Nakheel dumps UAE outdoor ads

Dubai-based property developer takes US$2 million out of local outdoor advertising market.

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By  Matthew Southwell Published  May 22, 2005

Nakheel has pulled the plug on roughly US$2 million worth of outdoor advertising in the UAE because its brand awareness in the emirates has reached critical mass. The Dubai-based property developer, which is responsible for landmark projects including the three Palm Islands and The World, will now spend the saved cash on billboards outside the UAE and on other advertising media in the region, as part of a strategic marketing review. Nakheel’s decision to ditch outdoor means the UAE’s outdoor ad firms will lose a client that accounts for approximately 7% of their market. One of the hardest hit will be Dubai Outdoor Media (DOM), which has the exclusive rights to hoardings on Maktoum and Garhoud bridges. DOM’s executive director, Akbar Sha Abbas, claims his company will lose US$1.3 million because of Nakheel’s decision. “Nakheel’s management has told us that they have decided not to continue with outdoor advertising in the UAE,” he said. “It is obviously disappointing to lose a valued client, but we will find a replacement for them.” In addition to terminating Nakheel’s outdoor spending in the UAE, the company’s director of sales & marketing, Simon Horgan, fired a warning shot across the bows of outdoor media owners, suggesting the medium is becoming a victim of its own success. “Demand is now so high in Dubai that prices have been pushed through the roof. Outdoor media is more expensive per capita in Dubai than anywhere else in the world except for Mumbai,” Horgan told Campaign Middle East in an exclusive interview. Nakheel’s total marketing spend, which is channelled through ZenithOptimedia, is not expected to drop. A comprehensive review is underway that will not be completed until the end of the summer. However, the decision has already been taken to focus more on directly raising demand from customers, rather than raising awareness of the Nakheel brand. UAE buyers will remain a target, but the wider GCC and Middle East, followed by Russia, China, the UK and North America, will attract a higher proportion of the company’s advertising. Spending on roadshows, non-UAE outdoor advertising, online campaigns and print advertising are all expected to increase in Nakheel’s plans later this year. Campaigns will be designed to directly raise demand for property, although Horgan conceded that this probably meant bringing more investors and speculators to the table than actual homeowners. Horgan also believes that the UAE outdoor advertising industry will have no difficulty replacing Nakheel’s bookings with other customers. But he concedes that the basic economic principal of reduced demand and increasing supply could lead to falling prices. He also suggests that the UAE outdoor market has become too cluttered, likening it to a newspaper that abuses its editorial to advertising ratios. “It stands to reason that advertising is most effective when ed/ad ratios are well managed,” he said. The UAE’s outdoor advertising industry agrees. Sami Al Mufleh, chief executive of Hills Advertising, has also called for restrictions and limitations on the proliferation of billboards. “There is a lot of clutter,” he said. “The quick profits you can make from outdoor advertising makes everyone greedy.”

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