics, and food and beverage brands, accounting for 40 per cent of the kingdom’s retail market share. Since 1997, the group has been responsible for bringing a multitude of western brands to young Saudis. However, with so

much investment in international brands, Fawaz Al Hokair Group wasn’t completely immune from the global recession. It has nearly been a year since Al Azizia Panda, 80 per cent owned by Savola, purchased all 11 of Al Hokair’s Geant supermarkets in the kingdom. Al Hokair was having problems maintaining proﬁtloss ratios due to the global recession, sources at the time reported. The stores were sold for $117.3 million in cash with a seven per cent stake in Al Azizia Panda. Despite this, Fawaz Al Hokair recently announced plans for three new malls in Saudi Arabia: Al Eshsa Mall in Hufoof, Palestine Mall in Jeddah and Azizia in Makkah. The company also plans to build its ﬁrst mall overseas – the Mall of Arabia in Cairo, Egypt. Recession, or not, it seems most mall developers can still promote international brands and consumers can still assume the western lifestyle they desire. Q

October 2010 Gulf Marketing Review 89

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

BUY-LINGUAL Brands are still undervaluing the importance of Arabic in their online marketing strategies. THE RETAIL SECTOR has always acted as a key indicator of the economic climate, and it’s been nothing but doom and gloom for the past 18 months. It was quite refreshing, then, to see some positive data for a change. This month’s sector analysis leads the Sekari SEO team to investigate the latest trends in search volume for the ﬁrst half of 2010. In terms of searches, we picked electronics, jewellery and clothes.

90 Gulf Marketing Review October 2010

After the stagnation and dip in 2008 and 2009, H1 2010 has seen a signiﬁcant increase in the search volume for these categories. This doesn’t necessarily mean the economy is in the clear, but one could deduce that an increase in search behaviour can lead to an increase in purchasing intent. Our top 10 keywords were researched in the UAE and Saudi Arabia, with an analysis of the Arabic and English search trafﬁc in Google Saudi Arabia. And, as we expected, the number of

search queries in Arabic in Google. com.sa outnumbered English by almost 10 to 1. Arabic is becoming an ever-increasing factor in search behaviour in the region. Companies need to consider if they want their brands to be visible to potential consumers. With only one per cent of web content in Arabic, there is a lot of opportunity for brands to make their presence felt. Search engines will only identify your website for Arabic search queries if you

TOP10 10KEYWORDS SEARCH RESULTS TOP – UAE GOOGLE.AE # 1 2 3 4 5 6 7 8 9 10

Keyword Mall Dubai Shopping malls The Dubai Mall Mall of Emirates Abu Dhabi Mall Malls Retail shopping malls Marina Mall Abu Dhabi Shopping mall Outlet Mall shopping

TOP10 10KEYWORDS SEARCH RESULTS GOOGLE.AE TOP – KSA (ENGLISH)

Searches 110,000 49,500 49,500 22,200 9,900 5,400 4,400 3,600 2,900 2,900

# 1 2 3 4 5 6 7 8 9 10

Search Engine Results Pages (SERPS) Research conducted on Google.ae. Top 10 keywords with the most amount of searches last month based on local results from Google.ae. All searches are estimated.

Keyword Mall Malls Retail shopping malls Dubai shopping malls The Dubai Mall Shopping Mall Mall of the Emirates West Mall Factory outlet mall West Edmonton store

Search Engine Results Pages (SERPS) Research conducted on Google.com. sa. All searches are estimated.

TOP10 10SEARCH SEARCHRESULTS RESULTS–GOOGLE.AE TOP UAE # 1 2 3 4 5 6 7 8 9 10

Coverage (%) 100 100 80 70 70 60 60 60 60 60

Average rank 3.30 16.10 23.00 12.29 32.71 3.67 20.17 24.50 28.83 31.00

Searches 18,100 1,900 1,600 1,600 1,600 880 590 320 260 260

TOP10 10KEYWORDS SEARCH RESULTS GOOGLE.AE TOP – KSA (ARABIC) # 1 2 3 4 5 6 7 8 9 10

Keyword Mall The Mall Alfarasha Mall Jumeirah Mall Location JM Mall forum Othaim Mall Riyadh Hyatt Mall Eden Mall Riyadh Hyatt Mall Riyadh

Searches 110,000 110,000 27,100 6,600 6,600 5,400 4,400 3,600 2,900 2,900

Search Engine Results Pages (SERPS) Research conducted on Google.ae. Top 10 keywords with the most amount of searches last month based on local results from Google.AE. All searches are estimated.

TOP10 10SEARCH SEARCHRESULTS RESULTS–GOOGLE.AE TOP SAUDI ARABIA Domain En.wikipedia.org Dubaifaqs.com Ameinfo.com Dubaicityguide.com Arabianbusiness.com Thedubaimall.com Zawya.com Virtualtourist.com Gulfnews.com Destination360.com

Performance data based on Google.ae. Results show the top 10 performing websites that on average have the highest rank and the most coverage in natural search results in Google.ae.

# 1 2 3 4 5 6 7 8 9 10

Coverage (%) 69.23 69.23 61.54 53.85 53.85 46.15 46.15 46.15 38.46 38.46

Average rank 16.67 24.00 17.88 15.14 16.14 9.33 15.67 33.17 16.20 23.60

Domain En.wikipedia.org Bdr130.net Alriyadh.com Youtube.com Aleqt.com Alfarasha.maktoob.com forumsedty.com aswaqcity.com Forumbanatmall.net Forumhawaaworld.com

Performance data based on Google.ae. Results show the top 10 performing websites that on average have the highest rank and the most coverage in natural search results in Google.ae.

TOP 10 SEARCH GOOGLE.AE AVERAGE SEARCHRESULTS VOLUMES GOOGLE.AE TIme Period First half 2007 First half 2008 First half 2009 First half 2010

Electronics 1.226 1.197 1.29 1.423

Jewellery 0.675 0.561 0.561 0.678

Clothes 0.798 0.812 0.862 1.194

Performance data based on Google.ae. Results show the top-10 performing websites that on average have the highest rank and the most coverage in natural search results in Google.ae.

have Arabic content. And how many of you brand managers can, hand on heart, say you give Arabic top priority in your online marketing? And if you do have Arabic content, how many of you have employed Organic SEO in Arabic to increase the ranking of your Arabic content in search engines? In Google.ae the top performing key phrases included searches for Dubai Mall, Mall of the Emirates and Marina Mall, suggesting high brand recognition. None of the malls, on average, were in the top 10 across all the key phrases. But that doesn’t mean that if you type in a mall’s name it will not rank in the ﬁrst page of Google. This data shows average ranking across all 10 keywords. These malls don’t rank across all of them, suggesting they do not have an expanded reach

An SEO strategy targeting Saudi Arabian audiences would require a strong emphasis on Social Media SEO… in search. Due to this they miss out on all the potential trafﬁc from people searching for generic information about malls and places to shop. The data for Saudi searches in English key phrases conﬁrms the 10:1 ratio between queries in Arabic versus English. The high-ranking sites for top 10 search terms in Arabic are mostly forums and blogs, substantiating how important social media communication is to internet users in the country. A major factor in the Saudi market is that there is very little Arabic con-

tent. Internet users in a predominantly young market thrive in these social communities, however. An SEO strategy targeting Saudi Arabian audiences would require a strong emphasis on Social Media SEO in order to raise the proﬁle of a brand in Google. com.sa. Q

Lee Mancini head of Sekari Dubai

October 2010 Gulf Marketing Review 91

SECTOR ANALYSIS

SALE-ING AHEAD

Renewed consumer conﬁdence has prompted more upbeat media coverage for Dubai’s retail sector.

RETAIL SALES in Dubai are projected to rebound this year followed by a signiﬁcant upturn in 2011, according to the Dubai Chamber of Commerce and Industry. Increasingly upbeat market sentiment in the months ahead will lead to an increase in private consumption levels which, in turn, will see retail sales value grow by four per cent in 2010 and 8.2 per cent in 2011. One of the factors driving the renewed buoyancy is new shopping malls. Despite the slowdown in 2009, the retail sector continued to expand in the UAE with the opening of the Dubai Mall, Dubai’s Arabian Centre and Dubai Marina Mall. By 2012, at least six malls are scheduled to open in Abu Dhabi alone. Last year was “a challenging year for UAE retailers” with weak aggregate demand, tight credit and increased household savings hampering sales revenues. In the ﬁrst half of 2009, the value of personal loans declined by 8.3 per cent, highlight-

92 Gulf Marketing Review October 2010

ing the shrinking pool of credit available to consumers for purchases of durable goods, such as autos and electronics, UAE Central Bank data suggests. In addition to expected increases in household consumption, growing urbanisation and high levels of wealth – plus overall improvement in consumer conﬁdence – will help spur the retail sector, the chamber added. The report added that higher oil receipts would bolster growth in the UAE, and the strengthening of the US dollar would pave the way for a decline in the price of non-dollar-denominated imported goods. The dirham’s peg to US dollar is expected to lead to exceptionally low interest rates, adding to an upward pressure on the prices of assets and goods, said the chamber. The annual Dubai Summer Surprises (DSS) event continues to have a positive effect, with retailers saying their sales during the 2010 DSS were up on 2009.

According to some observers, while UAE nationals actively contributed to retail sales, the purchasing power of the UAE’s expatriate residents was the fundamental success. Average household consumption in the UAE stood at $14,400 a year; this is expected to rise in the coming years. Dubai’s marketing drive as a global leisure and shopping destination has had a major impact on the country’s retail outlook. Tourism is a central factor stimulating retail growth, with Dubai expecting more than 50 million travellers in 2010, according to the Department of Tourism and Commerce Marketing. Media coverage Some 400 press clippings in the UAE and Pan Arab markets were monitored in August 2010, encompassing Dubai’s BurJuman, Deira City Center, Dubai Mall, Mall of the Emirates (MoE), Waﬁ and Ibn Battuta Mall. Dubai Mall achieved the highest volume of coverage with 176 clippings, 12.9 million opportunities to see (OTS), and a newspaper coverage size (NCS) of 11k, measured in column centimetres relative to the other malls. MoE came next with 139 clippings, 7.5m OTS and 8k NCS. It achieved the same magazine coverage size as Dubai Mall with 32 pages. Deira City Center was third followed by Ibn Battuta and BurJuman, while Waﬁ ranked last in terms of volume of coverage. Ibn Battuta, however, ranked third in the magazine OTS as well as NCS. Penetration All malls had much higher English coverage than Arabic, while only Dubai Mall and MoE featured Pan Arab coverage. The rest featured only UAE coverage.

PENETRATIONS - AUGUST 2010 Language English Arabic Markets UAE Pan Arab Genre News and Politics Travel and Tourism Homes and Properties Business Lifestyle Entertainment and Listing Celebrity and Society Catering and Hospitality In-ﬂight Parenting and Childcare Bridal Magazines Fashion and Shopping Clipping Types News Press Releases Listings Feature Reports Reviews Promotions Photo Captions Interviews Q&A Financial Reports Media Types Newspapers Magazines

BurJuman 28 8

Deira City Center 31 17

Dubai Mall 142 34

Ibn Battuta Mall 32 5

MoE 126 13

Waﬁ 21 2

36 0

48 0

174 2

37 0

136 3

23 0

19 3 1 0 4 6 3 0 0 0 0 0

26 3 0 2 5 11 1 0 0 0 0 0

110 7 2 4 18 23 6 0 1 3 1 1

17 4 1 1 6 6 1 0 0 1 0 0

75 8 6 5 12 26 4 2 1 0 0 0

13 3 0 1 3 1 2 0 0 0 0 0

15 18 0 0 1 1 0 0 0 1

26 20 1 0 0 1 0 0 0 0

91 56 10 10 4 4 0 0 1 0

8 9 11 0 3 2 1 1 0 0

61 50 11 5 8 4 0 0 0 0

11 10 0 1 1 0 0 0 0 0

19 17

27 21

113 63

18 19

79 60

14 9

Source: Mediastow 15 Oct–15 Nov 2009

‘News and politics’ was by far the most popular publication genre to feature all the malls in August, followed by ‘entertainment and listing’, and ‘lifestyle and general interest’ publications. It must be noted, however, that Dubai Mall was the most diversified. It was the only one to feature in bridal and fashion and shopping publications, and one of two to be included in in-flight and parenting and childcare publications. News and press releases were the most common clipping types for all six malls, followed by ‘listings’, ‘reviews’ and ‘promotions’. MoE was the most diversified in terms of clipping types, being the only mall to be featured in ‘photo captions’ and ‘interviews’. Newspapers was a more popular medium

for most of the malls, while magazines fell shortly behind, with the exception of Ibn Battuta with 19 magazine clippings to 18 newspaper clippings. Messages The messages sent by the malls in the UAE and Pan Arab markets varied, and were the most diversified for Dubai Mall, MoE and Ibn Battuta, ranging from mall reviews to using the mall as an aid to locate directions. Conclusion As the UAE recovers from the downturn, a pick-up in consumption levels, an easing in credit availability, as well as an influx of tourists this year and in 2011, will encourage cash flow within retail.

The coverage of the malls indicates a variety of positive messages, reﬂecting resilience and growth. With the exception of miscellaneous negative news, the majority of the coverage indicates a strong revival. In terms of competition, it seems Dubai Mall and MoE are taking the lead. Ibn Battuta Mall is in third place. Deira City Center and BurJuman are neck-and-neck while Waﬁ lags behind. A strong PR campaign can help attract customers and improve perception. Q

Hisham Elzubeir, research director, Mediastow, Dubai

October 2010 Gulf Marketing Review 93

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

COUNTER CULTURE Retail sector H1 2010 ad spend analysis shows robust growth. SHOPPING MALLS and department stores in the region reported an eight per cent increase in ad spend in the first half of 2010 compared to the first two quarters of 2009. The UAE is the biggest spender in this sector in the region and consolidated its position by posting robust growth of 13 per cent during the same period. The sector ranked next only to government advertising in the UAE during the Holy Month of Ramadan. The GCC reported a five per cent increase in spend while the Levant, where some new major malls are opening, saw a 21 per cent increase in H1 2010. Pan Arab Media, which accounts for only 10.5 per cent of the region’s market share, increased by 35 per cent as big names present in a number of markets in the region communicated to a wider reach rather than only advertising locally. Saudi Arabia retained its second position as it maintained the ad spending similar to the second half of 2009.

94 Gulf Marketing Review October 2010

Egypt, a country that is emerging as the biggest advertising market in the region for all sectors, replaced Kuwait by posting a 14 per cent surge in spending for the sector. Qatar, reporting a 76 per cent rise in the sector in the first half of 2009, underwent corrections and declined by five per cent in the first half of 2010 as compared to the same the previous session. Jordan has witnessed the highest percentage increase of 65 per cent in spending in the sector in the region. Among major media types, TV reported an increase of 17 per cent while newspapers, with a 66 per cent share among all major media types, grew by six per cent. Magazines, with a nine per cent share among all major media vehicles, increased by 11 per cent. TV shares stand at 16 per cent in the region. In the UAE, where TV accounts for only a two per cent share of spending, was down by 54 per cent, while press,

including newspapers and magazines, gained around 17 per cent each. The top three spenders in the region for the retail sector are Carrefour, Home Tech and Lulu. In the UAE the top spenders for H1 2010 are Carrefour, Lulu and Al Maya Supermarket. The top spender in the UAE for the ﬁrst half of 2010 with newspapers is Carrefour. Lulu Hypermarkets takes the ﬁrst rank in TV and radio. It’s also the top spender in magazines, but City Center is the top spender for outdoor. The ad spend is calculated on the media rate cards and does not account for incentives and discounts that advertisers may avail from media owners. Q

Shaharyar Umar product manager Pan Arab Research Centre, UAE

BLOX

COMMUNICATIONS L.L.C.

SECTOR ANALYSIS

CATEGORY: SHOPPING MALLS, DEPT. STORES & SUPERMARKETS - ARAB ADVERTISING MARKETS - 2010 MILLIONS US$97

MARKETS RANKING & MEDIA SPLIT (000 US$) Television Rank Market Name & Abbreviation 2008 1 2 3 4 5 6 7 8 9 10 11

United Arab Emirates UAE 20,409 Kingdom of Saudi Arabia KSA 23,158 Pan Arab Media PAN 4,907 Egypt EGY 6,884 Qatar QTR 4,746 Kuwait KWT 9,734 Lebanon LEB 3,237 Jordan JOR 1,299 Oman OMN 1,846 Bahrain BAH 493 Other markets** OTH 2,115 Total All Markets 78,828

2009

%Var’n 2010 YTD

2010

24,266 18,391 9,475 7,807 8,372 11,125 4,283 2,145 2,084 951 1,389 90,288

27,301 18,662 12,780 8,893 7,960 7,796 4,839 3,534 2,630 960 1,873 97,228

421 -54 13 -90 11,926 38 43 -43 0 314 -39 2,524 78 0 -100 0 -100 0 1,225 63 16,466 32

13 1 35 14 -5 -30 13 65 26 1 35 8

%Var’n YTD

Media Split (Millions US$) Magazines Radio

Newspapers %Var’n YTD

2010 21,118 15,757 5 6,710 6,343 5,706 1,123 3,487 2,498 732 487 63,966

18 -1 -84 24 2 -36 7 66 24 8 57 6

2010

%Var’n YTD

4,587 872 849 486 232 1,488 249 47 132 122 92 9,156

16 19 7 -20 -32 14 30 24 89 -29 48 11

2010 299 103 0 721 27 288 71 0 0 88 69 1,666

+8%

Outdoor

%Var’n YTD -56 -87 63 -63 66 -92

-12 -74 -51

2010 843 1,917 0 933 1,358 0 872 0 0 18 0 5,941

Cinema

%Var’n YTD

2010

15 130 -26 -22 -100 19

800 8

33 0 0 0 0 0 0 0 0 0 0 33

%Var’n YTD -66

-66

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

Ranking of Markets & Media Split (000US$) 100%

Category split by market 13% 19%

75%

28% 3% 1% 2%

50% 25%

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

9% 8% 8%

4% 5%

0% Total GCC LEV UAE KSA PAN EGY QTR KWT LEB JOR OMN BAH OTH 97228 79858 17370 27301 18662 12780 8893 7960 7796 4839 3534 2630 960 1873

Television

Newspapers

Magazines

Radio

Outdoor

Cinema

SPLIT BY PRODUCTS - 2009 GCC & Levant Markets 67%

Pan Arab Media 51%

32%

GCC Markets 47%

Department stores/supermarkets Shopping Malls Duty Free Shop

24%

33%

Levant Markets 75%

66%

Department stores/supermarkets Shopping Malls Duty Free Shop

TOP BRANDS - ALL MEDIA (000 US$) - 2009 Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Brand Carrefour Home Tech LuLu Spinneys Agamy Star Ikea Gazzaz LuLu Bahgat Stores City Center Centrepoint Hyper Panda Al Najjar Int.s. Al Maya S.mkt Hyper Panda Red Tag Dasman Centre Al Danube Le Charcutier BurJuman

PAN ARAB MEDIA Value 7,206 5,738 4,571 3,046 2,642 2,294 2,131 1,942 1,815 1,777 1,415 1,357 1,325 1,066 1,011 1,009 1,004 993 976 958

96 Gulf Marketing Review October 2010

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

Brand Home Tech Agamy Star Bahgat Stores Al Najjar Int.s. Al Othaim Mall General Est. X-press BurJuman Waﬁ Dubai Duty Free A.K.Saeed Mercato Al Ghurair Bloomingdale LuLu MAF Hyper Panda Al Arabi Center Dubai Outlet Mall Spinneys

GCC Value 5,738 2,513 1,774 1,325 634 624 250 245 223 190 188 179 167 138 124 116 112 98 81 81

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

LEVANT Brand Carrefour Home Tech LuLu Agamy Star Ikea Gazzaz LuLu Bahgat Stores City Center Centrepoint Hyper Panda Al Najjar Int.s. Al Maya Suprmrkt Hyper Panda Red Tag Dasman Centre Al Danube BurJuman Oasis Center Othaim

Value 6,092 5,738 4,571 2,513 2,294 2,131 1,942 1,774 1,625 1,381 1,357 1,325 1,066 1,011 1,009 1,004 993 958 922 895

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

Brand Spinneys Carrefour Le Charcutier Hyper One Samih Mall Ragab Sons City Mall Metro Market Khair Zaman X-press Al Mahmal C Town TSC Signature Fathalla Al Farid Whole Sale Centr Safeway’s Designopolis Omar Afandi TSC Mega

Value 2,543 1,114 976 894 843 806 714 620 575 503 470 445 390 375 364 323 305 302 298 284

Source: PARC

GCC & LEVANT

CATEGORY: SHOPPING MALLS, DEPT. STORES & SUPERMARKETS - ARAB ADVERTISING MARKETS - 2010 AGCC, LEVANT, PAN ARAB & ARASIAN MEDIA MARKET ADVERTISING EXPENDITURE FOR TOP PRODUCTS (000 US$) 2008 - 2010 (JAN-JUL)

MILLIONS US$97

Media Split %

Dept.str/supermarket (DSS) Shopping Mall (SML) Dubai Duty Free Shop (DFS)

2008 48,639 29,549 640

2009 54,497 35,010 781

2010 65,652 30,943 633

Sh% 68 32 1

Total

78,828

90,288

97,228

100

%Var’n Y10/09 20 -12 -19

2010 Media Split %

TV 13 24 34

NP 72 52 45

MG 7 14 19

RD 2 2 0

OD 5 8 3

CN 0 0 0

Product Growth 2008 - 2010 (000 US$) 70000

DSS

60000

SML

50000

DFS

40000 30000 20000 10000 0%

20%

40%

60%

80%

100%

DSS

Newspapers Television Magazines Outdoor Radio Cinema

SML

DFS

2009

2010

2008

OVERALL MEDIA SPLIT ANALYSIS (000 US$) Media

2008 Value 6,767 54,805 9,322 3,597 4,219 118 78,828

Television Newspaper Magazine Radio Outdoor Cinema Total

2009 Sh% 9 70 12 5 5 0 100

Value 12,467 60,578 8,255 3,414 5,476 98 90,288

2010 Sh% 14 67 9 4 6 0 100

Value 16,466 63,966 9,156 1,666 5,941 33 97,228

Var'n % 2009/2010 32 6 11 -51 8 -66 8

Sh% 17 66 9 2 6 0 100

MONTHLY SPEND ANALYSIS (MILLIONS US$) 2008 - 2010 18 16 14 12 10 8 6 4 2 0

Month Jan Feb Mar Apr May Jun Jul Total Jan

Feb

Mar 2010

Apr

May

2009

Jun

2009 11 11 11 14 16 13 14 90

2010 12 15 13 14 13 15 16 97

Jul

Total Category - Media Split %

(000 US$ - Semi Logarithmic)

66% 17%

6% 2%

2008

Var’n % Y10/09 14 44 12 -2 -23 9 16 8

2008

Overall Media Split 2008 - 2010 70000 60000 50000 40000 30000 20000 10000 0

2008 11 11 10 11 12 12 12 79

2009

Newspapers Television Magazines Outdoor Radio Cinema

2010 Television

Newspapers

Magazines

Radio

Outdoor

Television Top Spenders Rank Brand 1 Home Tech 2 Agamy Star 3 Bahgat Stores 4 Al Najjar Int.s. 5 Le Charcutier 6 Spinneys 7 X-press 8 LuLu 9 Al Othaim Mall 10 General Est.

2010 5738 2531 1774 1325 947 803 753 685 634 624

Newspapers Top Spenders Rank Brand 1 Carrefour 2 LuLu 3 Gazzaz 4 Ikea 5 LuLu 6 Spinneys 7 Hyper Panda 8 City Center 9 Al Danube 10 Al Maya Supermarket

2010 6764 3715 1848 1789 1725 1425 1172 1140 974 972

Magazines Top Spenders Rank Brand 1 Virgin 2 Lulu 3 Max 4 Ikea 5 Bloomingdale 6 Carrefour 7 City Center 8 Sahara Centre 9 Gazzaz 10 Centrepoint

2010 665 447 367 353 318 300 299 292 283 277

Radio Top Spenders Rank Brand 1 Spinneys 2 Ragab Sons 3 On The Run 4 Khair Zaman 5 LuLu 6 Hyper One 7 City Center 8 Hyper Panda 9 M.h. Al Shaya 10 Dubai Co-op Soc.

2010 194 192 101 92 70 62 49 41 40 33

Outdoor Top Spenders Rank Brand 1 Red Tag 2 Spinneys 3 Dasman Centre 4 LuLu 5 City Center 6 Hyper Panda 7 Gateway Plaza 8 City Mall 9 Stars Avenue 10 Panda

2010 743 581 495 409 289 270 231 188 170 152

October 2010 Gulf Marketing Review 97

Source: PARC

Product & Abbreviation

+8%

Top Brands Y2010 (000 US$)

DIARY

GMR EVENTS

October The ABC of Development MECSC Date: October 3 Venue: Kempinski Nile Hotel, Cairo T: +971 4 359 7909 W: mecsc.org Retail Leasing MECSC Date: October 4 Venue: Kempinski Nile Hotel, Cairo T: +971 4 359 7909 W: mecsc.org

The GEMAS effie Mena Awards were launched to recognise and encourage effectiveness in the marketing industry across the region. They combine the regional marketing effectiveness awards – the GMR Effectiveness in Marketing Awards (GEMAS) – and the internationally renowned Effies. In 2009 the GEMAS and the Effies joined forces as the GEMAS effie Mena Awards. The initiative brings a broader international dimension to the GEMAS and marketing in the Middle East while launching the Effies into one of the most dynamic, emerging markets in the world. More than anything, however, the GEMAS effie Mena Awards mark a major milestone in the history of marketing in the Middle East as the sector rapidly matures to take its rightful place on the global stage. (See pages 26-32) The glittering awards presentation ceremony takes place on November 4, 2010, at the Joharah Ballroom, Madinat Jumeirah, Dubai. We look forward to welcoming you there. GEMAS effie Mena Awards 2010 Venue: Madinat Jumeirah, Dubai Date: November 4 T: +971 4 3910760 F: +971 4 3908737

98 Gulf Marketing Review October 2010

Gitex Technology Week Dubai World Trade Centre Date: October 17-21 Venue: Dubai Intl Exh Ctr T: +971 4 308 6124 W: gitex.com Erbil International Fair 2010 IFP Expo Date: October 18-21 Location: Erbil International Fair Ground T: +961 5 959 111 W: ifpexpo.com

Cityscape Global IIIR ME Date: October 4-7 Venue: Dubai Intl Exh Ctr T: +971 4 335 2437 F: +971 4 335 1891 W: cityscapeglobal.com

4th Annual Middle East Hospitality Expansion Congress 2010 Naseba Date: October 20-21 Venue: Beach Rotana, Abu Dhabi T: +971 4 433 0692 W: hotelexpansion.com

3rd Saudi Media Show 2010 Batola Date: October 10-12 Venue: Riyadh Intl Exh Ctr T: +966 1 470 3844 F: +966 1 470 3855 W: saudimediashow.com

Sharjah World Book Fair Expo Centre Sharjah Date: Oct 26-Nov 6 Venue: Expo Centre Sharjah, UAE T: +971 6 5770000 W: swbf.gov.ae

10th International Automobile Show Expo Centre Sharjah Date: October 14-18 Venue: Expo Centre Sharjah, UAE T: +971 6 577 0000 F: +971 6 577 0111 W: int-autoshow.com

Total Marketing IIR ME Date: Oct 31-Nov 3 Venue: The Address Dubai Mall T: +971 4 335 2437 W: iirme.com/totalmarketing

Abu Dhabi Medical Congress IIR ME Date: October 17-19 Venue: Abu Dhabi Natl Exh Ctr T: +971 4 336 5161 F: +971 4 336 4021 W: abudhabimed.com

November The Middle East Online Trading Summit & Awards 2010 Arabcom Group Date: November 9-10 Venue: Jumeirah Emirates Towers Hotel, Dubai T: +971 4 321 1164 W: meotsummit.com

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