Dubai: The benefits from all the recent property launches and off-plan sales in Dubai have not been confined to the real estate sector. The spike in activity has rubbed off on the fortunes of the local ad industry.
Real estate specific advertising was up 42 per cent in value terms in the first seven months from a year ago, and ad agencies and media buyers will have every reason to hope this continues awhile. It certainly should be the case in September, with Cityscape 2017 set to usher in a fresh round of launches. And, just as certainly, there will be ads showing off the new properties.
Across the board, ad spend in the first seven months is down by 8 per cent from a year ago.
Real estate is but one of a handful of sectors to see some spending gains, according to the latest update from BPG Maxus, the media buying house, in the January to July period. Government agencies piled in with a 32 per cent higher spend. But the spending spikes from the other sectors were way below 10 per cent.
Supermarkets chipped in with a 4 per cent increase, while smartphones and tech helped out with 8 per cent plus. Think of all the outsized billboards of Samsung’s S8 — launched in April — and of the current iPhone version along Shaikh Zayed Road.
The banking sector was the other one to pitch in, with 6 per cent higher spend over comparable 2016 numbers. Closer to July, there was also a fair bit of tactical ad campaigns, as advertisers tried to cash in on the pre-holiday and pre-travel spending by residents here.
“Across the board, marketing budgets have not reduced drastically in real terms, but those commitments are becoming prudent and into channels that can be measured and show actual returns,” said Satish Mayya, CEO of BPG Maxus. “But tracking of content integration or product promotions are still not being monitored.”
But some key categories critical to the local economy are yet to hit their strides and this is showing up in their ad spend too. That is the case with the automotive sector, passing through one of its toughest years over the last decade. The sector has recorded 32 per cent less on ad spending, and instead padding up their incentives offered within the showrooms.
“In recent months, there’s little of model-specific above-the-line advertising,” said a marketing person for a car dealership. “Instead, it is all about specific promotions and the benefits these can offer buyers now. Buyers are turning extremely price sensitive and this is showing up in the ads as well. The ads that talk up specific models are mostly being utilised in the digital media.”
But, according to Mayya, there is one location in Dubai where auto advertising still reigns supreme. “One of the biggest stretches for dealerships is along SZR (Shaikh Zayed Road), which makes it ideal for proximity targeting via outdoor media,” he said.
Of the other categories that scaled down spending, restaurants did so by 20 per cent. That is surprising as the local F&B industry has by and large been impervious to lower consumer spending. In recent quarters, new F&B outlets and locations have been opening and feeding into a highly receptive consumer base.
The other sector to cut down was the gold and jewellery sector, where — as with car dealerships — retailers were more intent on in-store promotions. The increase in gold prices is forcing shoppers into less frequent purchases and jewellery retailers are adjusting their ad campaigns accordingly.
On the plus side, the regional situation involving Qatar hasn’t had much of an impact on the ad industry, said Mayya, and “only (led to) reallocation in most cases”.
“For the second-half of the year, real estate should continue to lead the momentum and will cascade into entertainment, leisure activities, F&B, etc. Official figures have shown a 10 per cent year-on-year increase in visitors to Dubai. These will be the positives to look forward to.”
Digital advertising gets back into the limelight
* After a less than stellar run in recent times, the first six months saw a slight return to form for digital ads. Overall spending on digital and social media was up 4 per cent during the period, according to BPG Maxus, led by hotels, restaurants and jewellery categories. (But real estate players did not spend as much on digital, and in fact reduced their exposure by 8 per cent. Automotive category too followed suit, down by 23 per cent.)
* For traditional media, the first-half did not offer reasons for cheer. Print was down by a substantial 29 per cent from a year ago. Spending on radio spots was flat on a year-on-year basis.
