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Ad agencies must reinvent and give tailored resources to clients

More mergers likely between agencies offering different expertise

  • Reaping benefits
    Advertising billboards in Dubai. A client-agency relationship is a one-to-one, and no amount of industry diktaImage Credit: Karen Dias/Gulf News Archive
  • Reaping benefits
    "Third-quarter spending may not be affected radically as July is DSS and vacation time, Ramadan is in August aImage Credit: Supplied
Gulf News

Dubai: Mild of manner at most times, Tanvir Kanji practically bristles at any suggestion he is one of the old guards of the UAE's advertising industry.

"If that means I have been around far longer than most in the ad industry here, I will say it's one way of looking at it," said Kanji, founder and head of Inca Tanvir.

"But I have my prejudices against that word, which suggests my best efforts are in the past.

"I believe I bring in not only the same energy to my work today as it was in 1976, but the added advantage of years of experience and insight into the consumers' psyche.

"If this number of years requires the use of the word ‘old guard', that's your outlook. It's certainly not mine."

Indeed, a more fitting attribute to one of the founder members of the UAE Chapter of the International Advertising Association would be that of being a pioneer.

Having said that, these are interesting times the local and region's advertising industry is going through. No sooner had the industry emerged from the gloom of the 2009 financial crisis in the second half of last year, it had to reckon with the impact of the region's on-going political crisis.

Kanji — who was named the ‘Advertising Person of the Year' at the second Dubai International Advertising Festival in 2009 — makes out a case of what could be in store for the industry in what has been nothing less than a topsy-turvy year.

Gulf News: The first-half of the year did not turn out as well as many had hoped for the local ad industry. Are advertisers still shaky about their budgets and spending?

Tanvir Kanji: Even a small change in market dynamics and you have nervous marketing managers starting to slash ad budgets. Brand equity built over decades is destroyed in months.

Economic cycles are a fact of life even in normal times. Add in the factors of natural disasters, regional tensions and mismanaged economies by developed nations and you have every ‘excuse' in the book for cut-backs.

Being part of the global landscape, our region also becomes a victim. However recent measures such as granting of visas to property buyers, we hope will spur property purchases and consequently downstream spending — from carpets and curtains to furniture and appliances.

It will also see owners either settle their families here or use it as a holiday home which in turn could result in spend on consumables.

But do you foresee a further tightening of belts in the third quarter? Amongst the gloom, are there any particular sectors, which seem to be doing better on the ad spend side?

Third-quarter spending may not be affected radically as July is DSS and vacation time, Ramadan is in August and September is ‘back-to-school' season. These periods have their own dedicated targets and budgets.

Food items, furniture and household and retail — especially supermarkets — are heavy advertisers during Ramadan followed by leisure and hospitality during pre-Eid. The wedding season follows on giving a spurt to trousseau, jewellery and gift shopping. This has been the pattern in the past and we hope it will not only continue, but have a major resurgence to make up for the drab first quarter.

The UAE's advertisers made some far-reaching changes on payment processes in the wake of the downturn and the unpaid bills that it generated. Do you see the industry uniformly sticking to the new requirements?

A client-agency relationship is a one-to-one, and no amount of industry diktats can be effectively enforced. Ad agencies are notorious for financial indiscipline and seldom stick to their resolutions. Add the fact that there is no cohesion or regulatory body, and several clients start to demand more and more for less and less. The unfortunate aspect is some agencies accede to these unreasonable demands and end up with negative cashflows, thus digging their own graves.

Some consolidation plays have been recorded in recent months within agency networks in the region. Do you foresee more of the same?

The consolidation is done usually within the group to cut costs, for instance on administration and accounts, etc. Group agencies need to keep their individual identities in order to handle accounts which have ‘conflict of interest' aspects.

I personally do not see much group consolidation but I think we will see more mergers and acquisitions especially between agencies offering different expertise, i.e. between above-the-line and below-the-line or between design and digital, etc.

Do you feel there's still room in the market for mid-sized — or even smaller — agencies to come through?

The question is not of numbers or size, but more of quality of service. As more businesses are established, more agencies are required to handle the competing businesses or brands.

The problem though is that every one tries to ape the big network set-up. I personally feel that agencies need to reinvent themselves and tailor their resources to their client's requirements.