Advertisers loosen their purse strings in the UAE

With June proving an exceptionally busy month and spending patterns holding steady in the other five months, the UAE was easily the top regional market for advertising. The first-half of the year saw advertiser spending $755 million (Dh2,773 billion). This represents an 8 per cent gain over the $698 million advertisers ploughed in during the corresponding period of 2011, an indication that key sectors such as retail, travel and hospitality have the confidence to mount major ad campaigns. Saudi Arabia ranked second in the regional rankings with $752 million, up 16 per cent from a year ago.

Estimates suggest that advertisers loosened their purse strings and spent $146 million last month, according to data from Pan Arab Research Centre (Parc). The numbers are based on the official media rate cards and do not take into account any discounts that media owners provide.

Local newspapers and magazines pulled in more ad dollars during the first-half, by 4 and 7 per cent respectively, to total $443 million and $119 million, based on Parc projections. Outdoor, helped by the ad blitz during Dubai Shopping Festival (DSF), was another winner with a 50 per cent increase over 2011 and totalled $106 million. Television saw a drop, by 22 per cent, to $50 million. The estimate for radio stood at $27 million. Spending on digital media is not tracked. “A growth in ad spend, albeit single digit, is indeed healthy; DSF and DSS always create spikes in the first-half, but this year DSS started earlier due to Ramadan and will be shorter,” said Nitin Puri, executive director at BPG Group. “In fact, school holidays started 10 days into DSS and leading to a quieter than usual start.”

At $104 million, malls and stores were heavy spenders, reinforcing their status as a key component of the local economy. The travel and hospitality sector accounted for $70 million, while automotive brands and their dealerships spread out $51 million.

The government sector and its many agencies continued to be active in getting their messages across and spent $175 million in the process.

“Automobile, furniture, jewellery and general retail have been reasonably active,” said Tanvir Kanji, head of Inca Tanvir. “As to whether there will an increase in media rate cards for the new season, it would be more logical if the hikes were based on parameters that media planners and buyers consider — circulation and reach, audience profile, editorial environment and value additions offered to regular advertisers.

“In the present scenario, I would imagine rates would stabilise and, mind you, advertisers have never understood the logic of rates going northwards with each calendar year.”