Industry experts expect the regional media sector to expand this year. But they are split on whether there will be single or double-digit growth in advertising spending. Markets such as Egypt and Saudi Arabia are tipped to lead the way, even though other factors, such as the relative lack of auditing and the immature digital media market, could slow progress.
The National asked five leading industry executives about the state of the media industry in the Mena region, and the outlook for sustained growth this year.
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Q Do you see advertising spending in the Mena region this year growing or declining?
Edward Borgerding, the chief executive of the Abu Dhabi Media Company, which owns and publishes The National
I think we are looking at significant growth in the marketplace - most likely double digit. As the world moves out of the credit crunch and into a growth cycle, advertising will inevitably pick up.
Ali Jaber, the dean of the Mohammed bin Rashid School for Communications at the American University of Dubai
It will be up, but it will not mark a return to the golden days. I think it will be a slow growth - the real estate market has not got out of the decline it sank into.
Alain Khouri, the group chairman and chief executive at the advertising agency Impact BBDO
My view is that you will have probably a 10 per cent increase - it may be a little more. It will depend on the political situation. Multinational companies are really looking at this part of the world as a potential market.
Mazen Hayek, the official spokesman and group director of PR and commercial at MBC Group
This region accounts for less than 1 per cent of total global ad spend. If you compare the size of Mena's population versus global, that would be 4 per cent. And so the ad market could double, triple or quadruple in the future.
Raja Trad, the chief executive at Leo Burnett Mena
I expect there will be some growth, but I am not at all optimistic that it will be double-digit growth. To be very honest, it's not that clear: when you look at figures for 2010, people talk about a 24 per cent growth in advertising spending, but I honestly don't believe that is true.
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Q Is there room in the market for more print publications, TV and radio stations?
Mr Borgerding: I certainly don't see a need for expansion in the TV space … The newspaper and magazine sectors are less saturated, but at the moment I do think they are well served.
Mr Jaber: Some of the plans to launch TV stations have folded, while other are still going ahead. I believe the criteria in launching new stations are not economic - they are political.
Mr Khouri: I think it will be reduced. There are too many titles that are not feasible, and which no one wants to pay for any more. We have more media than we can swallow.
Mr Hayek: Viewers and advertisers are sending a strong signal that the region should not, cannot have more than 50 TV stations. That's simply because the top 50 represent around 90 per cent to 95 per cent [of the] audience and commercial revenue share.
Mr Trad: We have enough. I don't think we have the budgets to spread over all the players in the marketplace … Rather than launching new TV stations and print titles, it's about improving the quality of content.
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Q Several countries in the region are ranked among the lowest in the world in terms of press freedom. Do you see any signs of liberalisation in the local media market, and do the advertisers care?
Mr Borgerding: There is no question the market is getting more liberal. In today's digital world, it is increasingly difficult to manage access to information. As economies and technology continue to mature, the relationship between press and consumers will evolve into more of a dialogue.
Mr Jaber: I don't see any improvement, except if the situation in Tunis enhances media freedom there. With Tunisia opening up it will add a bit of freedom to a region where already freedom is restricted.
Mr Khouri: I don't see major changes this year … I don't think the advertisers bother - today, local freedom has its boundary and you have to live with it.
Mr Hayek: Advertisers will continue to be where the eyeballs and the consumers are. Advertising is the reward for successful media. It's not a benchmark of freedom of speech … It's not an NGO; advertisers are business people.
Mr Trad: Today, it takes the press of a button to read The New York Times or Le Monde or any other media of any nature. If the local media give me restricted, canned news, I will go elsewhere. It's a free, open media platform today.
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Q The majority of media outlets in the region are not audited. What effect do you think this has on the industry?
Mr Borgerding: There are certainly signs pointing in [the] correct direction. In print, for instance, there is a general trend towards the increased auditing of titles. And that's to the benefit of all involved, from the media owners to the marketers.
Mr Jaber: The political elite prevent counting the people in the Arab world because of many political, religious and cultural sensitivities. That's why readership and viewership surveys in the Arab world are doomed.
Mr Khouri: The introduction of "people meters" [a system to measure TV audiences] in the UAE is a good thing because [the figures] will be more precise.
Mr Hayek: Measurability and auditing are of paramount importance. But auditing and TV audience measurement is not a magic stick - it's a necessity, a must-have industry practice. Economic activity is the one that will help grow the advertising market.
Mr Trad: The introduction of people meters will provide minute-by-minute statistics on TV viewing habits in the UAE, which is a must.
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Q When will digital finally come to represent a significant part of the ad market?
Mr Borgerding: There's a tipping point at which the industry recognises that something is viable, and we're already there with online advertising … All media companies are laying the foundations for a digital future. If you're not thinking about it big time today, you're missing the point.
Mr Jaber: Digital has failed to launch over the last two to three years. But I think it will in the next half a decade … It's also a matter of broadband connectivity in the Arab world, which I think will improve, but not at the rate we hope it will.
Mr Khouri: People are starting to put digital media in their media plans … online will probably see a 30 per cent increase, because we're spending very little at the moment.
Mr Hayek: The challenge for all of us in the industry moving forward is to be able to produce original content for specific devices that people can enjoy and watch. And the magic question would be 'would advertisers be willing to pay an extra dollar?'
Mr Trad: Despite the fact that monitoring data is showing that digital does not represent a significant part of the total advertising spend, I strongly believe that it has a growth potential beyond any other media.
