Business | Media and Marketing

Advertising spending lower in Ramadan due to regional unrest

Figures yet to be released but Arab Spring and economy to blame

  • By Jumana Al TamimiAssociate Editor
  • Published: 00:00 August 18, 2011
  • Gulf News

  • Image Credit: Megan Hirons Mahon/Gulf News
  • A shop in a Dubai mall advertises a sale. Advertising is attractive to companies during Ramadan because of the lifestyles of residents in the region. However, many companies have cut their marketing budgets this year.

Dubai: Spending on advertising during Ramadan has increased in 2011 in the Middle East and North Africa (Mena) countries over the months preceding the fasting month, experts say.

But they also point out that overall spending this Ramadan is expected to be lower than last year due to the political unrest sweeping many parts of the region, coupled with the credit downgrade in the US and the debt crisis in Europe.

"Initial figures coming out indicate that the bad news from the West that has followed the Arab Spring is likely to impact regional Ramadan spending this year," said Shaharyar Umar, marketing director at the Pan Arab Research Centre (PARC).

The reason local advertising revenue will suffer is because three of the biggest spenders here are multinational companies, Procter and Gamble, Unilever and PepsiCo, he told Gulf News.

"Furthermore, this Ramadan coincides with the peak of the holiday period," Umar continued.

According to surveys nearly 4.7 per cent of the population in the Gulf region goes on holiday in August — the peak of the summer break.

According to PARC figures, advertising revenues in 2010 amounted to $13.7 billion (Dh50.3 billion), $2.2 billion of which was generated during Ramadan.

 

Reason for drop

Lower advertising spending during Ramadan would come as a continuation of the downturn in advertising spending in the Middle East in the first six months of the year. Experts blame the drop on the Arab spring and tight advertising budgets.

With the exceptions of the UAE and Saudi Arabia, the majority of countries in the region saw a huge drop in advertising revenue during the year. Saudi Arabia saw a eight per cent increase in ad spending to a total of $643 million, while the UAE ad spend increased marginally to $696 million against $688 million in the first half of 2010, reports state.

Telecom operators, consumer goods brands and government agencies have been the biggest ad spenders in Mena, researchers found.

Top advertising telecommunication companies, include etisalat Egypt, Zain, Mobinil and Mobily.

PARC said the four companies spent almost $200 million during Ramadan last year.

Communication companies spending on advertisement constitute nearly 25 per cent of the total spending during Ramadan.

Other various companies make up the remaining 75 per cent.

Advertising is attractive to companies during Ramadan because of the life-style of residents in the region.

They spend more time at home and shopping as well as spending more time calling families and relatives overseas.

Hence, companies such as etisalat Egypt spend half their existing budget during Ramadan.

Other companies spend up to 33 per cent of their spending budgets during Ramadan.

 

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