The media industry of the Arab world was among the hardest hit worldwide by last year's downturn, but it is expected to bounce back this year, a new study says.
Hard-hit advertising tipped to rebound
The media industry of the Arab world was among the hardest hit worldwide by last year's downturn, but it is expected to bounce back this year, a new study says. Advertising spending dropped 13 per cent across the MENA region last year from its level in the boom times of 2008 but is set to increase at an annual rate of 8 per cent each year until 2013, according to the Arab Media Outlook, a report produced by Dubai Press Club and Value Partners, a consultancy based in Milan.
Until the crisis, advertising spending in the Arab region was among the fastest growing in the world with annual growth of more than 30 per cent from 2007. Last year's contraction was second only to that seen in central and eastern Europe, where advertising spending fell by 21 per cent. "There is a very positive consensus across all the industry players we interviewed that 2010 is expected to be a positive year, or at least neutral in terms of expectations," said Santino Saguto, the managing director for Value Partners in the MENA region.
Advertising spending in the region is expected to hit US$5.1 billion (Dh18.73bn) this year, up from last year's $4.6bn, but short of the $5.2bn spent in 2008. Projections put regional advertising spending at $5.6bn next year. Media professionals surveyed for the report were optimistic about the region's ability to bounce back, with 60 per cent saying they felt positive about the industry's prospects this year.
"The industry here has a lot more potential here, in terms of growth opportunities, than the rest of the world," Mr Saguto said. In addition to growing internet advertising revenues, TV revenues are expected to substantially increase, driven by pan-Arab satellite spending. Half of the consumers surveyed said they were now watching more television because of the economic downturn. Print revenues, which were especially hard hit in the financial crisis, are expected to rebound from last year's $3.6bn to nearly $4bn this year.
Despite this growth, advertising spending per capita in the Arab world will still be a fraction of that in more developed markets. Advertisers in North America spent $462 for every person in that region last year; in the Arab world, they spent $22, the report said. @Email:email@example.com