Rise of Web gives a boost to advertising in Arab world

Internet advertising in the Arab world is coming of age, with total spending set to hit $250 million next year, up by more than 50 per cent on 2011.

Isam Bayazidi says the UAE spends the most in the region on internet advertising. Jeffrey E Biteng / The National
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Internet advertising in the Arab world is forecast to hit US$250 million (Dh918.2m), thanks to the rapid rise in consumers using the Web.

Total spending in the region is set to reach at least $160m this year, and experts predict a rise of 55 to 60 per cent next year.

Isam Bayazidi, the chief executive of the Middle East online advertising network ikoo, said spending on internet advertising was even increasing in troubled markets such as Egypt.

"Initially we were a bit worried about the effect of the Arab Spring on advertising," Mr Bayazidi said. "But online advertising has been growing healthily."

Across all media including television and radio, the Arab advertising market is estimated at $4bn to $5bn, one of the lowest per-capita levels in the world.

That means that internet advertising accounts for just a tiny fraction of overall budgets.

In the UAE, growth in internet advertising for next year is forecast to be lower than in the region overall at about 25 per cent, because of the market here being "more mature", so other Arab countries have more room to grow.

"The UAE is still by far the largest in terms of spend," said Mr Bayazidi.

Ikoo is owned by Jabbar Internet Group which comprises some of the remaining assets of the former Maktoob, following the acquisition of the main Maktoob portal by Yahoo in 2009.

It provides advertising on about 120 websites, and claims to attract almost 35 million unique visitors each month.

Mr Bayazidi's forecast that advertising spending will hit $160m this year is more conservative than those of other commentators.

Ari Kesisoglu, Google's regional manager for the Middle East and North Africa (Mena), predicts that total spending on digital advertising in the region will hit $175m this year.

"The growth is not slowing down. The users grow, the businesses come online, and thus the online advertising market grows," Mr Kesisoglu said.

He added that this was because of the increasing number of internet users in the region. "I think Mena is at the tipping point of the internet adoption, and of internet usage," Mr Kesisoglu said.

"You look at the last five years, and the number of users are growing on average by 40 per cent year-on-year. This year, depending on what external resource you look at, we have roughly 85 million people online in 2011 [compared with] 5 million in 2000. And there is no sign of this growth slowing down."