Days after Nielsen’s GlobalAdView Pulse reported Middle East to be the highest growth region in the US$503 billion global ad industry in 2010, the political upheavals in certain parts have left the regional markets reeling under pressure with a 1% decline in measured ad spending in the first quarter of the year.
The regional ad spending was integrated with Nielsen’s global advertising data with the help of Pan Arab Research Center (Parc) for the first time in 2010 owing to high interest amongst global advertisers. Middle East was the focus of FMCG, as growth reported by the sector was highest in the region at 34.3% as compared to 14.6% increase observed globally in 2010.
UAE advertising market is back to black as the first quarter showed a positive growth of 3% amidst cautious optimism from advertisers. UAE is now ranked as top spending market in the region for the first quarter.
The ever buoyant regional ad spend market came to standstill in the first quarter with a 1% decline as Egypt spending plummeted by half (-51%). Bahrain and Jordan were also down by 21% each during the first quarter of 2011 as compared to same period last year. Egypt and Pan-Arab Media were the standout performers in the advertising market for the region during 2010. The total regional spends during the first quarter of 2011 is US$2.68 billion.
Spending on Pan Arab Media eventually slowed down to single digit as it witnessed only 7% growth this quarter as compared to 42% growth observed in the media in 2010. However measured spending in Saudi Arabia accelerated to 11% during Q1 2011.Other markets variations during the same period are Kuwait[+1%], Qatar[+7%], Lebanon[+7%] and Oman [+14%].
Spending on Television medium that contributes 55% of the total measured regional spend was flat at US$1.4 billion. However, spending on Newspaper continues to fall unabatedly taking its share to 32% as spending was down by 5% during the period. Magazine with 7% share was up by 6% during the same period.
The region is witnessing a web boom as per latest TGI surveys conducted by Parc e.g. the internet penetration in Saudi Arabia now stands at around 56%, in UAE the internet penetration is 73%. With the growing usage some advertisers are also likely to test the waters in the growing medium. As the medium has various bottlenecks attached, it is unlikely to make any dent as of now in the spending of major monitored media.
The top 3 regional advertisers in the first quarter of the year are P&G, Unilever and Pepsico according to their order of spending. The top 3 brands in order of their spending for the same period are Zain, Head & Shoulders and Pepsi.
The fundamentals of the region remain strong even though a few markets struggled aftermath of global economic crisis of 2009. Egypt, a key advertising market is emerging stronger after the unrest. Oil and Tourism, two key components of economy in the region, are going strong. Hence, the resilient region that was initially affected by economic crisis followed by unrest in certain parts is likely to overcome these hurdles even as early as by second half of the year. The surging global advertisers spending in the region further substantiates the high potential of the region. Positively, the region is going to witness a double digit growth in second half of the year.
Spend is calculated in the published rate card and do not account for incentives or discounts that advertisers may avail from media owners.
Provided by: M Shaharyar Umar
Pan Arab Research Center
The views expressed in the article are those of author and not necessarily those of PARC.