Middle East digital budgets soar

27 April 2012

DUBAI: Digital adspend could rise by almost 50% in the Middle East this year, a new forecast from ad network Ikoo has suggested.

Gulf News reports that the firm now predicts advertisers' total online expenditures to reach $220m in 2012, up from $150m last year.

Mobile and online video ads are forecast to be key drivers of this digital growth, with Ikoo analysis suggesting that spending on these segments could double during 2012.

Speaking to the news source, Ikoo CEO Isam Bayazidi added that newer rich-media formats can also prove more effective than traditional display spots.

"You cannot compare a video to a banner ad; when you are seeing a video ad, you are giving it your full attention. With a banner, it does not necessarily mean that it will have the full attention. You cannot compare the price of a video and banner."

Bayazidi added that news publishers in the Middle East are currently selling digital ads at a rate four to five times higher than their equivalents in the US and UK.

Despite its rapid growth, online adspend still takes a relatively small proportion of the all-media total in the Middle East, taking a share of less than 5% in 2011.

Also speaking to Gulf News, Tanvir Kanji, head of local ad agency Inca Tanvir, added that digital was "flavour of the season" in the region.

"A lot also depends on the product category, and more importantly, the target group [for digital ads]," he added. "Traditional media still has the major allocation of the budget."

Latest global adspend figures from Nielsen released earlier this month suggest that the MENA region as a whole increased budgets by 11.3% this year, when compared to the previous year.

This compares to annual increases of 11.5% for Asia-Pacific, 1.8% for North America, and a net decline of -0.4% for Europe, the region hit hardest by recent economic volatility.

Data sourced from Gulf News; additional content by Warc staff