Listen to the article
Hisham Maksoudian, CEO of Riyadh-based independent agency ADCOUNCIL knows the market really well and has been witnessing the flood of rival agencies pour into the Kingdom. He shares his pertinent outlook on the evolution and state of the ad business.
How would you describe the current general ad business mood in Saudi Arabia with so many agencies expanding their footprint to the kingdom, ready and hungry to seize every opportunity presented by Saudi Arabia’s booming economy?
The Saudi advertising industry went into a drastic change during the last 10 years. The digital invasion created a whole new approach of looking into brands and products; most importantly, it changed the whole team structure and professional manpower at the agencies. The ones that went with the flow of change, survived.
And like any country across the globe, people tend to establish their own business, and one of the tempting industries (from the outside) is advertising. The agencies who started new operations in Saudi are locals, because most of the international ones, if not all, are operational since the 80’s. But I believe only few survived.
There are a lot of mega projects going in Saudi, such as Neom, The Red Sea, King Salman Garden, Jazan, Oxagon, Qimam Al-Sawdah in Abha, Qidiyah and many others, add to it the Riyadh Season and the international events that have become annual happenings; all these need intensive communication.
Between the real estate, tourism, the retail, the banking and the telecom, there is a room for everyone.
However, despite the booming economy, world political instability—the Russian Ukraine War and recently the Palestinian-Israeli conflict—is affecting the investment mood.
How do you see the flood of rival companies affecting your business?
During the last two decades, we have witnessed the opening of hundreds of agencies, out of which, only a few still exist. Many went into price war, counting on a team catering from outside the country. They have taken a small share from small/medium local clients, but this didn’t last long. Today you must operate with a full staff based in Saudi Arabia made up of Saudi talent; otherwise you are out of the market. The standard Arabic language is rarely used. You must speak the Saudi dialect in almost every Saudi region. We are so proud to have a team of Saudis in every department. They are the ones handling the content creation, the social media management, the copywriting, the client service, the digital media, the events management coordination etc.
“Today’s main concern from most clients is: ‘How many Saudis you have in your operation?’, as clients are on the lookout for an agency that understands the local culture.“
Where do you see the biggest opportunities laying for Saudi-based ad agencies?
Creativity in campaigns is a standard practice. Just like saying a restaurant with no tasty food. You can’t survive at all without creativity. But with the fast pace, and being exposed to millions of impressions every day, many people are only noticing the headline, a picture, an offer. Today, in order to be noticed, a campaign needs a lot of funds. Digital is one element. 360 is key.
Plenty of sectors are booming in Saudi Arabia. Riyadh Season is going from strength to strength every year. The real estate projects are huge; we are witnessing districts coming up with thousands of units. And by the way, owning a house is becoming one of the most important issues in the Saudi culture. We are hearing everywhere the same sentence: ‘Why would I pay a rent, while I can pay it as an installment to my own house?’ Surprisingly, the young generation is eager to own houses as well.
The retail shifted almost totally to digital. Financial institutions are doing a lot to grab market share. The telecom will always be present on the advertising front scene. Above all, the ministries, during the last five years have become very active. Saudi Arabia remains a big market for the advertising industry.
What do you think agencies need the most to succeed in a market like Saudi Arabia?
Today’s main concern from most clients is: ‘How many Saudis you have in your operation?’, as clients are on the lookout for an agency that understands the local culture.
Also, agencies that are offering only creative solutions are facing severe competition from the full-fledge ones. We all know the split in services that happened in the beginning of the 90’s. Nowadays, many multinationals are merging again their different operations to cope with the trend. Many clients would like to talk to one client service officer rather than deal with five or six different individuals.
We, at AdCouncil, for almost 15 years, we kept on offering the creative, the media planning and buying, the strategic thinking, the PR, the activations and we added to it the digital service, which includes content creation and social media management as well as the events management. Also, many clients would like to have international exposure; and that is why a company cannot survive unless it has an international affiliation. At AdCouncil, we partnered up with Media Consulta Germany. With their 80 offices around the globe, they played a significant role for some of our clients’ international exposure.
How would you picture Saudi Arabia 10 years from now? Do you see it stealing the show in the region mainly over Dubai?
Saudi Arabia, with a population of more than 35 million, one of the world top oil exporters, with one of the most powerful leaders in the world, is becoming a major player at the political, economic, and financial fronts. As a member of the G20, and a world reference, it is attracting almost every business category.
In sports, Saudi Arabia confirmed the 2034 World Cup; the Paris-Dakar, the Formula One are happening here; they are also planning the Winter Olympics at Neom, and the list never ends.
Having said that, Saudi Arabia is not stealing the show. It is in fact running the show, not only from Dubai, but also from many other countries. In fact, we witnessed a major change during the last five years within the culture; empowering women has had no limits. The number of new restaurants and lounges that started during this period is tremendous, and of very high standard.
One important point is to be highlighted: The young Saudi generation is eager to learn; they are very much exposed to the world, and they are filling almost every job opportunity in the market.
We are witnessing change every day. In 10 years, we will surely bee witnessing major developments at every aspect. But what I really sense is that Saudi Arabia is going to be on the world top tourists’ destinations list.
We hope, at AdCouncil, to be part of the Saudi development. In fact, we are the perfect ambassadors to that great brand named “Saudi Arabia”.
