One per cent. As just about anybody in the Middle East's digital media industry how much of the region's advertising spending goes online, and he won't hesitate before delivering this much-repeated number. If he is an optimist, he will say two per cent. The point remains the same: despite all the reports touting the rapid growth of the Middle East's digital sector, despite Yahoo's industry-edifying purchase of Maktoob last year, despite the predictions that the recession's demands would push more people into advertising online, the industry has not managed to put its money where its mouth is.
The most-cited source for this number is Dubai-based
's annual online advertising report. The most recent version, released in the third quarter of last year, tracks all GCC & Levant online adspend for 2008, and found that, yet again, the total comes up actually a bit short of one per cent, according to the report's co-author, Jennifer Aguinaldo.
"There is a very marginal increase [over 2007], but it hasn't yet reached one per cent," she said.
But some corners of the industry aren't taking one for an answer. At last week's MENA Cristal Festival, Dimitrai Metaxas, the regional digital director of Omnicom Media Group, cast doubt on the methodology behind these statistics.
"It's not a fair representation," he said. "We know that there are a lot of price reductions [in the other media] that are pretty big. When you really cut down from the monitored spend data to what's the actual spend, the actual comes to about five per cent. If that's the case, that's an enormous advance."
Ms Aguinaldo said Madar compiles its statistics by asking digital portals and advertising agencies how much digital advertising spending their business witnessed in a given year, meaning it gets something close to actual figures, though even these are hard to come by. "As of now, the advertisers keep the information close to their chests," she said. "They don't really want to talk about how much they are spending online."
It then compared them to figures on other media assembled by the Pan Arab Research Center, which is where the problem comes in, according to Mr Metaxas. PARC's methodology is based on counting the number of ads that appear and multiplying that by the existing rate card -- which is often 30 per cent more than the actual price advertisers pay.
"Everybody know the actual media rates are 30 to 40 per cent lower [than the rate cards], due to discounting," said Zeid Nasser, the founder and editor of MediaME.
Mr Nasser agrees that the overall adspend pie is probably smaller than is commonly reported, while digital's slice is probably bigger.
"It's safe to say this year, 2010, online advertising sill definitely account for more than one per cent of the expenditure of any typical client," he said. "It could be anywhere between one and 15 per cent for some clients, depending on the target audience and depending on how digitally savvy the client and agency are. There is so much hidden spend we don't see."