The region's advertising market has bounced back after being hit by the Arab Spring, with growth in the industry forecast to reverse a 10 per cent decline seen in 2011.
Arab advertising industry back on track as spending set to exceed $5bn
The advertising market has bounced back after being hit by the Arab Spring, with regional spending in the industry forecast to exceed US$5 billion (Dh18.4bn) this year, say executives.
Double-digit percentage growth is forecast for the Middle East and North Africa's (Mena) advertising market, reversing a decline of 10.3 per cent last year, according to a poll of three major media agencies by The National.
"We're forecasting double-digit growth in the region. There is a sense of a bounce back to pre-revolution levels," said John Antoniades, the regional chief executive of Starcom MediaVest Group, part of the Paris-listed Publicis Groupe.
Total advertising spending across the Mena region was heavily affected during the regional unrest as companies slashed budgets.
According to the Arab Media Outlook, which was published in May by Deloitte and the Dubai Press Club, the Arab Spring contributed to a 10.3 per cent decline in advertising spending last year, when the total market was valued at $4.7 bn.
But a reversal in that trend is expected this year.
Starcom forecasts a 15 per cent increase in the Mena advertising market, while rival agency Mindshare said the market in the Gulf was on track to grow by up to 20 per cent. A third media agency, which did not wish to be named, estimated the rate of growth in Mena this year at 10 per cent.
All three forecasts would result in the advertising market exceeding $5bn this year, based on the Arab Media Outlook's estimate for spending last year.
Hassan Shoker, the exchange director at the media agency Mindshare, said advertising spending is growing faster in the GCC than in North Africa and the Levant.
"I think the GCC will witness an increase of 15 to 20 per cent - but with what is going on in Egypt, there will not be any increase…I don't think lots of brands want to invest with the current situation," he said.
However, other media agencies are more optimistic about the North Africa region.
Starcom predicts a 17 per cent growth in Egypt's advertising market this year, compared with a drop of 15 per cent last year. This is being driven mainly by consumer goods and electronics advertising on television, it said.
The English-language news station CNN, which has a bureau in Abu Dhabi, said the advertising industry had recovered after a decline during the revolutions in Tunisia, Egypt and Libya.
"Advertisers were pulling out as they did not want to be associated with the turmoil as well has coping with cuts in marketing budgets," said Reme Al Saiegh, a vice-president of regional sales at CNN.
"We've seen business coming back across the region with double-digit growth across the Middle East. Egypt has been back since the revolution too and we have seen more and more requests for online advertising … We've seen a tremendous amount of growth in ad spend from tourism boards, ministries, airlines and telecoms in the Middle East."
Many companies are now increasing their budgets for online advertising. Starcom is expecting to double its digital advertising business every year for the next three years. Currently, digital advertisements make up about 15 per cent of its business.
"Traditional methods of advertising still dominate the market, but there is a transformation right now. Technology has changed the way we can engage with consumers and the way consumers want to be engaged," said Mr Antoniades.
Advertisers are also keen to tap into the smartphone advertising space, as mobile penetration soars above 200 per cent in many of the GCC countries.
"Attitudes to mobile advertising are changing very slowly; it is expected to accelerate. There won't be a massive surge of advertising to mobile in the short term," said Mr Antoniades. "This is a missed opportunity."