Timing of Ramadan and Arab Spring cited for flat spending in advertising
The impact of the Arab Spring and timing of Ramadan is expected to hit advertising revenue growth this holy month, in what is traditionally the most important time of year for the region's media industry.
"I think Ramadan 2011 looks fairly comparable with Ramadan 2010," said Mazen Hayek, the group director of PR and commercial at the MBC Group. "It's not the kind of exponential growth that one would expect year on year."
Gross advertising spending was forecast at US$2.21 billion (Dh8.11bn) during Ramadan last year, up 66 per cent on 2009, according to figures from the Pan Arab Research Center (Parc). Those figures do not take into account the vast amount of free and discounted advertising, and the true dollar-spending is estimated at about half of Parc's figure.
Television takes the lion's share of advertising during Ramadan - and the Arab world's biggest broadcaster MBC said it expected little growth this year. The fact that Ramadan falls during the school holiday is the main reason behind the flat spending, said Mr Hayek.
"It could have been different in terms of growth had it not been for the summer season," he said. "Economic or retail activity is sometimes slower than what it could have been if Ramadan falls in the 'back to school' period."
Some advertisers are "cautious" in the wake of the Arab Spring, he added. "You have to add to it the overall climate in the region, with a lot of instability that was generated in a lot of key markets in the region," said Mr Hayek.
Unilever, whose brands Lipton, Dove and Sunsilk are among the top-20 spenders on advertising in the region, said it did not foresee much growth in the Arab world's advertising industry this year.
"We're certainly not seeing any significant growth in the market," said David Porter, the media director for the Middle East and North Africa at Unilever.
"I'd be surprised to see the market up during the year as a whole," he added. "When the heat and Ramadan coincide, it can influence a lot of travel plans and spending habits." Media-buying agencies said they did not expect similar exponential growth in spending during Ramadan.
"The GCC is flat versus last year," said Shadi Kandil, the managing director for the UAE at the media agency OMD Middle East.
He said that OMD, which controls a 15-20 per cent of the advertising spending in the Middle East and North Africa region, was not forecasting high growth for the industry as a whole.
"It has been challenging. I think the year will end up flat to a 3-4 per cent increase," said Mr Kandil.
Sami Raffoul, the general manager of Parc, said the advertising industry was unlikely to see the "phenomenal increase" witnessed during Ramadan last year. "You will not see plus 66 per cent, but you are probably going to see plus 15 or 20 per cent," he said. "We do not see a situation where it goes into a negative."
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Published: August 4, 2011 04:00 AM