Apr 19 - 2010
Regional adspend advances 22% to $2.74bn in Q1
The first quarter figures for advertising spend in the region have shown double digit growth, with a 22 per cent increase over the previous year, according to a research conducted by Pan Arab Research Centre (Parc). The year 2009 had recorded 11 per cent growth over 2008, revealed the report.
The Arab markets saw advertising spend rise from $2.28 billion (Dh8.4bn) in the first three months 2009 to $2.74bn during the same period this year, said the quarterly report by Parc.
With the exception of the UAE, the report showed resumption of positive growth in all Arab markets.
The UAE, however, saw a slowing decline compared to that of the same period of last year – right after the global financial crisis hit the regional markets. According to the report, the UAE saw a decline of four per cent between January and March 2010. The decline during the same period last year was 14 per cent.
For the first time since 2007, the UAE is not at the top rank for the largest share of media spend in the region. Its share has declined by 4.2 per cent from $356 million in the first quarter of 2009 to $341m in the first quarter of 2010. The UAE’s market share had dropped by four percentage points in 2009 compared to 2008.
Egypt now is the highest spending advertising market with a total of $387m in the first quarter. The UAE has been ranked third while Saudi Arabia was in the second position.
Based on the results of the report, Egypt has seen a growth rate as high as 65 per cent, after suffering from a 10 per cent decline in the same period of 2009.
Other markets that were on the decline during the first quarter of 2009, such as Bahrain, reposted growth of 43 per cent in 2010, that is, from a decrease of nine per cent at the end of March 2009. In addition, Saudi Arabia has increased its growth pace by one per cent, recording three per cent growth this quarter compared to two per cent growth in the same period of 2009.
Similarly Jordan has seen a growth of 18 per cent this quarter compared to 17 per cent in the first quarter of 2009.
Kuwait registered 21 per cent growth, five points lower than its growth rate in the first quarter of 2009.
Lebanon continued to grow at a 24 per cent rate, compared to a substantial 41 per cent growth in the first quarter of 2009.
Qatar grew by 10 per cent, having seen a 42 per cent surge in the same period last year. Oman grew by one per cent, compared to a seven per cent growth in 2009.
Since last year, the advertising agencies in the region have focused their plans on growing in the Levant and in North Africa, recording a 51 per cent increase over 2009.
This has been driven, according to industry experts, by the stabilising political situation in countries such as Lebanon, and growing significance of the Egyptian market, especially for the telecom industry.
In addition, the Egyptian advertising market has been increasingly recognised for creative advertising talent that has reflected in regional awards competitions.
Commenting on that, Eddy Moutran, Chairman and CEO of Memac Ogilvy and Mather Holding, told Emirates Business in an interview that he was assured that all markets in the region were healthy.
“In countries such as Lebanon and Jordan, the political unrest and similar challenges stopped businesses from spending the marketing budgets which they already had. Since politics play an important role in decision making, the stability of those markets gets businesses to spend more, and this is what has been happening.
“Because of that, the Levant is currently seeing a double-digit growth. Meanwhile, the Gulf will also see growth, but in single digits, probably between five and 10 per cent.”
In the UAE, the decline witnessed in the advertising market at the beginning of the crisis seems to have slowed down. According to Parc’s figures, the advertising spend has seen a decrease of four per cent.
The breakdown of the sectors contributing to the advertising markets shows that the continuing decline in the real estate advertising has been compensated by unmatched growth in government spend, service industry and house care and personal care products.
The government ad spend in the UAE has topped the list of sectors contributing to the local advertising market with a growth of 15 per cent and an increasing share of 26 per cent of the total ad spend. During the first quarter of 2009, government had still witnessed a decline of 11 per cent and a share of 23 per cent from the total advertising market.
Meanwhile, the services industry ad spend in the UAE has grown by 50 per cent during the first quarter of 2010, from a recorded decline of 27 per cent in 2009 over the same period of 2008. Toiletries and house care products grew by 40 per cent in the first quarter of 2010, compared to seven per cent decline in 2009 over 2008. While shopping malls maintained a steady growth of eight per cent, their share of ad spend has increased by one per cent from 10 per cent in the beginning of 2009 to 11 per cent in the beginning of 2010.
Aside from the sectors mentioned before and financial services ad spend which has grown by seven per cent, all other sectors in the UAE saw various rates of decline.
Insurance and real estate advertising continued to decline by 40 per cent in the first quarter of 2010, over a 60 per cent decline recorded in the first quarter of 2009. This sector has now retreated from the second place to the fourth place, being overtaken by malls and the entertainment sector.
Entertainment, nevertheless, saw a decline of four per cent compared to 33 per cent growth in the first quarter of 2009. Its share remained stable at eight per cent of the advertising market.
Publishing media saw a decline of 12 per cent in the first quarter of 2010, compared to an impressive 65 per cent boom during the same period of 2009. Communications and public utilities decreased their ad spend by 20 per cent, compared to a soaring 71 per cent growth in Q1 2009. It still maintained a five per cent share of the advertising market.