Ad industry set for turnaround

Dubai: After the steep decline of 2009, ad spend in the UAE was down by a more manageable 4 per cent in the first half of the year, the UAE's advertising industry believes a turnaround may well be in sight. And a combination of favourable factors is coming into play to make this happen.

This year, Ramadan starts in mid-August and will be followed closely by the opening of the new academic year. Both periods traditionally see a marked rise in ad spends, but to have one follow the other in short order have the local advertising community all charged up. Not just that, they believe the momentum can easily be sustained right through to the end of the year, and not without reason either.

"Considering Ramadan, Back to School, the two upcoming Eids, the festive season towards the end of the year — and with all the action that happens around them — and the tourists they attract, we are looking to an even better period of 2010," said Satish Mayya, CEO of BPG Maxus, a media buying outfit.

There is a consensus building within the advertising industry around this sentiment. However curtailed advertiser budgets may be compared with the boom years of the recent past, it's a no-brainer that leading brands still need to maintain an optimum level of exposure in the marketplace.

If advertisers can convince enough of their clients that the second half of the year should see them "raise" — rather than just "maintain" — their profile, a turnaround for the ad industry as a whole could be closer at hand.

The numbers for the first six months suggests that some stability in ad spending patterns have been reached in the UAE. Against a 26 per cent drop in the first half of 2009 compared with 2008, this was limited to a more manageable 4 per cent drop for the first six months of 2010 on a year-on-year basis.

The whole of 2009 saw spending go through a 27 per cent freefall, according to data from the Pan Arab Research Centre (Parc).

But prospects of a much improved showing in the second half would convince many that the worst phase ever for the local advertising sector can now be confined to the past.

Shaharyar Omar, product manager at Pan Arab Research Centre, believes this can be achieved. "The second half can be expected to see a 5 to 10 per cent gain," he said.

This projection falls well within the bounds of the probable. In fact, at $119 million June recorded the highest monthly ad spend in the first six months.

Not only that, it was the only month that actually saw a gain when you draw a comparison with the data for the first six months of 2009. For sure, the focused ad spends during Dubai Summer Surprises 2010 had a lot to do with the upturn of last month.

The belief is that this need not be a one-off. "A clear trend is there to suggest ad spending is starting to pick up again," said Omar. "From the data we receive and monitor, it's clear the recent gains will extend into the immediate future as well."

But there are some who feel a heightened sense of optimism would be misplaced. "No one should expect drastic improvements in ad spends, most advertisers are working on vastly reduced ad budgets for 2010," said the head of a local advertising agency. "They are not going to suddenly come in with more funds on ads.

"What's more likely is those brands which had minimal ad exposures in the first half could be prompted to change their strategy now."