Internet advert spending on the rise
Spending on internet advertising in the GCC and Levant is forecast to hit 9 per cent of the total advertising market this year, and is fast approaching the proportions spent in developed markets such as the US and Germany.
Digital advertising has been considered a poor relation to television and newspapers, which remain the dominant media for advertising in the Arab world.
But new research by the agency Omnicom Media Group (OMG) suggests online advertising is set to account for US$170 million (Dh624.43m) this year - or 9 per cent of the total $2 billion advertising market in the GCC and Levant.
That is a greater proportion of online advertising spending than in markets such as India and Belgium, and is close to levels in developed markets such as Germany.
In the US, spending on digital media accounts for 13 per cent of the total advertising market - and the GCC and Levant are fast catching up, according to OMG.
"Digital is taking up a significantly bigger percentage than people think," said Dimitri Metaxas, the regional executive director for digital at OMG in the Mena region.
"In the Middle East [it] is about 9 per cent, which puts us not far off markets like Germany and the US in terms of net share of digital."
The figures, published in a paper entitled "Digital in Mena: Multi-speed sophistication", was likely to "raise a couple of eyebrows", Mr Metaxas said. That is because previous estimates put the levels of digital advertising spending much lower.
Other industry executives disputed OMG's forecasts.
"I don't think it has reached 9 per cent," said Elie Aoun, the managing director for the Mena region at Ipsos MediaCT, which tracks advertising spending in the region. "My estimate is that the spending is not more than 3 to 4 per cent."
Mr Aoun said TV remains the dominant advertising medium in the region, but acknowledged that online advertising was increasing.
"Digital is growing and will grow, but it is still very negligible in this region," said Mr Aoun. "For sure, it is increasing. Three to four years ago, it was only half a per cent or 1 per cent [of the total ad market]."
Mo Elzubeir, the managing director of the media intelligence consultancy Mediastow, based in Dubai, said digital represented an "ultra-thin slice of the overall ad spend".
While he said digital ad spending was growing, he believed it to be slow.
"The trend is gradual increase," said Mr Elzubeir. "You can see industry estimates being bullish on digital, with some estimating an 80 per cent increase this year. I find these estimates to be optimistic."
Digital advertising has proved resilient throughout the recession, said Mr Metaxas. Spending in the GCC and Levant is forecast to hit $170m this year, a 30 per cent increase on last year.
Digital keeps jumping up quite dramatically as a percentage increase year-on-year. And when you actually look at the overall market it has remained relatively flat," said Mr Metaxas.
While the proportion of digital advertising in the region may be comparable with other markets, the total levels of spending remain low.
According to the Arab Media Outlook 2009-13, the region has one of the lowest rates of advertising spending worldwide. In 2009, it was estimated that just $22 per capita was spent on advertising, compared with $462 per capita in North America and $273 in western Europe.
Mr Metaxas said the industry must look to grow the overall levels of advertising spending.
"Per-capita advertising spends in this part of the world are very, very small, which means that the entire market needs to grow dramatically," he said.
"We've done a good job in getting the share of digital up to a pretty healthy level, but the overall market itself needs to grow if we are to get on to any level terms with Europe."
Published: August 21, 2011 04:00 AM