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Supported by the UAE National Media Council

UAE advertising spend crosses US$1 billion in ’06

posted on 11/02/2007: 2400 views

Advertising expenditure in the UAE last year crossed the US$1 billion mark for the first time to reach US$1.06 billion, up from US$869 million in 2005. Communication and public utilities accounted for the largest percentage of ad spend, according to a study by the Pan Arab Research Centre (Parc).

The UAE tops the GCC and near region for advertising spend with an increase of 22 per cent in the 12 months to December. Saudi Arabia was the second most lucrative market for advertisers, followed by Egypt.

The top three spenders on advertising in the UAE last year were: web portal, Watani-UAE, with an outlay of US$14.6 million; Emaar which spent US$9.2 million; and etisalat with expenditure of US$8.8 million. According to the Parc study, government organisations, insurance and real estate firms together contributed 21 per cent and 16 per cent respectively of total advertising expenditure.

However, advertising spend in the UAE was down in the first quarter of 2006, primarily because of the cancellation of the Dubai Shopping Festival following the death of the late Ruler, Sheikh Maktoum bin Rashid al Maktoum. Advertising picked up in the second half of the year.

Newspapers accounted for a 66 per cent slice of advertising expenditure, accounting for US$701 million, a 33 per cent rise on 2005. Magazines received 16 per cent of advertising revenue or US$175 million, a 17 per cent increase on 2005. Outdoor advertising, including exhibitions and screen displays, rose by 13 per cent over the year to US$47 million, a 5 per cent share of total advertising expenditure.

While print and outdoor advertising rose in 2006, expenditure on television advertising declined by 10 per cent to US$119 million, down from US$132 million in 2005. The most notable drop in advertising on television came from auto manufacturers and the event industry. But real estate firms and government agencies increased their expenditure. Early evening slots in particular became more popular, with a 27 per cent rise in revenue.

Other parts of the day became less popular, such as the early morning slot, which saw revenue falling by 27 per cent.

The report concludes that advertisers are allocating a larger proportion of their budget to press advertising at the expense of television advertisements perhaps because print can better target the home market whereas satellite television addresses the larger pan-Arab audience.

Radio only captured a 1 per cent share of total advertising revenue but registered the highest growth at 41 per cent growth. This is attributed to the emergence of new stations targeting different ethnic groups within Dubai. Cinema advertising fell by 14 per cent. Parc believes this can be attributed to a "lack of attention of planners to a dearth of customised advertising".

Across the GCC, Levant and Egypt, advertising spend was up 24 per cent in 2006 to US$6.7 billion, from US$5.4 billion in 2005. And since 2004, advertising spend in the region has increased 45 per cent. Qatar saw the largest jump in advertising expenditure over 2005-06, seeing an increase of 101 per cent, largely as a result of the hosting of the Asian Games.

Egypt experienced the second highest increase in advertising expenditure, with a 52 per cent leap, up from US$540 million in 2005 to US$819 million in 2006. Oman saw a 32 per cent growth in advertising spend while Jordan's ad spend rose by only 4 per cent, way down from the 44 per cent seen in 2005. As a result of the Israeli-Lebanese conflict ad spend in Lebanon fell by 14 per cent. (Khaleej Times)


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