- Image Credit: Pankaj Sharma/Gulf News
- Despite the flat growth rate, the UAE remained the top regional market for ad spend in the first six months on 2011.
Dubai: With the exception of Saudi Arabia and to a lesser extent the UAE, the combination of the Arab Spring, struggling regional economies and tight advertiser budgets have put the brakes on advertising spend in the first six months of the year.
According to data from Pan Arab Research Centre (Parc), advertisers spent $5.2 billion (Dh19.08 billion) during this period against the $5.08 billion last year. (The data is based on the official media rate cards for ad placements.)
It could have been worse had not Saudi Arabia come through with an 8 per cent increase in ad spending to total $643 million. Another saving grace was provided by the UAE, which just about managed to hold its own by creating $696 million worth of advertising opportunities against the $688 million in the first-half of 2010.
Despite the flat growth rate, the UAE remained the top regional market for ad spend in the first six months. Egypt — which held the top position in 2010, was hit by a 50 per cent drop in spending to total $355 million, according to the Parc data.
"As far as growth markets are concerned, the government of Saudi Arabia is opening its markets and has ambitious growth plans having invested approximately $900 billion in developing its social and economic structures," said Michael Nederlof, CEO of Aegis Media Mena, the marketing communications group which operates the Carat and Isobar media agencies.
Favourable trajectory
Across the board, advertisers are confident that advertising spend will continue its favourable trajectory in Saudi Arabia during the second-half as well. Of immediate interest is the expected Eid related spike in spending during late August and early September.
The same is what advertisers and agencies are looking for in the UAE as well. "Yes, the expected pick up in ad spending did not happen during the first-half; this was mainly due to the Arab Spring," said Satish Mayya, Chief Operating Officer of BPG Maxus, the media buying firm.
"But considering the positive reports on visitor influx into Dubai and the UAE, retail spend will go up during Eid and towards the last quarter."
It was not just Egypt that recorded a precipitous drop; in Bahrain spending was down 22 per cent to $52 million, Jordan's was $56 million after seeing a 19 per cent decline, and Kuwait's was lower by 3 per cent to $451 million.
But, there's still hope yet. Egypt, despite recent demonstrations on the streets, is putting together campaigns that would win back its favoured status among regional and overseas tourists.
"Oil and tourism, the two key components of the regional economy, are strong," said Shaharyar Umar, marketing director at Parc.
"Hence, the region is likely to overcome these hurdles even as early as by the second-half of the year."
Nederlof provides a perspective for the grudging sense of optimism. "Unlike any other continent there is a huge Pan-Arab media industry that allows advertisers to cross borders with ease," he said.
"This has meant an influx of brands coming into the region, especially from countries such as Turkey that have cultural similarities.
"It also means that there is not one dominant sector, and whilst public utilities and government media spend top the list, the recession forced a correction and allowed FMCG (fast moving consumer goods), financial, retail and telecom brands to enter the market and advertise with more prominence and in places that were previously beyond budget.
"Speaking specifically about the UAE, you only need drive down Shaikh Zayed Road to see the multiple banks, retailers, FMCG and luxury brands on show." That, as advertisers and agencies will tell you, is a good a place to start a full-fledged revival.
Biggest spenders
Telecom operators, consumer goods brands and government agencies led the way in ad spending across the region during the first six months of the year.
However, government agencies spent 12 per cent less than what they did last year, according to Parc data.
Spending in the food sector was up 16 per cent during the first-half of 2011, as competing brands tried to cajole consumers to buy against the backdrop of higher prices for food essentials.
The retail sector had a lot if play with malls and individual storing combining to push their combined spending up by 10 per cent, according to Parc.
Among individual advertisers, the Top Three positions were taken by the multinational giants P&G, Unilever and Pepsico.
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