Advertising suffers as relationships deteriorate

Dubai: The region's advertising industry is suffering from deteriorating relations between agencies, clients and the media, agency bosses said yesterday.

With the financial crisis hitting the advertising market hard this year, yesterday's debate at the Media and Marketing Show in the Dubai World Trade Centre focused on major challenges currently facing advertising agencies.

Most of the six chief executive officers of the region's top agencies agreed that relations across sectors in the industry had deteriorated as times got tough.

"It has been shocking," said Edmond Moutran, chairman and chief executive of Memac Ogilvy.

"What I see is a partnership in good times. In bad times it's everyone for themselves."

With clients pushing for deeper discounts and some not honouring outstanding commitments, the squeeze on agencies is becoming dangerous, he added.

"We are talking about bad debts that could drive an agency into bankruptcy," said Moutran.

"We have clients asking for 30 per cent reductions."

Roy Haddad, chairman and chief executive officer of JWT, said the pressure the media are facing is also affecting advertisers.

"The media is under pressure because revenues dropped," Haddad said. He added that the rise of online media sources was a major factor beyond the economic crisis.

Joseph Gossoub, chairman and chief executive of the Menacom Group, was more pessimistic.

"Partnerships are titles we hide behind. We talk about partnerships but this never existed," he said.

Raja Fares Trad, chief executive of Leo Burnett in the Mena region, said working together with clients on creative projects was a vital part of the relationship that had suffered as money became the most central issue.

Whilst stressing that they still enjoy clients who respect a working relationship, some simply want to talk money.

"The financial director of the agency sits with the client. This should not happen. The procurement comes to the room with only the aim to squeeze the agency. You need to bring people who are in marketing, who understand the value this agency brings to the brand," Trad said.

Talent turnover

Another challenge for advertising agencies globally, and in the Mena region particularly, is a fast turnover of talent.

The panel agreed that the industry, which hopes to attract young talent enthusiastic, is losing those people as they find their roles are less creative and more managerial.

"They end up being project managers and this is not what they aspire to do," said Trad. "When we first joined advertising we enjoyed it."

Alain Khoury, chairman and chief executive of Impact/BBDO called for a return to this concept.

"We used to have excited people who wanted to do things collectively. We have to rebuild this concept," he said.

Advertising agencies in the region need to get rid of old thinking by re-introducing younger creatives, he said, and removing a lethargy that has stuck.

"It's an attitude of people who got too old to think," said Khoury.