| Communicating Through the Chaos
The wave of uncertainty unleashed by the global credit crunch has forced businesses in the Middle East to seriously re-evaluate their operational strategies. Across all industries, companies in the region are trying to pinpoint activities that can be either downscaled or dropped altogether without sacrificing viability.
But while it certainly is important for organizations to fine-tune their spending habits to match today’s financial realities, it is also vital that they avoid creating an atmosphere of passiveness or, on the other side of the scale, panic.
PR budgets in the firing line
An unfortunate trend that is being noticed even throughout the economically stable Middle East, is the singling out of marketing, advertising and PR as favourite targets for budget cuts. Companies reason that toning these components down will not make too much of an operational dent as compared to similar initiatives in core business pursuits.
On the contrary, both experience and studies clearly show that organizations that slash marketing budgets with the goal of riding out recessions falter more often than those that have opted to balance spending rationalization across all departments and functions.
A quick peek at global businesses affirms that organizations, especially the more high-profile ones, that have either frozen or drastically reduced their marketing, advertising and PR resources now face numerous unforeseen and even damaging results. Downsizing PR programs in particular compromises the quality of communications between customers and stakeholders. This could unintentionally develop an unwanted perception of secrecy and instability that could prove irreversible in the long term.
Sacrificing sound PR investment in favour of a supposedly bigger bottom line may instead lead companies down a self-fulfilling and vicious cycle: less marketing and PR leads to less new and retained customers, which leads to less revenue, which then induces more budget cuts. Definitely not the kind of situation any enterprise can afford to get into when competition is at an all-time high while consumer confidence is still making tentative gains.
Rapid recovery
The Middle East’s advertising sector was not spared the effects of the downturn, with the property and financial segments in particular most impacted. However, the industry has been quickly rebounding in synch with rapid market corrections being undertaken throughout the region. In fact, despite the crisis, the Middle East’s advertising trade posted an 11 per cent growth in the first quarter of 2009 and could go on to attain a 20 per cent growth by the end of the year.
Mega infrastructure investments such as the Dubai Metro which require major advertising campaigns and a growing trend among Gulf government entities to adopt a private sector mentality to their marketing activities will further sustain the industry’s resurgence.
Given this positive assessment, the growing regional sentiment is that now more than ever is the perfect opportunity to cement global commercial and economic leadership. The business community in the Arab World should not be paralyzed by anxieties and apprehensions and instead adopt and sustain well-planned communications strategies for maintaining and even enhancing their prominent regional and global image.
Image builder, crisis controller
Public relations in particular should be integrated as a key component in any organization’s image-building arsenal. PR ensures healthy relations with investors, government and the community and has the potential to significantly propel overall business performance by encouraging consumer trust, solidifying investor confidence and projecting a favourable brand identity.
PR’s value is especially apparent during times of crisis, as it assures the public, partners and investors that the company is capable of maintaining its composure and acting transparently and responsibly in the face of adversity. Just as countries have acquired the services of the best PR firms to assure their constituents and the world at large that they will prevail against the global economic slump, companies are teaming up with PR professionals to ensure that the right signals are being sent to their clients and partners.
Take the case of the real estate sector, which is right in the middle of the mortgage crisis that triggered the credit crunch in the first place. Over the past year, major property developers in the UAE such as Damac, Omniyat, Nakheel, Emaar Properties and Tameer have independently announced major workforce and budget reductions in response to the economic turmoil. There have also been a lot of talks about the numerous projects that have either been sidetracked or halted as developers and owners rethink the sustainability of their portfolios. Now imagine if these pronouncements were left as is without the assistance of good PR communications.
Our assumption would be that the domestic industry is reeling from the effects of the slumping international money markets and is in pretty bad shape. But there is thankfully a lot of PR communications legwork going about, enlightening all that recessions, even severe ones, are actually a normal cycle from a historical viewpoint; that business rationalization happens on a daily basis regardless of global economic conditions; and that the Arab region is logistically and financially capable of riding out this economic storm.
With PR, regional and international audiences are reminded that the industry players mentioned above also continue to manage the largest mall in the world; the largest tower in the world; the upcoming largest concrete structure and first inner city harbour in the world; and together combine to comprise the world’s fastest-growing real estate market.
This balancing of perspectives transforms the gloom-and-doom into a challenge that is very much controllable and even provides opportunities to the business-savvy. So it is very ironic that several companies still insist on underfunding the activities that have this kind of calming, reassuring and educating effect on market participants.
Strategy shift required
It needs to be noted, though, that PR communications strategies will have to shift from a mass market approach to a niche mentality in order to deliver the right message during these difficult times. Over the coming months we can expect to see less reliance on run-of-the-mill traditional PR tactics, and more emphasis on emerging media and a ‘quality not quantity’ campaign focus. We can already see a lot of PR professionals getting highly creative in boosting the visibility and image of their clients, and tapping into channels which still offer enormous potential such as mobile phones and the internet.
The total value of the Middle East PR industry exceeds the USD 100 million mark, reflecting the region’s appreciation of PR as a cornerstone of corporate strategy and a driving force behind the reputation for excellence. It is therefore amply prepared budget-wise to cross over to a niche approach for its steadily growing and increasingly demanding client base.
Fight, not flight
American writer and quality guru Tom Peters once joked that, in order to turn a big company into a small one, all that one had to do was: “Just wait.” The Middle East has overcome numerous geographic, cultural and political boundaries to take its place as one of the most prosperous regions on earth; it will continue to be so not by waiting, but instead by forging on tirelessly, armed with a little bit of PR and a lot of indomitable spirit.
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