The cost of uncertainty

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If you were living under a rock and only received your news from LinkedIn, you would be forgiven for thinking nothing was amiss. Agency chief executives continue to celebrate award wins and top-agency rankings, while the realities of delayed work, lost revenue, and redundancies are conveniently brushed under the proverbial carpet. It is almost Orwellian in its insistence on projecting success, regardless of the reality on the ground.

And yet, as everybody knows, agencies, especially independents, are suffering, and that suffering is universal. From creative and production to public relations, events, and experiential, there is a real sense of crisis, although, as with the article on the wider implications of the US-Israeli war on Iran, very few agencies were willing to comment. And while no industry-wide figures are available, every agency interviewed for this article reported project delays, reduced spending, or cancelled work. Sometimes all simultaneously.   

For larger networks such as M&C Saatchi, the disruption has been significant but ultimately manageable. According to Scott Feasey, M&C Saatchi’s chief executive for Europe and the Middle East, the initial impact was one of confusion and uncertainty. Some clients continued largely as normal, especially the agency’s government and semi-government clients, but roughly 50 per cent paused decision-making, delayed campaign launches, and reassessed budgets while monitoring developments and the potential impact on communications and sales. The areas hardest hit were film and content production, as well as live events. The agency’s sport and entertainment division, for example, saw a number of events postponed or cancelled, although in most cases the work was delayed rather than lost altogether.

For safety reasons, the ability to work remotely was increased and a flexible ‘work from anywhere’ initiative introduced for employees who wished to spend time out of the region. The agency was also able to maintain business continuity by drawing on talent and resources from across its international network, while shifting capacity between the Middle East and Europe to respond to changing demand. This enabled Feasey to redirect and relocate resources to offset declining revenue in the Middle East while reducing additional costs in Europe.

“Fortunately, due to some clever pivoting and a determination to support our regional governments, we did not implement agency salary reductions, redundancies, compulsory leave, or reduced working weeks,” he says. “Our focus was on maintaining business continuity, supporting our teams, and staying close to our clients. We did, however, scale back freelancers and new hires, restructure two departments sooner than planned, and teams were asked to take their annual leave during the conflict rather than later in the year, when there would be a bounce-back and a more compressed economy.”

The contrast with other, smaller agencies is stark. The creative experience agency LightBlue, which relies heavily on experiential work, has been hit hard by the cancellation or postponement of events. For almost 70 days, there were virtually no live experiences to speak of. Aside from a small activation at Art Dubai, activity ground to a halt, with the agency continuing to pitch and plan projects, the majority of which will not take place until after the summer. In response, the agency doubled down on the creative strategy side of its business. “The lesson is breadth, and Covid taught us that,” says David Balfour, LightBlue’s co-founder. “If live is your only offer, you are completely exposed the second live stops. The agencies coming through strongest are the ones with a brain attached to the build.”

For many public relations agencies, it has been arguably worse. During the reporting of this article, dozens of employees were made redundant at Burson, with senior management citing regional economic pressures and growing client hesitation around contract renewals. The regional fallout from the US-Israeli attack on Iran created a communications dilemma for brands. Do they continue to communicate when the atmosphere is tense and fragile? Or do they opt for silence? Many chose the latter, leading to paused communications and cancelled events as they grappled with questions of safety, optics, and appropriate brand behaviour.

“The initial impact was felt almost instantly, and it was unlike anything we’d experienced since Covid,” says Natasha Hatherall, founder and chief executive of TishTash Group. “I don’t even like to compare it to Covid if I’m being honest, as it is very different and far worse in my view.  When regional tensions escalated, we went from business as usual on a Friday to working 20-hour days through the weekend. I was on calls with clients from Saturday, advising across everything from upcoming events in the week ahead to social media content, PR messaging, and crisis communications. That first Monday back felt surreal. Clients were pausing, questioning, pulling back—not necessarily cancelling everything outright at that time, but definitely hesitating, and events started being delayed and pushed back week by week. There was a collective holding of breath across the industry.”

The atmosphere at TishTash was one of shock and anxiety. With over 70 staff in the UAE and about 80 per cent of its clients based in the region, the exposure was significant. Within two weeks, it had lost nearly 70 per cent of its client revenue through paused and cancelled contracts. From the outset, the agency shifted to fully remote working, which remained in place for the first six weeks, until the text alerts had stopped and schools had resumed. With a third of TishTash’s workforce made up of working mothers, the decision to bring the school holidays forward added another layer of complexity. Several team members also chose to work temporarily from outside the UAE under the agency’s existing ‘work from anywhere’ policy.

“What we did do was over-communicate,” explains Hatherall. “We increased online meetings, built in more regular check-ins across teams, and created genuine space for people to speak openly about how they were feeling, not just professionally but personally. I told the team explicitly: if you’re struggling to focus, if anxiety is getting in the way, that’s okay. Say it. We’ll figure it out together. Someone in the team will step in and cover if you need some time out. This was something most of us had never experienced and it affected us all in so many different ways. We applied this same logic to our clients and our relationships with them too, providing very regular and transparent updates of what we were seeing in the marketplace.”

While some in-person work remained necessary, including photoshoots, interviews, and client meetings, responsibilities were assigned according to individual comfort levels, with no employee pressured to take on tasks they were uncomfortable with, including travelling across the city. However, as cancellations mounted and a number of brands redirected budgets away from the region, it became clear that a more formal restructuring of the business was unavoidable. This included redundancies across all divisions of the business and blanket salary reductions agreed with the team. “Over the course of the last 14 weeks, we have had to reduce our team by approximately 35 per cent,” admits Hatherall. “In addition, we have had a number of the team who have chosen to leave the UAE and return to their home countries.” 

“It has honestly been a very tough time, especially as a 100 per cent self-funded business and one that relies heavily on events and activations for its clients. We’ve experienced loss on many different levels, including the reduction of our team and the size of our business. We also recently lost our dream office. Three weeks into the war, we received a renewal notice for our office - a purpose-fit-out office including studios and a lot of space for events and creative work- which included a 20 per cent rent increase. Faced with vastly reduced revenue, coupled with the rent increase, we took the hard decision and gave notice on our office and took the opportunity to reduce costs and downsize.”  

TishTash is far from alone. Although the repercussions have been less severe, at Shakespeare Communications, a third of the agency’s business was lost overnight. So far, only one freelancer has been given a month’s notice, although there are plans to bring them back, and the hours of an administrative team member may be temporarily reduced over the summer. Despite the challenges, the five-person team remains intact, with Ananda Shakespeare, the agency’s founder and chief executive, thankful that the agency’s lean structure provided the agility needed to protect client relationships and adapt to changing market conditions.

“What was tough was the lack of notice from those clients who left us, and an unwillingness to negotiate different terms or notice periods,” says Shakespeare, who also runs a non-profit group for the media community in Dubai. “Contracts out for signature were lost, with prospective clients citing the situation as the reason why they felt the timing wasn’t right for a new PR contract. We also lost some of our client contract renewals for the same reason. Payments from other clients have been delayed. Furthermore, there are less business leads.” 

While most agencies are hoping for a stronger fourth quarter, prospective clients continue to delay events and marketing spend until there is greater clarity, says Shakespeare. Although some sectors, such as legal services, have remained relatively resilient, business development remains slow, and agencies with more geographically diversified client portfolios appear to be faring better. Yet uncertainty remains the defining factor. “The truth is, the conflict could rumble on indefinitely. This could be the new normal for a while.”

Uncertainty remains the defining challenge. Many campaigns and events have been pushed to post-September, some even to 2027, while job cuts and salary reductions have hit both agencies and clients, although few are willing to discuss them publicly. As Big Kahuna Film’s Eddy Rizk says elsewhere in this issue, if the situation continues beyond the summer, there will be serious problems.

Most do, however, agree that the situation has improved to a degree and that confidence has returned. It’s the extent of that recovery that people disagree on. According to Feasey, clients have resumed longer-term planning, delayed projects have largely restarted, and postponed events have begun returning to the market. “From a GCC perspective, I believe this will be viewed as a temporary ‘speed bump’ rather than a defining long-term setback,” he says, arguing that the region has repeatedly demonstrated an ability to recover quickly from periods of disruption. 

Hatherall is more cautious. Although she believes the UAE will bounce back, the reality is that it will take time. Only a definitive end to the war will allow a full recovery to begin, she says. Until then, “we are currently in a strange holding pattern”. 

“For so many years, I’d been chasing growth, expanding our services and offerings, opening new markets, scaling, and working toward an end exit goal,” she says. “Now, recovery for me isn’t about revenue recovery and getting back to where we were. It’s about rebuilding and re-focusing in the right way, and in a way that feels right to me as a founder and business owner. I’m not interested in chasing growth anymore. My plan is to tighten the agency into a smaller, medium-sized agency, rather than the large one it was. To focus on getting back to profitability and doing the work we love and are brilliant at.”