Region's ad spend likely to exceed pre-crisis levels
Regional ad spend will exceed the pre-crisis 2008 figures by 2011, according to the Dubai Press Club (DPC).
The DPC shared its findings in the form of the Arab Media Outlook 2009-2013, an annual survey of researched facts that covers 15 markets in the region.
Speaking at the press conference, Mona Al Marri, Chairperson of the DPC, said that the Press Club had pressed into services its entire network of relationships across the Arab World to come up with the report. "Covering 15 countries this year was a quantum leap from the initial six countries that began with three years ago, increasing to 12 for the previous edition."
The report assessed the impact of the global economic crisis on the region's media industry and said that in the regional advertising industry, although revenues dropped by 14 per cent in 2009, there remains a strong sense of optimism for the future among industry players.
In fact, nearly 60 per cent of respondents interviewed for the study feel positive about the prospects of the media industry in 2010, as per the findings of the Arab Outlook. However, in the past, industry leaders from the region have commented a drop of as much as 60 per cent last year.
The 14 per cent drop in advertising is a surprise figure for local advertisers, who believe there has been as much as 35 per cent drop in ad spend in the last year.
The region and Dubai in particular depended a lot on real estate advertising and sudden collapse in that sector left a major dent in ad spend, taking it down by as much as 35 per cent, industry leaders have shared this with Emirates Business in last year's reports.
The region remains the lowest in the amount of ad spend which the report did not quantify. For comparison, the US is one of the highest ad spend countries with an annual budget of $22 per capital ad spent.
On a positive note, the region is set to resume its position as one of the fastest growing regions in the world in terms of advertising spend, growing at a compound annual growth rate of eight per cent between 2009 and 2013.
The internet, in particular, will grow at an impressive CAGR of nearly 50 per cent over the same period to constitute over four per cent of the total market by 2013. This is way below the global standard of 18 per cent of the total ad spend.
In a detailed presentation of the main findings, Maryam bin Fahad, Executive Director of DPC, pointed out that all sectors of the media industry are expected to display growth over the next five years. Unlike most global markets, the Arab print industry remains strong and has continued to show growth in both the number of titles and overall circulation in recent years, as per the outlook findings.
Although the rate of growth for the print industry is expected to slow, it still remains far more resilient than in other markets.
The emergence of the internet as a viable platform for news consumption is beginning to affect traditional newspapers and most organisations have started to use the internet to complement their print edition.
The report shows that while the media industry across all Arab countries is expected to grow, some areas are displaying unique regional characteristics. North African countries, for example Morocco and Tunisia, have seen the launch of a number of private channels in recent years and new platforms, such as Digital Terrestrial Television (DTT), are gaining attraction.
Jordan is growing as a hub for regional internet start-ups, with several successful initiatives in the online world. In the GCC, new licences for newspapers, as well as investments in TV production, are on the rise and channels are increasingly targeting content at neighbouring Gulf countries to broaden audience reach.
The third media outlook report emphasised that developments in the region's local production industry for all media platforms could help drive growth in the value of local Arabic content over the next five years.
However, the report added growth will be depend on collaboration by governments and industry players alike to resolve several issues, including implementation of effective audience and circulation measurement systems, as well as continued efforts to tackle piracy and industry consolidation.
Specifically, the report provides an in-depth assessment of the local content industry in the Arab World and finds that the cost per hour of original content on the top channels in the UK to be worth between two to four times as much as the average Arabic series on the top 15 pan-Arab channels.
Unlocking the value of local content in the region, the report suggests, will be driven by tackling the challenges of monetisation, funding and talent and will be enabled by developments in technology and government regulation. Resolving the key issues that these fundamental areas present will be vital for generating a vibrant and sustainable local content industry in the region.
The study provides a comprehensive overview of the media scene in the region as compared to global markets, a country by country analysis of the media in 15 Arab countries, the results of a market research study conducted in four countries (Egypt, Lebanon, Saudi Arabia and UAE) and an assessment of opportunities for the stimulation and exploitation of the local content industry.
During the presentation, Fahad said the report is used by both the governments and media groups to resolve issues, including media outreach measurements, fighting piracy and corporate consolidation in the sector.
On a qualitative comparison of the report over the previous years, Fahad said: "The report this year is far more exhaustive in its scope and reach than the previous editions and is backed for the first time, by extensive market research in four significant media markets in the region on shifting media consumption habits.
The latest report also includes an in-depth market research carried out in Egypt, Lebanon, Saudi Arabia and the UAE.
The research found that the internet is playing an increasingly prominent role in the media consumption habits of people interviewed in these four markets.
Commenting on the challenges of the changing phase of media canvas that impacted the task of gathering accurate information, Fahad said in the report: "The last edition of the report came out soon after the onset of the global financial crisis, leaving out little scope for incorporating a detailed analysis of its impact on the media industry. We have tried to more than compensate for that in the present edition, providing a much more focused assessment of the media industry against the backdrop of the meltdown."
Remarkably, people in the Arab world are spending about three hours per day on the internet on average, which is already on par with the amount of time spent on TV. Social networking, in particular, was cited among the favourite activities online and one of the top methods of communication.
On average, 70 per cent of the people in the four markets researched use social networks in some capacity and about 15 per cent use social networking sites at least once a day.
The presentation of the outlook report was followed by a panel discussion that was moderated by Fahad.
The speakers at the session included Ali Al Ahmed, Group Chief Strategy Officer, etisalat; Ali Jaber, Dean of the Mohammed Bin Rashid School for Communication at the American University in Dubai; Dr Ammar Bakkar, Head of New Media, MBC; Mohammed Hareb, Director and Producer of Freej, the cartoon series and Rawan Al Damen, Senior Producer, Programmes Administration, Al Jazeerah.
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