x Abu Dhabi, UAETuesday 25 July 2017

West left standing as Mena region advertising booms

Global advertising giant sees growth in markets such as the Middle East outweighing that in the West.

Growth of advertising revenues in the Mena region is outpacing that in developed markets of the West, says one of the world's top media agencies.

MEC, which plans and buys advertising campaigns on behalf of its clients, is part of the WPP-owned GroupM, which dominates the world's advertising market.

The agency says it expects "double-digit" annualised growth in the region over the next five years, despite the current unrest in the Arab world.

Alongside other markets such as India and China, the Mena region's advertising market is growing faster than established markets in the West, said Charles Courtier, the global chief executive of MEC.

"The fastest-growing part of our business is not in the West," Mr Courtier said. "It's Latin America, it's the Middle East, it's Russia and then Asia - typically China and India. That's where the growth is coming from."

He said the Mena region was "up there with the potential of the high-growth markets".

Elie Khouri, the regional chief executive of Omnicom Media Group, said last month he expected the unrest in the Arab world to wipe out any growth in advertising spending this year.

Mr Courtier said that while the unrest in markets such as Egypt may see a short-term halt in growth, advertising revenues were expected to increase in the long term.

"From a purely commercial point of view, I have to believe that what's going on will show a short-term dip, but a long-term very positive [growth]," he said.

Alastair Aird, the chief operating officer at MEC, said the company expected double-digit growth in the region.

"From a global perspective, 5.5 to 6 per cent of our global revenue is now out of the Mena region," said Mr Aird. "I would still be expecting an annualised double-digit growth over [a] five-year period. It's just a question of how much impact there will be this year."

The total estimated advertising spending in the Mena region is estimated at US$3.5 billion (Dh12.85bn), said Mr Khouri.

Mobile advertising is forecast to see long-term growth, led by markets in the East, said Mr Courtier.

"It's the eastern side of the world that is going to drive mobile globally, because that's where the volume is. But also because that's where the leapfrogging is … they're going straight from no telephone and no internet to all on a mobile handset," he said. "This has massive potential and at the moment there's very little revenue in it.

"As a marketing tool, I think you're going to see the eastern half of the world leading the development of mobile from a marketing perspective globally. The US and Europe is still very wedded to its stuff that is plugged into the wall."

bflanagan@thenational.ae