Local TV programme sponsorships for Ramadan drop 30%
As Ramadan boosts local advertising spend, television channels fell short of their expected target with only single digit growth, said some media observers.
Ramadan, which traditionally provided the advertising market with an uplift after the dormant summer season, is not up to expectations this time, said Sami Raffoul, General Manager of Pan Arab Research Centre (PARC).
"Based on my interaction with media sources, everybody seems dismayed at the Ramadan landscape this year," he said.
"This depends on whether those expectations were placed in comparison with last year's Ramadan or with other months in 2009. The growth is definitely not on par with last year's Ramadan. It would be, however, a much larger problem if the results were not up to the levels of the previous months", he said.
Ali Azghar, Chairman and Managing Director, Icon Advertising, said the growth is definitely taking place because product sales that are directly related to the fasting month are due to increase.
"I am not saying it is a tremendous growth, somewhere between seven to 10 per cent, compared to first quarter of 2009, and the past two months," he said.
On the other hand, programme sponsorship, which usually accounts for the bulk of TV ad spend during Ramadan, has seen an estimated decline of 30 per cent, according to Satish Mayya, Executive Vice-President and Chief Operating Officer at BPG Media.
The sponsorships, earlier dominated by real estate developers, are now mostly adopted by fast moving consumer goods (FMCG), particularly the international brands, said Raffoul.
He said TV stations have developed their Ramadan programme grids well in advance this year, with proper marketing strategies to avoid any further losses above the general decline in sector since the beginning of the global financial crisis.
Mayya said despite the decline in certain areas, there has been a growth in the advertising budgets.
"The demand for advertising, however, is less this year compared to the same period of last year," he said. "The rates have been on level with last year's advertising rates, but in my opinion, advertisers who have not come forward this year, would not have come anyway even if the rates were decreased."
Meanwhile, a few programmes even saw an increase in their ad rates costs, "but this is only one or two programmes on MBC", said Azghar.
According to Mayya, this is justified by the TV stations' need to invest heavily in purchasing Ramadan programmes that will attract the right audience and ultimately result in advertising revenue. "Those investments will make it difficult to reduce the ad rates," he said.
Azghar said: "Whatever the rate cards say, there is always room for negotiation in this part of the world. The growth in that sense is subject to the increase in ad rates and spend, which was the case last year, just before the global crisis broke."
"This year, ad rates are flat and advertising spend is not growing significantly. TV stations that have still not achieved their sponsorship targets, for example will continue to negotiate for lower prices. Other TV stations that have reached their targets will not be giving any discounts."
Meanwhile, it seems that TV stations have still not closed the whole of Ramadan deals. The head of a major local TV channel said it was too early to give any impression about the Ramadan advertising trends. He said the station would get a better view of the directions advertising would be heading after the end of the first week.
Advertisers, this year, are mainly automobiles, social awareness campaigns, FMCG and airlines.
Mayya said telecommunications sector also continued to spend, but not as heavily as last year.
Asked if Ramadan would still be hoped to set an upward trend that should continue throughout the rest of the year, Azghar was moderately optimistic.
He said the month of fasting is usually followed by the festivals season in the UAE, including two Eids, Indian festivals Dusshera and Diwali and later Christmas and New Year. "There are chances that the growth will sustain, but we may never know how the market is going to react." said Azghar. "It is quite early to predict, until we settle for the first week."
Ramadan ad rates remain unchanged
The Ramadan advertising rates this year have not exceeded the ceiling of 2008 rates.
The most expensive was MBC1's record advertising rate of Dh130,000 per 30 seconds spot, on its Gulf Comedy programme Kulna Iyal Graya.
Another MBC 1 Gulf Series had a rate of Dh100,000, while Dubai TV's Sira'a Aala L Rimal, the Bedouin series written by His Highness Sheikh Mohammad bin Rashid Al Maktoum, Vice-President, Prime Minister of the UAE and Ruler of Dubai, was for Dh55,000 per spot.
The least expensive spots were at Dh9000 per 30 seconds.
This year, MBC1's most expensive programmes are Bab Al Hara at 12.00am, Tash Ma Tash at 7.30pm and Bayni wa Baynak at 9.00pm. Rates for 30 seconds are Dh130,000.
The second most expensive programme is priced at Dh100,000 for 30 seconds on Umm Hadjan cartoon and Umm Halah comedy.
The rest of the peak time programmes are priced at Dh75,000 for 30 seconds. During normal times programming, the most expensive spot is Dh55,000 on Power of Ten.
Dubai TV's most expensive programmes are priced at Dh45,000 such as Zaman Al Aar and Khass Jiddan at 9.00pm and 12.00am.
The rest of the programmes are priced at Dh37,500 and Dh18,500 for the religious programmes. During normal times programming the most expensive programme is Taratatta priced at Dh30,000.
Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here.