Adspend falls in Middle East's biggest market

11 January 2010

ABU DHABI: Adspend levels in the United Arab Emirates, the Middle East's biggest advertising market, fell by 27% last year, but should return to growth in 2010.

The Pan Arab Research Center has reported that total advertising expenditure in the UAE stood at $1.46 billion (€1.02bn; £914m) in 2009, broadly the same figure as recorded in 2007.

The real estate category was down by 79% on an annual basis, falling from $644 million to $135m, with financial services also posting a contraction of 42%, from $108m to $63m.

Luxury products delivered a decline of 32%, with auto makers registering a more modest decrease of 17% year-on-year.

The government was the actually biggest overall advertiser in the UAE last year, with an outlay of $384m, a slide of 3% compared with 2008.

More positively, brands in the communications and entertainment sectors generated upticks reaching 39% and 34% respectively. 
Overall trading conditions also improved during the fourth quarter, when ad revenues climbed to $421m from the figure of $333m delivered in Q3.

Sami Raffoul, general manager of the Pan Arab Research Center, said "I think those trends will create a momentum at the beginning of 2010 that spur an increase in adspend.

"This is also in parallel to the global economic trends, which are seeing positive improvements," he added.

As such, the research firm predicted the advertising market in the UAE will expand by between 6% and 10% this year, boosted in particular by heightened investment from financial services brands. 

"It is certain that financial institutions will not be able to remain silent for long, notably because of the need to retain their clients and maintain their share of voice in the market," Raffoul said.

Data sourced from Business 24/7; additional content by Warc staff