'We need an agency that can communicate directly with the region in its own language,' said BBC World Service head of international marketing communications Jane Futrell.
'The BBC has a great history, but work still needs to be done in certain countries. A local agency works better than a foreign agency operating abroad,' she added.
Asda'a initially pitched for a campaign to promote a BBC Arabic radio station, launching in five Middle-Eastern countries next year. But now the PR firm will work on both radio and TV.
The BBC's Arabic TV news channel will launch in 2007 as a direct rival to Al Jazeera.
In the summer, Al Jazeera appointed Brown Lloyd James to promote the English version of its news channel (PRWeek, 22 July).