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Surge in retail and real estate sectors fire up UAE’s ad spend

The pick up will hold good during the early months of this year

Image Credit: Virendra Saklani/Gulf News
Shoppers at the Mall of the Emirates. A rise in consumer confidence ensured that DSF got off to a better than expected start.
Gulf News

Dubai: A feel-good factor was clearly at work as the UAE retained its ranking as the top advertising market in the region for 2012 with some ease, with an ad spend totalling $1.58 billion against the $1.44 billion in 2011.

In second spot was Saudi Arabia ($1.42 billion from an 8 per cent growth) and Egypt (which recorded a 17 per cent gain to $1.12 billion despite the tense political situation during the better part of the year), according to data consolidated by Pan Arab Research Centre (Parc). The numbers are based on official media rate cards.

The upturn in consumer sentiments in the UAE — and marketers’ take up on that — was clearly in evidence during the fourth quarter, when combined ad spend totalled $441 million and well above the $397 million in the third quarter and $396 million in the second. Spend in the first quarter of 2012 was the weakest, at an estimated $359 million.

In fact, advertisers splurged the most during October and December with $147 million and $145 million respectively.

While the UAE’s retail sector continued to propel ad budgets, real estate related ads managed to make a strong comeback for the first time in four years during the third and fourth quarters. The pick-up in momentum should settle into the initial months of this year as well, ad industry chiefs said.

“In the UAE, DSF 2013 has got off to a better than expected start and the real estate sector has once again seen the market maker, Emaar, sell off-plan premium hotel apartments in a matter of minutes,” said Avi Bhojani, Group CEO, BPG Group. “Traffic on Shaikh Zayed Road is once again becoming a challenge — such anecdotal factors are adding to consumer, and in turn, corporate confidence in the local economy.

“The smart money is on measured mass media spend increasing in the low teens — 13 to 16 per cent — during 2013.”

Among individual media, newspapers (with $887 million)and magazines ($240 million) continued to pull in the highest ad volumes, with a combined share of 71 per cent, the Parc data reckons. English-language newspapers — which accounted for $499 million of the $887 million — remained the top ad platform in the UAE.

Outdoor media in the UAE had an exceptional year with $220 million and a 14 per cent share of the overall ad spend. Obviously, the momentum in the property market and the unprecedented marketing campaigns put out by tech brands and local retailers as well as the two telecom companies had a lot to do with this. Banks too took to the outdoors to connect their campaigns with prospective clients.

But the sharpest growth will continue to be for digital ad spends. “We estimate a 15-20 per cent increase, especially as even small clients are experimenting with it,” said Tanvir Kanji, head of Inca Tanvir Advt. “When it comes to budget planning, the more established advertisers are marking between 5-10 per cent towards digital. But some of the smaller names are now only on digital.”

While the rest of the region still works on coming to terms with their digital ad space, the UAE is ahead of the curve. “Internet penetration has reached 84 per cent in UAE, comparable to any developed market,” said Shaharyar Umar, analyst at Parc. “And it’s helping online newspaper consumption record a 32 per cent average over the last 30 days of tracking, which would in time force advertisers to allocate (higher) budgets for the medium despite the challenges.”

Leading marketers have been finalising their ad and promotional budgets in recent weeks and the feedback is that these could see an average 10 per cent increase over 2012. But higher budgets need not translate into advertisers loosening their purse strings.

“Advertisers are looking to media which can best reach a target group, whether selective or wide will depend on the objectives of the campaign,” said Kumar Ramamurthy, regional channel strategy director at mec-me, media buying agency. “It is important the media is accountable for the audience and demonstrates a measurable and tangible ROI. Only then the vehicle makes the cut.

“If a vehicle reaches the right audience, in an effective way, at the right cost and demonstrates ROI, it ceases to matter if the plan is selective or not.”