The UAE advertising industry that saw some of the best times in the past few years has slumped by 34.22 per cent, Ramzi Raad, Chairman and CEO of TBWA/Raad has said.

However, with assured confidence in the local and regional markets, he highlights government figures that predict a recovery by the end of the year.

In an interview with Emirates Business, Raad says TBWA/Raad has expanded into healthier markets such as Abu Dhabi and Qatar.

With the onset of festive season (Eid, Diwali, Christmas and New Year), along with other events and exhibitions, do you see any recovery for media in the country? Despite the fact the UAE ad market has witnessed a 34.22 per cent drop to the end of September 2009 – in comparison to 2008 – advertising spend is predicted to grow this year and is expected to remain at the same level in 2011.

Festivals along with events and exhibitions play a big part in spiking advertising activity and boosting the overall averages, but much more important is the underlying growth we see in the business and economic activity in the region. At TBWA, we deal with a number of global clients and we see global strategies toward the Middle East changing from a market where products and services are sold into a market that companies are building their strategies around.

In a globalised world this was always going to happen, the global economic downturn just speeded up the process up. In parallel, we are working with more and more regionbased clients who are preparing to do business in a global marketplace, for example Etihad Airways and Abu Dhabi Tourism Authority. Outdoors took the biggest hit but Abu Dhabi is recording some gains now. What do you think of the outdoors market in Abu Dhabi.

Abu Dhabi's advertising market has seen big and continued momentum despite all the doom and gloom we seem to be surrounded by. And we are seeing growth at all levels and in all sectors. The tourism sector has started taking roots now and large development projects that we read about being stalled elsewhere are going ahead in Abu Dhabi. Projects such as Saadiyat Island, Desert Islands, Yas Island, Al Raha Beach, Central Market, to name a few.

This activity is sustaining media in general and outdoor activity in particular. But that is not to say we do not believe there is no issue for the outdoor market going forward. For us, the success of the outdoor market is more about its ability to innovate. We are not in the business of offering our clients broad-brush, catch-all advertising solutions. Our emphasis is very much on our ability to engage our client's customers as efficiently as possible. We can do this with online, we can do this with press to a degree and we can do this through programming on television. The faster outdoor becomes electronic the better we can tailor messages, execute in time-specific ways and avoid the high production costs especially for large format boards.

The issue for outdoor for us then is not the lack of a market, it is the speed to which they can innovate versus other competing channels. Abu Dhabi is investing in activities and events and more advertising is appearing in and from Abu Dhabi. Is this a temporary phase or do you belive the capital will have an upper hand in future? I mentioned earlier that advertising spend in the UAE is expected to grow and the emirate of Abu Dhabi is driving the UAE growth. This growth is by no means a temporary blip. What we are seeing is the consequence of a sustained and pre-meditated vision for Abu Dhabi taking effect. What started as a grand vision from Sheikh Zayed bin Sultan Al Nahyan has been purposefully and systematically delivered by the Abu Dhabi Inc, the increasingly sophisticated, modern and competitive businesses charged with the delivery of Abu Dhabi onto a global stage. Your company has also set up a branch office in Abu Dhabi. What is your opinion about the capital's ad market?

We have been operating in Abu Dhabi since 2005 and we are major partners with key Abu Dhabi-based businesses such as Etihad Airways, Abu Dhabi Tourism Authority, twofour54, TDIC, ADMM and Abu Dhabi Airport Company. Just as Abu Dhabi is critical to the future successes of the UAE and the significance of GCC on a global stage, Abu Dhabi is an important part of our growth story. Abu Dhabi is a key source of business for us, both as a market in its own right and a gateway to the rest of the world. But more than that, and with reference to twofour54 in particular, Abu Dhabi is becoming a strong creative hub. In Abu Dhabi, we need to produce a creative product that is better than generated anywhere else in the world. And we need to innovate how we engage audiences as fast as, if not faster than, anyone else in the world. The spotlight is very much on Abu Dhabi and we have all the elements in place to deliver a truly world-class innovative creative product.

Clients have moved to short-term contracts (even quarterly and monthly plans) with an emphasis on exit clauses. Does it spell uncertainty in the industry? We are not witnessing this trend in short-term contracts. In fact, we are seeing more and more clients wanting to build and prepare for the medium to long term by putting in place the sort of contracts that result in genuine partnerships. Brands are not built over-night and we develop with our clients long-term and sustainable value propositions for their audiences and stakeholders.

It makes sense that considering what we do, our contracts are long term. We can see the benefit of short-term contracts in executional project-based work, but that is not the work we do and our clients agree with us. Decline of real estate has led to payment problems in the industry and media houses are seeking their payments? How big is this problem and do you see any solution to this, as most payments were due in 2008 and the accounting books for that year have closed? Cash flow is a problem for any business and keeping on top of it is the key. We have in place certain criteria on which we contract business and this works to our and our client's advantage.

We do see a general attitude where more advertisers are turning into difficult payers and it is important we address that. Transactions should be effortless and agreed terms taken seriously. If we do not address this issue, we are creating unnecessary barriers to our collective growth as a region. How did TBWA/Raad cope with the crisis? Did you have to correct your manpower as per the needs or have you acquired new accounts to accommodate the existing staff? We coped with the crisis by focusing on what we do best, continuing to innovate our product, supporting our talented people and seeking opportunities where we believed we could add significant value.

Our business is diversified both in terms of geography and sector exposure and our product allows us to follow the market. Can you name some of the new clients you have acquired in the region? In Abu Dhabi, we are now working with Abu Dhabi Tourism Authority, twofour54, Invest AD, Abu Dhabi MAR and ADMM. In Qatar, we have been retained by Qatar Foundation. In Saudi Arabia, we won Almarai and Deemah Biscuits. We are the agency of record for all these clients. When do you see the situation stabilising in the industry? We remain very optimistic about the future and we see significant growth potential going forward.

Stability will come as we further move away from a marketplace driven by speculation and enter a market driven by genuine enterprise. This is happening more and more in the region.

Broadening Kuwait operations

TBWA/Raad is strengthening its presence in Kuwait through an agency affiliation agreement with BCOMAD. The new company will be known as TBWA/Raad/BCOMAD. May Al Babtain, Chief Executive Officer of BCOMAD, said: "The affiliation with TBWA/Raad is a significant milestone in the history of BCOMAD Kuwait. TBWA is widely recognised by industry observers as the best networked agency on the global advertising scene and I am very confident this induction into the global TBWA family will deliver immediate benefits for both our clients and employees".

TBWA has 267 offices in 77 countries, and about 12,000 employees worldwide. It creates ideas for global clients, including adidas, Apple, Beiersdorf, Henkel, Infiniti, Mars, McDonald's, Michelin, and Nissan. "This enhancement to TBWA/Raad's Middle East and North Africa network is part of a holistic business approach to further build on the 10 years of dedicated service TBWA/Raad has delivered to its clients." said Ramzi Raad, Chairman and CEO of TBWA/Raad Middle East.

TBWA is one of the fastest-growing global advertising networks, and was named by both Advertising Age and Adweek as global agency network of the year in 2008 and the most-awarded agency network by Creativity magazine in 2007.