Arab World FM stations see 11.6% rise in ad revenue

While the media is struggling with declining ad spend in the wake of the international economic turmoil, radio seems to have gained ground as local FM radio stations in the Arab World increased their ad revenues by 11.6 per cent during 2009, conveying a healthy development for the airwaves.

According to a new report "An Analysis of FM Radio Advertising Rates in the Arab World" released by the Arab Advisors Group, radio waves across the Arab World have shown some very encouraging numbers and are expected to continue their path this year as well.

Voicing the same confidence, Mahmoud Al Rasheed, General Manager of Arab Radio Network, said: "Last year has been very good for our network and we attracted lot of new businesses.

"The returns on every advertising dirham spent on radio are very high, and clients have repeatedly asked for increasing their presence on our airwaves."

The average local FM stations' ad rates in the Arab World increased from $101 (Dh371) in 2006 to $112 in 2008 and up to $125 in 2009.

Still, pan-Arab radio stations' average advertising rates exceed by a substantial margin those of local radio stations. This could be explained by the fact that some of the pan-Arab radio stations are the only FM radio stations that broadcast in Saudi Arabia, the region's largest consumer market.

The 102-page report provides a detailed analysis of the FM Radio advertising rates in the 15 countries of the UAE, Algeria, Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Morocco, Oman Qatar, Palestine, Syria, Tunisia and Yemen. The countries were chosen to be representative, geographically of the Arab World. In addition, the countries analysed have diverse regulatory frameworks.

Shakeel Khazi, Marketing head of Pan Emirates furnishing, believes that radio is the most essential tool for marketing communication in the region. "Its impact can be noticed in our tactical advertising that we use for announcing our special promotions," said Khazi.

Comparing the pan-Arab radio reach with local stations, he says that "for brands and products with pan-Arab reach, radio waves across the region are bound to be far-reaching and that justifies their higher advertising rate".

The regional average advertising rate represents the mean for a 30-second commercial spot for the countries discussed in the report. The average rates for the region were calculated using the countries' average advertising rates on a local level for the whole week. Furthermore, the analysis in the report shows that the Pan Arab average advertising rates are usually higher than the local averages. This is due to the fact that they cater to the Kingdom of Saudi Arabia, one of the biggest consumer markets in the Arab World, with limited competition from local FM radio stations.

"In countries where radio stations are government- owned, the corresponding advertising rates are usually not as high as radio stations under private ownership" Issa Goussous, Arab Advisors' Senior Research Analyst, wrote in the report.

"There are three peak timings 7:00- 8:00, 8:00- 9:00 and 19:00- 20:00 where the advertising rates are at their highest in the region. These peak times correspond to driving times to and from work since most radio listeners in the region listen to radio in their cars" Goussous noted.

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