Dubai: Digital advertising spend in the Middle East is expected to grow at an annual growth rate of 35 per cent by 2015, fuelled by tablets and smartphones.
“Globally, the smartphone sector may generate about $4.9 billion in advertising revenues this year while advertising on tablets may be worth $3.4 billion,” said Paul Lee, Director, Deloitte TMT Knowledge and Research, at an event organised by Dubai Media City to reveal the emerging issue that will impact the telecom, media and technology (TMT) industry in the coming year.
Revenue per unit, however, reveals a different dynamic — smartphone display ad revenues are forecast at $7 per tablet and $0.60 per smartphone (including in-app ads).
“With the splitting of advertising into separate mobile and tablet categories, advertisers should begin to consider new forms of advertising specific to smartphones, such as interactive videos or game functionality, and tablets meanwhile, may borrow content created for PCs as well as usage formerly undertaken on PCs,” Lee said.
He said that in 2014, smartphone advertising should rise between 30- 35 per cent to about $6.5 billion globally while tablet advertising to rise by 50-55 per cent to about $5.2 billion.
In the Middle East, Deloitte predicts that digital ad spend will grow at an annual rate of 35 per cent over the period from 2011 to 2015 reaching approximately 10 per cent of the total advertising spend by 2015. These estimates are conservative when viewed in the context of markets such as the UK, where the shares of the digital platform in total ad spend stood at 32 per cent in 2011.
Lee said the pace of migration towards digital in the region has been relatively slower than other more mature markets given the wide variations in the state of the ICT sector across the region.
“The second major driver for the growth is the population which is below the age of 25, which is more than 50 per cent of the population in the region,” he said.
Advertising agencies in the region claim that the region is taking its first steps in the realm of mobile advertising and as such the separation between smartphone and tablet advertising as seen in more mature markets is still a bit down the road.
Lee urges advertisers to consider new forms of advertising specific to the physical characteristics and typical usage of smartphones. If the banner advertising used on PCs and tablets cannot readily fit a smartphone screen, then new formats “should be tried which aim to harness its positive aspects (such as location information) and which work within its limitations,” he said.