Advertisers cut back on spending
The UAE was the only country in the Middle East to post a fall in advertising revenues in the first half, figures released yesterday show. The total spending in the UAE, the largest market in the GCC, was US$680 million (Dh2.49 billion), down 4 per cent from $712m in the first half of last year, said the Pan Arab Research Centre (PARC). For the entire region, advertising spending rose 21 per cent.
The property downturn in the Emirates led the sector to cut its advertising spending by one third, according to PARC figures. The country's two advertising big spenders, the telecommunications companies Etisalat and du, drastically cut back, too. Etisalat spent $17.1m on advertising in the first half of last year, compared with just $7.3m this year, according to the figures. The figures apply to so-called rate card estimations and do not reflect discounts and bulk deals offered to advertisers. For this reason, the slide in UAE ad revenues could be even more severe than the 4 per cent, said industry executives.
"When the market is down, discounting prices and deals where you buy one ad and get four free is more common. So [the decline] would be more than 4 per cent," said Avi Bhojani, the group chief executive at BPG Group, the Dubai-based marketing and communications agency. Mr Bhojani said the PARC figures did accurately reflect the overall trend in the industry: the UAE media industry is faring worse compared with last year, while the outlook in the wider region is brighter. But other commentators said the drop may not be as severe as the figures suggest.
Shadi Kandil, the managing director of the media agency OMD in Dubai, said part of pan-Arab advertising spending, which was up 34 per cent, was directed to the UAE market. But this is not reflected in the figures, he said. "You would be unable to single out how much of the pan-Arab spill is directed towards the UAE," Mr Kandil said. PARC's figures track spending in the pan-Arab media as well as in the individual markets of Egypt, the GCC countries, Lebanon, Jordan, Syria and Yemen. Across those markets, advertisers spent about $6bn in the first half, up by more than $1bn from the year earlier. The biggest gains were in Bahrain (where revenues were up 40 per cent), Egypt (36 per cent) and within the pan-Arab media (34 per cent).
Overall, the biggest drop was in the insurance and property sector. Communications and public utilities companies increased their spending by 39 per cent, PARC said. firstname.lastname@example.org
Published: July 11, 2010 04:00 AM