Burnett forecasts digital boom

Leo Burnett, one of the world¿s oldest advertising agencies, is launching operations in three new markets in the Arab world.

Raja Trad, the chief executive of Leo Burnett MENA, says online media is becoming increasingly important for the region's advertising industry. Sarah Dea / The National
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Leo Burnett plans to bolster its presence in the Middle East ahead of a forecast boom in the region's online advertising industry.

The advertising agency, which was formed in the US in 1935, is set to open three offices in the Arab world this year, partly on the back of more brands choosing the internet as a marketing channel.

Raja Trad, the chief executive of Leo Burnett in the Middle East and North Africa, said that online media was becoming increasingly important for the region's US$4 billion (Dh14.69bn) advertising industry. He described the agency's regional expansion plans for this year as "significant". Leo Burnett has launched, or plans to open offices, in Qatar, Oman and Iraq, said Mr Trad.

"At the end of the day, we follow the opportunities," Mr Trad told The National.

"We have just launched an office in Qatar. We are also opening another office in Oman in the coming months." Mr Trad said that the official opening on Leo Burnett's office in Sulaymaniyah, Iraq, will be held on March 13.

Part of this expansion is due to the region's booming online advertising industry, he said. Estimates of the total size of the ad industry - including media such as television and newspapers - vary, but is generally regarded as being between $4bn and $4.5bn a year.

Though Mr Trad said that digital marketing currently accounts for just 4 to 5 per cent of this, he expects a boom in online advertising over the next few years.

"Four to five years down the road, it might reach 30 to 35 per cent of the total ad spend," said Mr Trad.

Other media experts also predict growth in the Arab world's digital industry. According to the Middle East online advertising network ikoo, internet advertising in the Arab world is forecast to hit $250m this year.

Leo Burnett is part of the Paris-listed Publicis Group, which is one of the world's largest advertising groups.

Earlier this year, Publicis said it had acquired the Dubai digital-media agency Flip Media, which will be folded into Leo Burnett Worldwide and will retain its name. Mr Trad said that this acquisition was intended to "strengthen our digital offering." "We went for the biggest digital agency," he said.

"We have been working to achieve [the Flip Media acquisition] for the past year."

However, the executive ruled out any other acquisitions in the digital space in the near future.

Leo Burnett counts Procter & Gamble, GM, du and the Saudi Telecom Company as its key clients.

The company won business from the Qatari telecoms operator Qtel at the end of last year, hence its decision to open what Mr Trad described as a "fully fledged, full-service operation" in Doha.

Leo Burnett also recently won business for Nawras, the Omani telecoms company, which Mr Trad said was a factor in its decision to open an office in Oman.