2pure , Advertising __ Monday, March 4, 2013 10:26 AM - Rudolf Jabre

Rudolf Jabre: Online Advertising budgets in the Middle East

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After the world witnessed the sharpest decline ever recorded in 2009 that reached 9, 6 % the advertising market has been slow to recover. This is primarily because the basic economic recovery has been sluggish and irregular, as is normally the case when recessions are caused by financial crisis.


However, you may want to rethink your advertising budget for the coming years. Spending on online advertising in the Middle East is rising. By the end of 2013, online advertising is expected to increase by 4% in the region, Zawya says according to reports from Arab Media Outlook.

If you want to translate that into numbers, spending would reach AED 977 million. Currently about 1% of the overall ad spending goes online.
Regional spending on online advertising is expected to grow by 25-35 percent as a result of the recession, as we witness a greater shift from print to online advertising, according to a study titled “Game Not Over”, that study was recently released by global management consultant firm, Booz & Company.
Why? - Online advertising is cheaper compared to other channels such as television and print and is far more targeted. It offers better investment and a better return
Online advertising spending in the GCC-Levant countries remains below 1 percent of the total globally, according to a recent study by Madar Research
Growth of online advertising is exposed in the Middle East by a shortage of supply of regional products on one hand and that companies head to Google, Yahoo and Facebook for online advertising because of a lack of compelling offerings from the Arab world on another.
ZenithOptimedia predicts global ad expenditure will grow 4.1% in 2013, reaching US$518 billion by the end of the year. As has been the case since the economic downturn began, this growth will be led by developing markets, which we forecast to grow by 8% on average in 2013, while developed markets grow by just 2%, weighed down by the eurozone crisis.


Advertising expenditure by region
Major media (newspapers, magazines, television, radio, cinema, outdoor, internet)
US$ million, current prices. Currency conversion at 2011 average rates.

 

2011

2012

2013

2014

2015

North America

165,086

171,937

177,897

185,779

194,666

           

Western Europe

109,244

106,815

107,066

109,126

111,549

           

Asia/Pacific

132,131

140,151

147,912

156,713

167,410

           

Central & Eastern Europe

26,153

26,716

28,367

30,449

32,858

           

Latin America

35,282

37,991

41,780

45,549

49,835

           

Middle East & North Africa

4,155

4,198

4,313

4,412

4,521

           

Rest of world

9,508

9,505

10,332

11,422

12,848

           

World

481,560

497,312

517,668

543,450

573,686

Source: ZenithOptimedia
Regionally, YouTube data for 2012 indicates that 190 million videos are watched daily in Saudi Arabia alone, with the figure growing to 240 million daily for the MENA region. YouTube EMEA’s Managing Director has also gone on record announcing that he expects video to account for 90 percent of consumed content on the Internet by 2014.


Video offers advertisers the ability of connecting to a wider and more engaged user base. Promotional videos in online advertising offer a unique opportunity to run ads alongside video content and allow advertisers to promote their message to a massive engaged audience


Video advertising offers all the elements of successful advertising that brands seek. Online video gives targeted reach that TV advertisements cannot match, while offering results that are accurately measurable. Video also garners more attention than regular online ads, and are more likely to be watched and remembered by online consumers.


As technology and media consumption habits change from passive television to the consumption of media on demand, enhanced by the growth of high speed connectivity and video-capable smartphones and personal devices, we are seeing video advertising take off in the GCC market. We expect the market to become an even more diverse, interesting and vibrant place as advertisers compete to create interesting ad content and seek partners with the right publishing reach to target consumers.

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