Innovative SMEs swap advertising for PR
Posted on 2017 Sep,12

A growing number of start-ups, SMEs and entrepreneurs in the UAE are substituting advertising for PR as they look to build a meaningful brand presence in the country’s fast-paced business community.

On average, a start-up or SME will spend up to 10% of total revenues on advertising, with research demonstrating the total spend decreases as profits rise. Typically, this investment is split between branding and content, social media marketing and analyst relations. However, start-ups, entrepreneurs and SMEs are increasingly turning to PR over advertising as they look to promote services and products through meaningful conversation in the media, with a higher ROI.

Bahaa Fatairy, Managing Director of Dubai-based PR & marketing agency BR Communications, said: “For a truly successful campaign a company should invest up to 30% of total sales in Public Relations and holistic media engagement strategies. PR and original content play a major role in letting people know what your brand is, what it does and what it stands for. In such challenging market conditions, with many competitors and big sharks, this is vitally important."

SMEs and start-ups are a backbone of the national economy, with SMEs alone employing 86% of the private sector workforce, according to the UAE Ministry of Economy, while 300,000 companies can be classified as part of the sector. In Dubai such businesses account for 95% of all enterprises and employ 42% of the total workforce, with Dubai SME placing the total economic contribution at 40% of GDP. 

In the first year of operations, when new enterprises are engaged in the crucial work of building a brand and presence, advertising budgets can diminish quickly. In the UAE, which accounted for 46% of all regional advertising spending in the first quarter of the year, print campaigns average AED3,000 per month, with broadcast reaching costs of AED30,000 per month and outdoor campaigns averaging AED300,000 per month.

Fatairy added: “The media landscape has changed significantly over recent years and today editorial enjoys higher regard than branding. A PR strategy provides an excellent opportunity for businesses to engage with their target audience through original editorial content, research and observations that add to the national conversation on a topical issue related to their product or service. It is not the size of the company that makes the story, but the relevance of the message.”

For SMEs and start-ups allocating a marketing budget for 2018, the advice is clear: a new business should invest in the engagement of its target audience on an existing media platform with information and observations that add or create value.

Fatairy concluded: “The UAE is a hotbed for business, which means there is a lot of support available for those joining the start-up community, although there is a phenomenal level of competition. It is critically important for new businesses to engage their audience and establish an identity and presence in the first months of trading. In order to focus on core activities, entrepreneurs and business owners should out-source PR and multi-platform marketing and focus their strategy on sharing knowledge and information in order to promote a product or service.”