UAE advertising spend falls 26%

Spending reductions continued to be sharpest in the property and financial sectors, which dropped 75 per cent and 43 per cent.

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ABU DHABI // Advertising spending in the UAE dropped 26 per cent in the first half of this year compared with the same period last year, according to figures released yesterday by the Pan Arab Research Centre (PARC). But the new data suggests that advertising spending declined relatively slowly in the first two quarters of this year, after a sharp drop brought on by the global economic crisis in November. Spending last month was US$116 million (Dh426m), down $2m from May. "The decrease is mainly because the first half of the year in 2008 was a peak time for advertising," said Elie Jichi, a production manager at PARC. "There were so many spots, especially in the property sector. "That's why whatever you have in advertising this year, I don't think it will cover the huge advertising that happened in 2008 from the property sector." The property and financial advertising sectors were particularly badly hit, falling 75 per cent and 43 per cent respectively, during the first half of this year compared with the first two quarters of last year. But weak advertising spending has spread to the household appliances, clothing and jewellery, business equipment, toiletries, cars and government advertising. Worst hit were English-language newspapers, which saw a 39 per cent drop in advertising, compared with a 27 per cent fall in Arabic-language newspapers. Newspapers were especially hurt after advertising in supplements, a favourite of property companies, dropped 84 per cent in the first half of the year, compared with the same period last year. Magazines lost 7 per cent of advertising spending in the same period. Last quarter, the UAE stood out as the Middle East country worst hit by the advertising downturn, with only Egypt and Bahrain also experiencing drops. But the second-quarter results show the pain seems to be spreading, with Saudi Arabia seeing a 5 per cent fall and Oman a 2 per cent drop in the first half of the year, compared with the same period last year. While individual Gulf countries saw their domestic spending fall, however, pan-Arab advertising spending, mainly consisting of ads bought on the region's more than 400 free-to-air satellite television channels, grew 40 per cent in the first half of the year. That made up 43 per cent of total advertising spending in the Middle East, which was a record. Mr Jichi said this jump was mostly a result of the addition of several new stations, such as Fox Movies and Fox Series, to the list of channels monitored by the centre. Strong spending on free-to-air television helped boost the region's overall advertising spending by 11 per cent in the first half of the year, compared with the same period last year. Mr Jichi expects a further boost next quarter, as the drama series broadcast during Ramadan on the major free-to-air channels traditionally accounts for the year's biggest advertising buying spree. "There will be 10 days of Ramadan which will appear in [the third quarter], during August and September, and every time during Ramadan there are heavy campaigns sponsoring programs," he said. "I think the stronger spending will again be in the pan-Arab category, because Ramadan [advertising spending] is very heavy in TV."