Dubai: Overall ad spend in the UAE during 2014 took a 1 per cent drop to total $1.61 billion (Dh5.91 billion) as advertisers slammed the brakes on increased exposure during the crucial fourth quarter.
This compares with the $1.62 billion recorded during 2013, based on Pan Arab Research Centre’s (Parc) numbers which are based on official media rate cards. The projections exclude digital ad media spend, which is currently believed to be in the range of Dh80 million to Dh100 million and growing in comfortable double-digit terms.
“There was a dip, certainly, in the final three months of 2014, reflecting the subdued sentiments in some of the key sectors such as retail and hospitality with fewer visitors coming around than in previous years,” said Satish Mayya, Chief Operating Officer at BPG Maxus. “It was brought on by too many negative sentiments swirling around at the time, including concerns over what the lower oil prices would do for the local economy and on consumer confidence. But overall 2014 was still a good year.”
Going by Parc estimates, there was a 12 per cent drop in October spending patterns last year compared with the same period in 2013 — $131 million against $149 million — and a 5 per cent decline in November, $146 million to $154 million. Normal service was restored in December 2014, with spending estimated at $147 million and 10 per cent higher than 2013’s $133 million. But that by itself was not enough to top 2013’s overall tally of $1.62 billion, which was helped immensely by the sustained campaign that Dubai led to win the rights to host the Expo 2020, and particularly during the second half of the year. There was a further spike in December after the city was confirmed as the winner.
Government entities were again the biggest spenders on ads in the UAE, chalking up $325 million, but lower than 2013’s tally of $347 million. The various shopping malls in the country and sundry retail brands came in second, with $211 million and a 13 per cent of the total ad spend. “It was also the year when real estate spending recorded big gains, going up by 33 per cent over 2013 and emerging in the Top 5 sectors in terms of advertising exposure,” said Shaharyar Umar, Marketing Director at Parc. “At one point before 2009, it was the top spending sector.”
Real estate related ads (plus those related to the sector) were worth around $132 million last year and up from $99 million. For the ad industry’s fortunes this year, a lot depends on how well the sector and its players will maintain their exposures in the various media. Or will they prefer to keep a lower profile in keeping with the rather subdued investor sentiments prevailing now?
According to Mayya, “From the fourth quarter dip, there was a fairly sharp upward movement during January as advertisers felt encouraged enough to spend more. A lot of it could have been tied to the traditional spike associated with promotional activity related to the DSF. If that pace is sustained through the first quarter, this could be the making of a moderate to good year for the industry.”
