Trends and Indicators of the Public Relations and Communication Sector in the Kingdom of Saudi Arabia in

Executive Summary of the Study: January 2018:

An extensive study conducted by W7Worldwide‘s Analytical Research Division revealed new trends and indicators that will reshape the public relations and communications suite in Saudi Arabia during the year (2018).

The study, which was based on a series of different tools to pursue its findings and information, bet on the common goal of bringing the public relations and communications sector out of recession and slowdown from mid-2016 until the end of last year (2017).

The results of the study were based on the time periods specified in the following months:

Results

The Analytical Research Division at W7Worldwide points out that it is impossible to separate the decline in the profits of companies and public relations agencies in the Kingdom from the geopolitical and cognitive factors that affected the sector either directly or indirectly. The most notable indicators are:

The decline in global oil prices led the Saudi government to make more policies to rationalize spending budgets at minimum levels of its various sectors of the government, which had an impact on one of the main income sources for public relations agencies.

The restoration of the legitimate authority in Yemen against the rebel coups through the Arab coalition led by Saudi Arabia, which required large financial resources, directly and indirectly affected many of the government's financial budgets, part of which were directed to various public relations and communications activities.

Public relations and communications agencies are not up to date with the new transformations taking place in the Kingdom and the region as a whole through a progressive window based on "data analysis and procedural steps” to deal with future scenarios in the coming years.

The public relations and communications agencies are not keeping up with the pace concerning the expansion of the classical and new mediums tools in addition to the lack of the latest developments in the sector and not appointing leaders with sufficient professional experience in integrating the two methods.

Global public relations and communications agencies targeting the Saudi audience are threatened by the inevitable exit from the market because they face an escalating crisis: their clients do not believe in the manner of managing their reputation and image of the target audience in Saudi Arabia due to their failure to follow the new professional methods and standards.

Most of the local public relations and communications agencies do not have a stable platform in managing their projects. This means that they lack the latest developments in the public relations and communications sciences and the professional foundations that have taken place in this field in addition to the scarcity of local expertise between academic knowledge and professional experience.

Lack of knowledge of public relations and communications agencies of societal changes in terms of the changing nature of the target audience due to several fundamental reasons. The most important of which is the state of openness experienced by the Saudi society and the entry of Saudi Arabia to a new stage that is drastically different from previous decades.

Especially that the science of public relations and communications is linked to other sciences. The authors of the study notes that the role of public relations companies lies in this particular area. For example, they have the keys and the means to compose, craft or convey targeted messages from their clients to different segments of society. This requires some of the following actions:

Public relations and communications agencies must reconsider their strategies regarding the social, cultural and economical elements that are being restructured when trying to market global and regional brands in various sectors. Global companies are reconsidering their representatives from local agencies in the Saudi market and subjecting them to careful evaluation of their ability to manage their projects in the near future to build the reputation and image of existing and prospective clients in consumer minds.

On this basis, the W7Worldwide Analytical Research Division designed a business model, the A.B.C Model, which aims to help clients achieve a strong and established reputation in the media’s mind through building an effective communications bridge between them and the target audience. The model consists of the following detailed elements:

Methodological Criteria

W7Worldwide Marketing communications adopted a strategic methodology to build its vision of ‘Public Relations and Communications Industry in Saudi Arabia in 2018. Trends, Indicators and Determinants’ relying on study tools and research interviews with

60

representing large, medium and small companies. The participants were as follows

Perhaps the vitality of the study is that it comes within the context of sensitive timing for public relations and communications agencies in the Saudi market during the past year, resulting in a final exit from the market of several agencies specialized in the sector. Some, on the other hand, resorted to drastic measures of austerity and dismissal of employees due to their inability to cope and their intolerance of the new economic changes, and the decline of the government and private sector’s reliance on PR & communications agencies, which, in turn, led to the contraction of financial resources.

Focus Groups and Audience Sampling

Charting the attitudes of the public relations market in the Kingdom in 2018 was among the questions that were asked. The answers were divided onto 6 main courses:

13%

Large and medium enterprises’ reduction of their budgets for public relations and communications services to record levels which led experts to consider that the adoption of these decisions is ill-advised for many reasons, including:

Lack of skill and experience when dealing with the local media.
Its inability to keep pace with the major changes in dealing with new/online and classic media.

27%

Canceling the annual contracts (retainer contracts) with public relations & communications agencies and replacing them with project contracts instead in order to become less costly than the public relations retainer contracts – a decision that needs to be reconsidered and reviewed before it is approved. Failing to do so may put the companies in media or communications crisis that will strain their operating budgets that will negatively reflect on their image and reputation.

45%

Reducing the dependence of the public and private sectors on global companies specialized in public relations and communications given their lack of knowledge of the Saudi market despite the fact that it has been the most influential in the market share during the last period, but the circumstances changed completely with the situation. Some sectors are now moving towards implementing their projects using local SMEs.

The adoption of the various sectors of government in addition to the private sector to in-house resources that carry out the tasks and activities of public relations and identify the roles of public relations and communications companies in the management of events and conferences and large activities that require a professional effort qualitatively.

94.5%

The new economic variables will push for more mergers and affiliations between the small and medium-sized agencies, which will reduce the future pressures on financial resources and focus efforts to meet the coming periods.

9.14%

Small agencies will cease to exist through two tracks:

Change activity to marketing and advertising.
Moving to a nearby Gulf country in the near future that has not introduced VAT yet.

[Optimistic indicators] In the research interviews with CEOs conducted by the W7Worldwide Marketing Communications Team, there was an initial optimistic atmosphere, in which the public relations and communications sector in the Kingdom would benefit directly and indirectly following the issuance of the Saudi monarch in mid-December – a decree to stimulate the private sector with a total of 72 billion riyals, equivalent to 19.2 billion US dollars, to enhance the competition of a number of sectors of the national economy, to develop its products, to improve the business and investment environment and facilitate its implementation in the region and to improve the developmental role of the private sector in the national economy, according to the Vision 2030 of the Kingdom of Saudi Arabia.

There are new trends in the nature of the public relations and communications market in Saudi Arabia, namely the dependence of large and medium-sized companies on the network of freelancers, who expect their shares to rise during the coming periods, especially as they do not cost them any financial or governmental fees.

Technical Recommendations

Based on the results drawn from focus groups and audience sampling, W7Worldwide’s Analytical Research Division has developed a set of recommendations and polices that would help public relations and communications agencies move forward in the next three years:

01

Developing qualitative tools that will help and improve the public relations sector by developing new services that contribute to increasing revenues.

02

Avoid relying on traditional methodologies, media relations and event management.

03

Focusing on activating the course of studies and analytical research, analyzing the content, and reputation of clients in the media’s and consumer’s mind.

04

Restructuring the employees' work to suit the requirements of the new phase.

05

Audit recruitment processes, focusing on those with skills in local content development, as they represent the sector's future platform.

06

Moving towards digital marketing and social media in terms of professionalism and marketing.

07

Building a vision of the nature of potential affiliation and partnership to serve the policy of companies in expanding their business.

08

Using scientific models, such as conducting stakeholder mapping, and tools to understand the target audience and the nature of the market.

09

The interest of global agencies in qualifying and training the young Saudi employees for their knowledge of the target audience and the local market, as well as the prevailing social systems.

10

Local employees need to establish a professional and well-known knowledge, to be able to lead in the future, because their current work is centered on doing normal functions ineffectively.

The new changes in the Saudi social, cultural and consumer economic system in particular have had direct repercussions on the various public relations and communications companies concerned with the Saudi market.

The global public relations and communications companies in the local market have not been able to identify and pin point the changes in the composition of the society and relying on foreign minds as opposed to assigning the tasks to the local professional employees in the sector.

Relying on the global brand without providing appropriate solutions to the consumer
Lack of comprehensive knowledge of the local market
Lack of confidence in local competencies and capabilities that can lead companies in the right direction
Weak localized content
Relying on global theories and strategies applied in other countries that are not suitable for the Saudi market
Considering Saudi Arabia and the other Gulf sates as one entity in terms of the characteristics of the public and the media structure, and this is one of the biggest misunderstandings

The results of the study and the research interviews revealed the suffering of the local public relations companies due to the following reasons:

Lack of qualified national and scientific competencies.
Most leaders of local public relations agencies are non-specialists.
Moderate and long-term strategies and advisory plans.
Weak and unclear operational plans.
Reliance on the structure of traditional family businesses without the expense of experience or skill.

Restrict public relations in media activities and events.
Content development is one of the reasons for its degradation at the local level.
Lack of training and development programs of local employees, will contribute to the immaturity of the sector as a whole.
Not creating new services in the public relations sector will make it harder to attract or retain new clients.

Smaller public relations and communications agencies are at a disadvantage in 2018, which was evident during the research interviews, both for external and subjective reasons, so their exit from the market will be faster for the following reasons:

Lack of know-how to practice sector projects.
Random and unstructured workflow.
Lack of professional experience.
Not reaching maturity.

Identifying the scope of its projects in media relations and news dissemination.
Lack of a five-year institutional development plan.
Absence of job security for cadres is what leads to leakage.
Lack of administrative sructure for the team.

Some may think that freelancers in the public relations and communications sector in the Saudi market are the most fortunate and the least expensive in terms of the new implications and variables, because they are used to the conduct of their work on projects, but the results and research interviews showed otherwise. Most of the freelancers either specialized as consultants or executives (journalists, marketers, opinion writers, media contacts) freelancers in general are required in the coming periods to undertake a series of important actions to ensure that their work is conducted, including

The importance of entering into direct alliances with middle or small agencies to ensure their material rights from the conventions, which are subject to new procedures, this will strengthen their services from being weak to advanced.

The importance of developing their skills in public relations, because it is the weakest link in their professional construction.

Alliances will bring them out of the circle of individual work to the collective, and the employment network of their professional relations of collaborators in the completion of the work assigned to them in an institutional way, will keep them from any legal repercussions.

The Division for Research and Analytical Study:

W7Worldwide is a prominent independent Communications consultancy agency that is driven by the passion to bridge people and make an impact. Our specialty lies in building bridges that sustain relationships and create brand value and awareness through innovative approaches. This is achieved through a thorough understanding of the local market and a global reach allowing us to employ the skills of a local team with years backing up their understanding of the local and international market.

Our extensive work and experience, spread across

13 years working with

100 clients

has given us the proficiency to engage in the industries of government, technology, corporate, healthcare, and consumer products that further expand into subdivisions.

W7Worldwide has a global and local knowledge equation for the Saudi Arabian market to serve its clients in the following areas:

01- Research and Strategies.
02- Manage the Image and Reputation of Individuals and Companies.
03- Public Relations.
04- Social Media.
05- Creativity and Design.
06- Website Development and Technology Solutions.
07- Media Training for C-Suite.

For more information:

Our Official Website:

www.w7worldwide.com

Abdullah Inayat

Co-Founder & Media Relations Director

00966 555 990 258

a.inayat@w7worldwide.com

Abdulrahman Inayat

Co-Founder & Strategic Planning Director

00966 567 201 039

abdulrahman@w7worldwide.com

Trends and Indicators of the Public Relations and Communication Sector in the Kingdom of Saudi Arabia in

Executive Summary of the Study: January 2018:

An extensive study conducted by W7Worldwide's Analytical Research Division revealed new trends and indicators that will reshape the public relations and communications suite in Saudi Arabia during the year (2018).

The results of the study were based on the time periods specified in the following months:

Results

The decline in global oil prices led the Saudi government to make more policies to rationalize spending budgets at minimum levels of its various sectors of the government, which had an impact on one of the main income sources for public relations agencies.
The restoration of the legitimate authority in Yemen against the rebel coups through the Arab coalition led by Saudi Arabia, which required large financial resources, directly and indirectly affected many of the government's financial budgets, part of which were directed to various public relations and communications activities.
Public relations and communications agencies are not up to date with the new transformations taking place in the Kingdom and the region as a whole through a progressive window based on "data analysis and procedural steps” to deal with future scenarios in the coming years.
The public relations and communications agencies are not keeping up with the pace concerning the expansion of the classical and new mediums tools in addition to the lack of the latest developments in the sector and not appointing leaders with sufficient professional experience in integrating the two methods.
Global public relations and communications agencies targeting the Saudi audience are threatened by the inevitable exit from the market because they face an escalating crisis: their clients do not believe in the manner of managing their reputation and image of the target audience in Saudi Arabia due to their failure to follow the new professional methods and standards.
Most of the local public relations and communications agencies do not have a stable platform in managing their projects. This means that they lack the latest developments in the public relations and communications sciences and the professional foundations that have taken place in this field in addition to the scarcity of local expertise between academic knowledge and professional experience.
Lack of knowledge of public relations and communications agencies of societal changes in terms of the changing nature of the target audience due to several fundamental reasons. The most important of which is the state of openness experienced by the Saudi society and the entry of Saudi Arabia to a new stage that is drastically different from previous decades.
Especially that the science of public relations and communications is linked to other sciences. The authors of the study notes that the role of public relations companies lies in this particular area. For example, they have the keys and the means to compose, craft or convey targeted messages from their clients to different segments of society. This requires some of the following actions:

Global companies are reconsidering their representatives from local agencies in the Saudi market and subjecting them to careful evaluation of their ability to manage their projects in the near future to build the reputation and image of existing and prospective clients in consumer minds.

Methodological Criteria

representing large, medium and small companies. The participants were as follows:

Focus Groups and Audience Sampling

Charting the attitudes of the public relations market in the Kingdom in 2018 was among the questions that were asked. The answers were divided onto 6 main courses:

13%

Lack of skill and experience when dealing with the local media.
Its inability to keep pace with the major changes in dealing with new/online and classic media.

27%

45%

9%

94.5%

9.14%

Small agencies will cease to exist through two tracks:

Change activity to marketing and advertising.
Moving to a nearby Gulf country in the near future that has not introduced VAT yet.

Technical Recommendations

Based on the results drawn from focus groups and audience sampling, W7Worldwide's Analytical Research Division has developed a set of recommendations and polices that would help public relations and communications agencies move forward in the next three years:

01

Developing qualitative tools that will help and improve the public relations sector by developing new services that contribute to increasing revenues.

02

Avoid relying on traditional methodologies, media relations and event management.

03

Focusing on activating the course of studies and analytical research, analyzing the content, and reputation of clients in the media’s and consumer’s mind.

04

Restructuring the employees' work to suit the requirements of the new phase.

05

Audit recruitment processes, focusing on those with skills in local content development, as they represent the sector's future platform.

06

Moving towards digital marketing and social media in terms of professionalism and marketing.

07

Building a vision of the nature of potential affiliation and partnership to serve the policy of companies in expanding their business.

08

Using scientific models, such as conducting stakeholder mapping, and tools to understand the target audience and the nature of the market.

09

The interest of global agencies in qualifying and training the young Saudi employees for their knowledge of the target audience and the local market, as well as the prevailing social systems.

10

Local employees need to establish a professional and well-known knowledge, to be able to lead in the future, because their current work is centered on doing normal functions ineffectively.

The results of the study and the research interviews revealed the suffering of the local public relations companies due to the following reasons:

The importance of developing their skills in public relations, because it is the weakest link in their professional construction.

The Division for Research and Analytical Study:

Our extensive work and experience, spread across

13 years working with

100 clients

has given us the proficiency to engage in the industries of government, technology, corporate, healthcare, and consumer products that further expand into subdivisions.

W7Worldwide has a global and local knowledge equation for the Saudi Arabian market to serve its clients in the following areas:

01- Research and Strategies.
02- Manage the Image and Reputation of Individuals and Companies.
03- Public Relations.
04- Social Media.
05- Creativity and Design.
06- Website Development and Technology Solutions.
07- Media Training for C-Suite.

For more information:

Our Official Website:

www.w7worldwide.com

Abdullah Inayat

Co-Founder & Media Relations Director

00966 555 990 258

a.inayat@w7worldwide.com

Abdulrahman Inayat

Co-Founder & Strategic Planning Director

00966 567 201 039

abdulrahman@w7worldwide.com