Ad spend reaches new heights

Dubai: A 30-second advertisement during peak time for a free-to-air (FTA) satellite TV channel charges $3,362 (Dh12,339), an all-time high for the Arab advertising world this year. The average advertising rate is calculated based on a standard 30-second TV commercial spot in a specific time segment throughout the week.

"In 2009, the peak average advertising rates of major free-to-air satellite channels were 25 per cent higher than those of 2007," said Eisa Goussous, Senior Research Analyst at the Arab Advisors Group.

However, the rate is still low compared with the rest of the world.

"The advertising rates may be high compared to previous years but are quite low by global standards," said Shaharyar Umar, Product Manager at Pan Arab Research Centre.

"It has been observed that media owners have also increased incentives and discounts in the challenging year of 2009 to the advertiser. The ad spend is strictly limited to media rate cards and [does] not account for these incentives and discounts."

The Arab Advisors Group believes that the FTA satellite TV advertising rates in the region remain low due to the lack of an agreed-upon audience-measuring system.

"The ad spend in UAE for the first seven months of the year is nearly 29 per cent down, however, Pan Arab media advertisement spend has increased by 40 per cent [over] the same period of time compared to previous year," Umar said.

The increase in advertising rates this year comes at a time when real estate has been driven out of the market as the top television spender.

"[During the first half of the year], real estate and financial sector advertisement spending tumbled by 77 per cent and 46 per cent in the UAE compared to the previous year over the same period," Umar said.

Telecom giant etisalat was the number one spender in advertising in the UAE for the first half of the year, contributing over $8.6 million to the market. Many believe the recent command of the advertising sector by telecom industries is likely to continue in the upcoming months.

"From a comparison between the first half of this year versus the first half of last year, the trend is likely to continue. We can also expect a rise in government spending in terms of advertising in infrastructure or tourism," commented Umar.

An analysis of advertising rates by the Arab Advisors Group reveals that FTA satellite TV rates are highest between 9 and 10pm in Saudi Arabia. "During night time, the viewership is high as working people return home, so obviously the rates will be higher," said Umar.

The report, titled Satellite TV Advertising Rates in the Arab World 2009, provides a detailed analysis of FTA advertising rates across 35 channels varying in popularity used to represent the total market.

"General channels, movies and series and news and current affairs channels have the highest average advertising rates amongst the channel types covered in this report. The reasons why these channel types have considerably higher advertising rates than the other channels could be attributed to a number of factors such as: high viewership and wide variety of content," Danya Nusseir, Arab Advisors Group Senior Research Analyst, said.