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‘Buy before VAT’ blitz perks up advertising industry

Spending on a high since mid-November and coincides with holiday campaigns

Gulf News

Dubai: It’s the VAT induced blast-off in the UAE’s advertising space.

In recent weeks, advertisers have been using the upcoming VAT as reason to spend heavily on “Buy Now” and “Do it before VAT” messages. And they have been doing it across platforms, and not just reliant on digital ads to do their talking.

This is quite a difference from their general reluctance in the last 11 months to spend heavily on advertising and marketing given the weak consumer sentiments in key sectors. But with VAT about to be reality, advertisers are using the last of their ad dirhams for this year to drum up some sort of buying activity.

Car dealerships were quick to spot an opportunity to use VAT as a leverage in their buy now messaging. It has also coincided with the arrival of the 2018 model year vehicles as well as their need to clear off older inventory.

Other retail categories have been quick to follow — and the themes have been consistent. Why pay the additional VAT charges when you can buy now? And with a few other incentives thrown in.

Even businesses that were not typical advertisers have gotten into the frame. For instance, the air waves are busy with ad jingles talking up the merits of one accounting software (VAT-enabled, of course) or the other. Even small business consultancies want to get a word in and hoping to reach potential customers. According to Vikas Panchal, Business Development and Operations head at Tally Solutions, “We’ve been using internal and external communication channels — newsletters, print, webinars and free seminars — to educate UAE businesses on VAT and its processes.”

But industry sources say it would be hard to separate the current VAT-led advertising bounce from what typically happens during the peak holiday buying period each year. “Yes, ad spends have perked up since mid — November to a great extent and this will continue until the year-end,” said Satish Mayya, CEO of BPG Maxus, the media buying entity. “Retail brands across all categories are wooing customers with “unbelievable” offers. This is the normal trend each year and I’m not sure how much is actually related to VAT implementation.

“We should see some further spending towards the last week of December … definitely.”

Since mid-November, both outdoor and traditional media platforms — print, TV, etc. — have benefited from the surge. But online media seems to have benefited to the most, while retailers are also using SMS and email flyers as a “highly cost-effective” alternative.

After three quarters of measly ad spend, advertisers are spreading a bit of cheer in the ad industry. Plus, with a little bit of help from the pre-VAT messaging.

 

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