Toby Southgate remembers the date just over a year ago that he realised the potential for the communications industry in Abu Dhabi. He was living in New York, mixing with investment bankers in the final months of the industry's bonanza, when the news hit the papers that the Abu Dhabi Investment Authority had bought a stake in Citigroup. It was Nov 27. "Even guys who worked in banks on Wall Street were like, 'Where is Abu Dhabi? Is it in Dubai?'" he recalls. "In that kind of level of ignorance, you've got to see an opportunity."
So he decided to capitalise on it by joining The Brand Union, an international brand consultancy, and helping the company to set up shop in Abu Dhabi in March this year. Less than nine months after opening, the modern, glass-lined offices on Airport Road are becoming too small for business. "At the moment, we are generating more work than our team of 12 people can handle," says Mr Southgate, now the managing director of the Abu Dhabi office, which handles strategic communications for clients such as Mubadala, Sorouh and the Tourism Development and Investment Company (TDIC). "If we can find the appropriate space and the appropriate talent, I would expect by the end of next year we would be more like 30 or 40 people."
Although Dubai remains the hub for the advertising and communications industry in the region, Abu Dhabi is playing an increasingly prominent role, with many of the major global advertising networks looking to move into or significantly expand their presence over the next year. One of them is the BPG Group, a regional communications company with a staff of 240 that does work for major Abu Dhabi projects such as Masdar and Saadiyat Island. In the past year, the company has increased its Abu Dhabi staff from four to eight and had to find larger office space. More growth is on the way.
"The business plan for 2009 is to significantly grow our Abu Dhabi office," says Clark Williams, the executive vice president and chief operating officer for BPG Abu Dhabi. "We have pretty much doubled our size, and plan to hire a bit more in the Arabic art direction and copywriting in the future." He likens the advertising industry in Abu Dhabi today to that of Dubai several years ago, when those who were hired to do communications work found themselves in the role of ambassadors for the entire emirate, not just the brand.
"We handled the Dubai Shopping Festival for the Dubai Government, and it was not just the business, it was also a reflection of Dubai," he says. "Just like it's not just Masdar, it's also how Abu Dhabi is perceived." Working for the Government has its advantages, particularly in times of economic uncertainty. "If you are doing work for Abu Dhabi, you will be doing a lot of government work," Mr Williams says. "That sector is not as connected to the economy or to the global financial meltdown that is happening. It's related to initiatives that are going to happen whether there is financing or not."
The prevalence of government-related communications work may be one of Abu Dhabi's main attractions while financial times are tough, but it was the promise of the diversification of the emirate's economy that attracted the first wave of major international advertising companies. Among those leading the way was Team, which became the first regional advertising agency to start in Abu Dhabi, rather than Dubai, when it set up shop in 1989. In 1997, it teamed up with the global advertising giant Young & Rubicam to form Team/Young & Rubicam. George el Maalouf, the managing director of the Abu Dhabi office, says he has seen at least one advertising bubble come and go in the capital.
"Many agencies came to this market and have closed their operations and left, and we are one of the few global agencies that have stayed," he says, noting that in the early days many of the local business sectors were dominated by monopolies. "Now you have competition across almost all the sectors, and whenever competition is there, it means you need communications agencies next to you. About three or four years back they [the agencies] started to turn their eyes to Abu Dhabi."
Today, Team/Young&Rubicam represents clients such as Sorouh, Daman and Abu Dhabi Commercial Bank, and has not yet felt the impact of the global economic downturn, Mr Maalouf says. "We are still recruiting," he says. "We are business as usual." Impact BBDO, another communications group, opened an office in Abu Dhabi two years ago, and since then its staff has grown from 11 to 55. Sam Husaini, the managing director of the Abu Dhabi office, says the decision came as part of a realisation that Abu Dhabi's growth could not be serviced from the company's Dubai office.
"In Abu Dhabi, to be successful in business, you have to be able to strike strong relationships, to get people to trust you and to show them you share the same values," he says. Today, the company boasts clients such as Etisalat, Aldar, Yas Island, Mubadala, Abu Dhabi Islamic Bank and the Abu Dhabi Media Company, which owns and publishes The National. It plans to continue its expansion next year, shifting its digital division, Impact Proximity, from Dubai.
The growth of major advertising agencies such as TBWA, FP7, Team/Young & Rubicam and BBDO in Abu Dhabi prompted BKP Music, the Dubai-based music and audio production studio, to open an office in the city this autumn. "When we first started to touch base with the agencies here, some of them were two or three people, and now they are like 60 or 70 people," says Barry Kirsch, the company's chief executive. "They are growing in leaps and bounds."
But Abu Dhabi's air of invulnerability to the global economic downturn is something of a double-edged sword for its growing communications industry. Property developer clients may still be able to pay their bills, but property prices are still sky-high, squeezing companies seeking bigger offices or hiring talent from abroad. "Hiring for Abu Dhabi is still very difficult because of the housing situation," Mr Williams says. "Singles who don't want to room with other people can't find studios or one-bedrooms, and for more senior people with families, it has just gotten ridiculous for villas."
He gave the example of an employee who last year rented a villa in the Al Raha Beach area for Dh250,000 (US$68,061) a year, and says it is now costing twice that much. "The salaries for middle managers are not going to cover that," he said. "My interviewees know the housing costs, and they say 'Look, this is a good salary if housing was cheaper, but 80 per cent of my salary will go towards the roof over my head'."
Mr Husaini calls the housing market the biggest barrier to the growth of the business, adding; "I have quite a bit of my staff commuting from Dubai." Mr Southgate says he is still "desperately" hunting for bigger offices at a price the company can afford. "Our ability to grow has really been affected by the real estate prices." The tight property market may help to explain the position of major advertising players such as Saatchi & Saatchi, which runs its regional operations from Dubai. "Definitely, we'll be moving to the Abu Dhabi area, that is clear," says Elias Ashkar, the company's chief executive for the Middle East and North Africa. "The question is timing."
Grey Group is in a similar position, as is Belgiovane Williams Mackay (BWM). "It's part of our development plans, but we don't know when it will be exactly," says Claudia Corbelli, a senior account manager at BWM, which has been working with Etisalat and Mubadala for the past two years. "It's a market that definitely needs an office." khagey@thenational.ae
