Four months into the downturn of 2016, talk of redundancies and even closures are already gripping Dubai Media City and independents appear to be taking the brunt of it
Nobody ever said 2016 was going to be easy; some have even said it could be the worst economic downturn since the financial crisis of 2008. But until now it has always been talked about as if it’s something to come; something to wait for and hope it the talk is all just simply talk rather than something currently happening.
However, recent events would suggest the economic tide is beginning to turn against the advertising industry and, despite the confidence displayed by some boutiques in Campaign back in November, it seems it’s the independent agencies for whom the bells toll.
One agency that definitely appears to have sunk is Firefly. Calls to the digital specialist agency’s Media City office have gone unanswered, its website has shut down leaving just the message ‘We’re working on a new user experience’ and its director has returned to the United Kingdom.
And Campaign has also learnt this week that the Deira-based agency Zed Communications has downsized its 30-member team in response to an ever “cautious” market. As the agency’s chief executive David Finley explains, it’s smaller agencies that suffer the worst of the “peaks and troughs” of Dubai’s volatile economic climate. “We do not work with multinationals and now that the market is very cautious, the first thing that businesses do is retract like turtles. A bigger agency can sustain itself through the peaks and troughs, but for smaller agencies, they have a more dramatic effect.”
However, another big reason for Finley is an “alarming trend” of false pitches, which he believes are harmful to smaller establishments. “These are unrealistic pitches clients put out to test the water that are not real. Agencies put a lot and time and effort into something that never had legs in the first place. We have to be careful with that.” Nevertheless, Finley stressed Zed’s business was largely still healthy thanks to an account with Nissan Infiniti, but the agency would be shifting its focus to a an industry increasingly focussed on digital capabilities.
However, the apparent demise of digital agency Firefly shows that not even those with those specialisms are immune the changing market conditions. According to Fadi Mroue, founder of independent agency République, part of the problem in Dubai is that the market has simply become saturated by agencies claiming to be digital, but then struggle when it comes providing truly innovative work. “The biggest risk for local digital agencies is the number of new agencies that are flooding the market,” he explains. “You hear of new names opening up every other day. While I applaud some of the work that comes out of the smaller shops, in certain cases their lack of experience drives clients back to the big names.”
“If you’re benchmarking locally, then you have a problem,” he continues. “Digital agencies are not just here to design websites and manage social media accounts; they’re here to change the way we do advertising.
“There needs to be a start-up culture in order to succeed, where we’re using technology to invent and build products for greater good. If you’re another agency doing work on social platforms, yes you will struggle. If you are an agency trying to innovate, yes you will have bigger agencies knocking on your door.”
So what’s the future for independents?
“Tough times are usually when smaller agencies flourish; we are able to adapt to smaller budgets when offering a good service,” says Mroue. “I can’t speak for everyone else, but République has seen steady growth in the past two years, whether in the size of our team or budgets and clients. This is based on a calculated decision for us not to grow too quickly. I think this is where
