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MENA Media Report 2019: Saudi Arabia

It’s time to start looking at the kingdom like you’ve never seen it before, writes Moustafa Ismail, CEO of Smaat Co UAE

At a time of global political unrest and economic wars, there is a good chance you have heard the line: “Let us hold our breath and survive this year. Next year will be better. The coming years will be brighter.” The GCC, unlike other parts of the world, is experiencing a heightened sense of optimism. One of the main reasons many people feel this way is the transformation happening in Saudi Arabia. But what is really happening in KSA today? And what is the state of the communication industry in the kingdom?

Surprisingly, most of the HQs and bigger cost centres serving MENA are not based in KSA. Offices are usually small representations in Riyadh and Jeddah that don’t even exceed 10 per cent of the workforce focused on the region. Yet, from a business perspective, we see that more than 65 per cent of revenue across all industries stems out of Saudi, leaving the most lucrative market in MENA with a huge on-ground talent gap. It’s a startling reminder about why our industry is making snail-like progress in coping with all the changes and trends in the Saudi market. So let’s look at four trends shaping Saudi Arabia today.

1. Growth and diversification of the non-oilrevenue stream
Imagine you’re a farmer who only sells apples at $10 per kilo. Then one day, you wake up to realise you also need to sell oranges and other fruits because your apples are now only $3 per kilo. This is what the GCC economies had to undergo in 2015-2016. After the huge dip in oil prices in 2015, the GCC governments’ biggest revenue stream took a major hit. While countries like the UAE were prepared for this day, it’s no secret that Saudi Arabia had no clear plan. Yet they reacted, and reacted swiftly, with the launch of Saudi Vision 2030. Today, the government’s fiscal budget for economic reform in 2019 is to the tune of SAR 1.1 trillion. Non-oil revenues are continuing to grow at a steady rate in KSA, at an average of 20 per cent year on-year since 2016, with a heavy focus on tourism, sports and entertainment.

With more than 15 million annual tourists, mostly pouring in for religious purposes, and very little internal tourism, Saudi is the most fertile breeding ground for this industry. The focus is on keeping tourists longer than their holy pilgrimage and to open up the country for foreign tourism. As part of this vision, visa regulations were softened. Mega projects have also been launched such as NEOM (a city six times the size of Dubai) with a budget of more than $100bn and the Red Sea Resorts project, made up of hundreds of resorts on the coast of Jeddah (phase one will be completed by 2022). The target for tourism is clear: 30 million tourists by 2030. “Let’s head to Riyadh this weekend to watch JAY Z”, or “Let’s watch the final of the Italian Super Cup between Juventus and Milan at King Abdullah Sports City” are comments that were figments of your imagination only a couple of years ago. Not today.

With 60 per cent of the Saudi population under the age of 30, the entertainment and sports industries are carving out huge changes to cater to the youth. The General Entertainment Authority (GEA) is announcing hundreds of events. Big concerts are coming to town. Cinemas are opening their doors while a number of theatres, museums and amusement parks are putting the final touches in place. Stadiums are being built and even a federation for e-sports is being established. This growth has already propelled new opportunities for the communications industry. It is something Saudi will rely on heavily to show the world how rapidly the country is progressing. A magnetic appeal that not only attracts the eyes of investors and tourists but also promises to entertain Saudi youth in the years to come.

2. A sense of Saudi pride
“If you are trying to sell me something, speak to me in my language and my culture.” Another big trend we are seeing in KSA today is a heightened sense of Saudi pride. Everyone wants to participate in re-shaping their country and the government is crystal clear on one point: All Saudis need to work. In the past year, we have seen major developments in the Saudisation laws in both the private and public sectors. It has become pretty straightforward for us in the industry. We need to be present on the ground and have a decent percentage of Saudi workforce to navigate through the kingdom. Easier said than done, of course. Recruiting and retaining talent is never easy, but think about how far the local population in Dubai has progressed since the Emiratisation rules tightened 15 years ago.

Another factor that Saudis are refusing to ignore any more is the way the communications industry speaks to them. Today, most agencies are based in Dubai, Cairo or Beirut, creating ads for Saudis without any insights into their culture or language. The result? An irreparable backlash and negative sentiment on social media. The Saudi consumer wants to be spoken to primarily in Arabic. After all, more than 70 per cent of the user settings on social media in KSA are set to Arabic by the users. They also prefer their own dialect, whether it’s Najdi or Hejazi, and to stay within their cultural norms. If they see Kuwaiti headgear on a man posing as a Saudi, it will be only normal for them to pick on it. The only way to be successful is to have Saudi copywriters, content creators and community managers who understand the culture and can speak and write the Saudi dialect. In a very unexpected turn of events, Saudis need to be hired in our industry not only because this is a direct order from the government but because it is an order from the consumers.

3. Women’s empowerment
Yasmine Al Maimani obtained her Saudi aviation licence in 2014. She was one of five Saudi female pilots. So were Saudi women allowed to fly before they were allowed to drive? The answer is a resounding yes. No one ever doubted the abilities of Saudi women. They were always decision makers and leaders in many ways. The question was how fast could the government change this fabric of culture and society that had been restrained by certain norms for centuries. The media and brands decided only to highlight the “women driving in Saudi” and symbolised this story across thousands of campaigns, social media posts and articles. What the media did not communicate effectively was the 150 or more decisions taken in Saudi in the last year alone that gave more freedom and rights to women in the workplace, political institutions and marriage. Women are finally truly feeling empowered by society and this is creating a strong sense of self-brand and independence. They are no longer just decision makers. They are also earning their own money. This has flung the gates of opportunity wide open for brands and agencies to create solid communication strategies targeting Saudi females.

Today, we are seeing the powerful women of the Kingdom rise to the occasion, and they are just scratching the surface.

4. The rise of opinion leaders
“Yummm, the food here is so tasty you should come and check it out,” said every influencer at some point in KSA today. Does it work? Well, it does if you do it right. One of my F&B clients in KSA doubles up on staff two days before her influencer campaign launches. She sees an approximate 75 per cent increase in restaurant visits after every burst. Makes you think: Why are influencers so effective in KSA? According to Hofstede, a social psychologist who created what is globally known as the Cultural Dimension Study Index, Saudi scored 11 per cent when it came to individualism, meaning the society cares more about society and “we” vs personal goals and “I”. Compare that with Sweden, for example, which scored 80 per cent under the same metric.

Dive deeper and we see that certain societies rely more on what’s around them to take decisions vs individual belief. In the Arab world and in KSA this is definitely true. We still have a culture derived from tribal roots. Family ties are stronger, decisions by friends have a bigger impact and opinion leaders on social media are more effective in this region versus anywhere else.

Today, we are looking at the kingdom like we have never seen it before. The changes and transformation are extraordinary. The opportunities and the level of optimism towards a better future in the Middle East will be very reliant on Saudi Arabia in the coming few years. The speed of the economic reform, the acceptance of society toward more powerful women, the rise of the opinion leaders and the heightened sense of Saudi pride are pushing our industry to change the way we communicate in KSA.

As an industry, we have a unique chance to grab on to some amazing opportunities today. We can either adapt to these changes as fast as the country is driving them or our businesses will miss out on boarding this bullet-speed train.