Metro unlikely to run over radio advertising in Dubai

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    By Jane Ferguson, Business Features Writer   www.gulfnews.com

    Dubai: Dramatic falls in advertising budgets around the world have led to speculation of certain mediums filling others’ shoes, as businesses look to cheaper alternatives. In the UAE, as the Dubai Metro prepares for its initial opening, there is speculation that radio listener numbers may drop as commuters take to public transport rather than use private vehicles.

    Gulf News archive Gulf News Broadcasting's Radio 2 studio in Dubai. Radio's lack of dependence on the real estate sector has enabled GNB to hold on to similar advertising rates as last year as other platforms feel the effects of the credit crunch.
    Gulf News archive Gulf News Broadcasting's Radio 2 studio in Dubai. Radio's lack of dependence on the real estate sector has enabled GNB to hold on to similar advertising rates as last year as other platforms feel the effects of the credit crunch.

    Those in the advertising business, however, say that despite some mediums faring better than others, every platform from radio to online has its place.

    “In general, no medium can replace any other medium,” Gassan Harfouche, Managing Director of advertising firm MEMS, of the Choueiri Group, said. “Every type of medium complements the other.”

    Most experts agree that the more recently introduced advertising platforms are complementary. Advertising is too broad a term to limit to a homogenous definition of ‘space’, and with varying products and different target audiences, choice in advertising mediums is essential.

    “Each advertiser has a specific target, but that is very tactical,” Harfouche said. Although he does not believe the Metro will detract listening ears from radio advertising commonly targeting commuters, it does present an opportunity for businesses, he said.

    This is also relevant to billboard advertising, he added. When comparing marketing goods on transport facilities to advertising on massive billboards, the two are so different that they will appeal to different businesses.

    “When you put advertising on a cab it is still, and is very limited in the type of message,” he said. On a billboard, however, “you have more space to put your ads up on and this is directly related to the impact.”

    Economic downturns are sometimes tipped to be boom times for radio, as the medium is seen as highly cost-effective. Those in the industry say they are faring well, but are not experiencing a surge in business from those moving away from other platforms.

    “I do not think that radio advertising revenues are up substantially on 2008,” said Vikram Dhar, head of Gulf News Broadcasting (GNB). “But increases in volumes? It’s just not happening. We’re doing better than 2008, but we’re nowhere close to what I had predicted in October of last year.”

    Whereas GNB had hoped to increase advertising rates by 25 per cent for 2009, they are experiencing the same price freeze as many others in the industry, he added.

    Holding onto similar rates as last year however, he admits, is an achievement compared with other mediums that are suffering. This partly due to radio’s lack of dependence on the real estate sector, an industry that by nature requires visual advertising.

    “We were very fortunate that real estate clientele only comprised about 9 per cent of our total revenue,” Dhar said. “But there were real estate-related industries that did a lot of advertising with us. They were the banks [and] the mortgage companies.”

    Most experts believe many commuters will still choose to use their cars despite the Dubai Metro, and those who do use the system will continue to listen to radios. “Dubai is peculiar in the sense people have luxury cars – not commuter cars – and the last mile connectivity, from station to the destination, to passengers will be a problem. The climate will play a major role too,” Sudhir Sharma, global branding expert and member of the Global Design Council for the World Economic Forum, said.

    Although many people will try the Metro during its first two months, he added, in the end it will settle down to regular commuters.

    “This would also mean a more segmented audience for radio channels. Which is a good thing,” Sharma said. “Higher segmentation in an audience has always resulted in laser targeting of advertising and an increase in revenues.”

    India, he said, is a good example of a new medium adding to the whole market rather than eating into other’s share.

    “TV did not eat into print advertising – in fact it added to it,” he said. “Internet has not eaten into TV advertising, and I believe the Metro will not eat into radio. Very soon the regular commuters will need to listen to their iPods during the commute to get over the boredom of commuting. In India, the metro in Delhi gave rise to the sale of mobile phones with FM radio. Hence radio is back, and will be there, don’t worry.”

    The internet is another advertising medium that experts are saying is experiencing high growth. Despite this, it too is an “additional leg” to the industry rather than an alternative, Kamal Dimachkie, managing director of Leo Burnett in the UAE, said.

    “Obviously you have certain media vehicles or classes that are going to grow at a faster rate and we’re seeing it particularly this year with online, everything that’s digital and everything that’s mobile,” Dimachkie said.

    “I think we’re experiencing growth figures in the range of around 1,200 per cent. So the growth is just phenomenal.”

    Ultimately, he stressed, the use of numerous advertising platforms is essential to any brand. What he calls “message whole-ism” is a powerful tool, particularly when that message can be tailored to suit the variety of mediums on offer.

    “We certainly preached it all along,” Dimachkie said. “The only thing that’s happening that’s different these days is we have a wider media choice, that’s all. That approach or philosophy has not changed at all for us, nor has such advice to clients. We think it’s absolutely spot on.”

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