The UAE‘s KOL Industry Is Brisk but Its Negative Risks Loom Large

Typically, FMCG companies invest their marketing budget in dozens of KOLs. The average number of KOL individuals that UAE brands work with is 79, compared with a global average of 81. The survey found that more than two-thirds of respondents had questioned the authenticity of the number of KOL fans. In 2020, marketing frauds such as false fans will cause the loss of $1.4 billion (9.2 billion yuan) to the brand.

Hakim Abdeljaouad, Director of Duff & Phelps Dubai, said, “The fact that KOL marketing is popular reflects the UAE FMCG companies’ recognition of this marketing approach. The epidemic has accelerated the development of the KOL marketing market, and as the year of 2021 draws near, more and more companies will increase their budgets while actively managing KOL risks.”

“Once there is negative news in the cooperation with KOL, it will create a huge negative impact on the brand which even may exist for a long time,” added Amine Antari, head of Kroll in the Middle East. As a result, the brand needs to conduct a full investigation of the KOL and establish an effective monitoring process to identify potential risks as much as possible. 

In recent years, the UAE government has also issued regulations on KOL. The UAE's National Media Council issued a regulation in 2018, stating that domestic KOL must obtain a professional license and apply for a special media license before it can post advertisements or promote content on social platforms. Users who do not follow the rules will have their accounts closed and be fined up to 5, 000 U.A.E. dirhams.

Earlier this year, Sara Al Madani, an UAE entrepreneur, also told “Arabian Business” that the KOL industry in the Middle East was in a mess due to a lot of marketing and advertising agency activities. She argues that KOL, once a positive term, has been corrupted by commercial interests.

She said: “KOL could have instructed and helped their fans, but now its meaning has been distorted, the present KOL is more like advertising simply for making money.”