Public relations outfits in the region expect companies to tighten marketing budgets further as they make cuts to spending on the back of a slowing economy.
A survey from the Middle East Public Relations Association (Mepra) showed that more than a third expect budgets to fall this year.
Of the 138 respondents to the Mepra survey, two-thirds considered investment in the PR industry would stay the same or grow throughout the year. This was a huge drop from 87 per cent in last year’s survey.
The second half of last year and this year so far has been a challenging economic climate for the UAE and Mena region with oil prices remaining low, visitors from Russia and China slowing and a strong dollar, to which the dirham is pegged, making the country more expensive for many tourists.
“We are seeing increasing caution among many of our members,” said Ray Eglington, a board member of Mepra.
He said half of respondents from independent agencies foresaw budgets falling this year. “The caution isn’t particular to PR. I’m sure across many sectors there is caution but independent agencies are having to pitch to different clients and without an obvious or overt return on investment it’s tough.” He said the industry is still in a growth phase and it needs to show clients results.
The IMF said this month that it expects the UAE economy to expand by 2.3 per cent this year. It said growth in Abu Dhabi will slow to 1.5 per cent from 4.3 per cent last year and it believes Dubai’s economy will expand by 3.3 per cent this year from 3.5 per cent last year, in part due to a slowdown in the construction industry.
The UAE’s retailers have experienced falling sales throughout the year and car dealerships have reported falling sales of up to 25 per cent.
Industry insiders believe that this need not be an automatic detriment to the PR industry.
“Changing market conditions can actually see more budget being made available for marketing,” said Eileen Wallis, a managing partner of the regional communications consultancy The Portsmouth Group.
“We understand from speaking to some clients that they plan to outsource additional aspects of their marketing or communications strategy rather than increasing headcount at present.”
She said that clients are equally keen to maintain their visibility and remain top-of-mind with their customers – as PR is one of the most cost-effective ways to do so, budgets have the potential to increase in the next 18 months.
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