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19 June 2011
THE STATE OF THE NATIONS If you’re going to put together a report on the Middle East’s advertising and media industry, you might as well do it while there’s a lot going on. Hence this report. The Gulf, the Levant and the part of North Africa that we cover – Egypt (courtesy of Sinai) – are witnessing unprecedented change. It’s easy to fall into hyperbole when discussing the Middle East. Now more so than ever. With the world’s gaze firmly placed on Egypt, Syria, Yemen, and, to an unforgivably lesser extent, Bahrain, the economies, political realities and media landscapes of the region are under scrutiny. The revolutions, protests, demonstrations and full-on battles that have been taking place have predictably had a major impact on the advertising industry. However, they are also negatively affecting neighbouring nations, while others are benefitting from regional fallout. The UAE, for example, is witnessing an influx of resources from trouble spots and a return of confidence. This report attempts to provide a ‘state of the nation’ report on each of the region’s advertising markets. Some, like Egypt, have been through the mill and are in the process of emerging on the
other side, while others, such as Lebanon, could well be about to plunge into the mire after years of sustained growth. As is always the case, market data is often wildly contradictory or downright misleading. We have therefore attempted to restrict our data to three sources – ZenithOptimedia for forecasts and 2010 figures; the Pan Arab Research Center for first quarter results; and Mindshare for individual country data. It must be noted, however, that all adspend figures in the following pages are based on rate card and do not take into consideration discounts or individual deals. Many of the adspend predictions are likely to be downgraded in the coming months, particularly in Lebanon. As the situation is also fast moving in many of the countries, we should also point out that what is printed is based on the situation in each country at the time of going to press. Overall, the region will probably end up with a flat or negative 2011. To some extent, losses in markets such as Egypt and Bahrain will be offset by gains in the UAE and Saudi Arabia, but if unrest spreads further, it could all go horribly wrong. Iain Akerman, editor, Campaign
3
CONTENTS All eyes on the Middle East Popular uprisings are shaping a new media landscape
4
Overview Regional confidence is high, says Mindshare’s Elie Haber
6
Bahrain Advertising activity could take years to recover from unrest
7
Egypt Revolution has impacted all aspects of the ad industry
8
Iraq Still not for the faint-hearted despite a growing economy
10
Jordan Entry to the GCC could provide the fillip the country needs
11
Kuwait Creatively, the country is in danger of being left behind
13
Lebanon Adland faces falling foul of instability once again
14
Oman An unpredictable future awaits the sultanate
16
Qatar Boosted by Fifa, but the ad industry remains undervalued
17
Saudi Arabia A bounce back is happening, but numerous issues remain
18
Syria With the country in turmoil, Syria’s promise will be unrealised
21
UAE An improving economy means the UAE is on the up
22
Other markets Palestine and Yemen
25
Statistics
26
Cover design by
Motivate Publishing Head Office: PO Box 2331, Dubai, UAE. Tel: +971 4 282 4060, Fax: +971 4 282 4436, Email: motivate@motivate.ae Dubai Media City: Motivate Publishing FZ LLC, Office 508, 5th Floor, Building 8, Dubai, UAE. Tel: +971 4 390 3550, Fax: +971 4 390 4845 Abu Dhabi: Motivate Advertising, Marketing & Publishing, PO Box 43072, Abu Dhabi, UAE. Tel: +971 2 677 2005, Fax: +971 2 677 0124, Email: motivate-adh@motivate.ae London: Motivate Publishing Ltd, Acre House, 11/15 William Road, London NW1 3ER. www.motivatepublishing.com Editor-in-Chief Obaid Humaid Al Tayer Group Editor and Managing Partner Ian Fairservice Group Senior Editor Gina Johnson Editor Iain Akerman (+971 4 2052 276) Deputy Editor Nick Cooper (254) Staff photographer Naveed Ahmed Advertising enquiries Tel: +971 4 2824060 Team Leader Abraham Koshy (+971 4 2052424) Senior Advertisement Manager Imane Eddinari (+971 50 6002123) Operations General Manager – Production and Circulation S. Sasidharan Production Manager C. Sudhakar Production supervisor R. Murali Krishnan Haymarket Media Group Chairman Michael Heseltine Managing Director Martin Durham Licensing Director Tim Bulley Printed by IPP The publishers regret that they cannot accept liability for error or omissions contained in this publication, however caused. The opinions and views contained in this publication are not necessarily those of the publishers. Readers are advised to seek specialist advice before acting on information contained in this publication which is provided for general use and may not be appropriate for the readers’ particular circumstances. The ownership of trademarks is acknowledged. No part of this publication or any part of the contents thereof may be reproduced, stored in a retrieval system or transmitted in any form without the permission of the publishers in writing. An exemption is hereby granted for extracts used for the purpose of fair review. Campaign Middle East includes material reproduced from the UK Edition of Campaign, which is the copyright of Haymarket. Campaign is a trademark of Haymarket and is used under licence. The views and opinions expressed within this magazine are not necessarily those of Haymarket Magazines Limited or those of its contributors.
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19 June 2011
ALL EYES ON THE MIDDLE EAST Popular uprisings have slowed growth and are helping to shape a new media landscape
T
he last thing on the minds of most people across the Middle East and North Africa is advertising. Syrians, Bahrainis, Tunisians, Egyptians, Yemenis and Libyans have, for obvious reasons, far more pressing concerns. They have little or no desire to consume advertising, and clients have a similar level of enthusiasm for advertising amid bloodshed and civil unrest. The immediate result has been a predictable fall in adspend in the affected countries during the first half of the year, with the disruption of planned advertising campaigns also impacting pan-Arab broadcasters such as MBC and Rotana. A realistic picture of the region is painted by ZenithOptimedia,which predicts that Egypt’s advertising spend will fall by 20 per cent this year – despite relative calm returning to the country – followed by a 12.1 per cent recovery in 2012. The troubles in Bahrain – which are complicated by sectarian divisions – will result in at least a drop of 18.7 per cent from $176 million in 2010 to $143 million this year, while Oman, which has been only marginally affected by the Arab Spring, will see its market drop by a similar amount, shrinking by 18.8 per cent. Figures for Syria, Libya and Yemen – countries with almost embryonic advertising industries – are almost non-existant; although the intensity of the fighting in those countries leaves no doubt that the impact will be severe. As Kamal Al-Dailami, general manager of Brothers Media in the Yemeni capital Sana’a, says: “Fighting stopped the wheel of the commercial market, except for food and fuel.” For the Middle East as a whole though, the picture isn’t so gloomy. Much of the decline
in adspend in those countries witnessing political and social upheaval will be offset by growth in other countries, with the UAE bouncing back from recession and predicted to grow by 5.2 per cent this year. Saudi Arabia is also doing well, but historically volatile Lebanon, whilst recently viewed as a stable country amidst a sea of unrest, is showing signs of strain. Any optimism is also tempered by knowledge that the one thing the Middle East will always be is unpredictable. When it comes to changes in media consumption habits, the one subject everyone’s been talking about is social media and its role – real or perceived – in affecting political change during the course of the Arab Spring. It is a divisive issue. To what extent did it help empower revolutionaries – particularly in Egypt – and will increased social media usage lead to a lasting erosion of the power of TV and print in the Arab world? So far there have been two major conferences in the region that have sought to provide answers. First, a panel at ArabNet in Jordan, led by Samih Toukan, founder of Maktoob, downplayed the role of social media in the uprisings. It pointed out that many, if not most, of the protestors were not on Facebook or Twitter and that it was oppression and injustice that drove people on to the street. Second, and more recently, was the Arab Media Forum in Dubai, where panelists dismissed the idea of a Facebook revolution as a myth. Social media was viewed purely as a facilitator, helping to communicate the struggle to both those within Egypt and to the outside world – an appraisal not dissimilar to the Iranian protests of 2009. In an article for Campaign in April, Ghanem Nuseibeh, a
founder, partner and director at Cornerstone Global Associates, said that social media is supposed to improve the aggregation of opinions and the construction of collective wisdom. “We need to distinguish between its success in spreading opinion, and any contribution to rational outcome,” he said.“Social media is not alone in creating momentum behind the Arab Uprising. Satellite television and internet news sites have all played a massive role. One might even argue that without Al Jazeera, the YouTube footage of the selfimmolation of Mohamed Bouazizi might have only resulted in another forgotten number on the decades-long Arab victims’ roll of honour.” There are others on the opposite side of the fence. In the latest issue of Arab Media & Society, Dr Sahar Khamis and Katherine Vaughn argue that new media provided a virtual space for assembly and supported the capability of protestors in Egypt to plan, organise, and execute peaceful protests. “It is obvious that the Egyptian people were able to successfully use these weapons to win their battle against President Mubarak and his autocratic regime; however, it remains to be seen if they will be equally successful in using them to win their ongoing battle to achieve a swift, safe, and smooth transition to democratisation.” What is certain is that consumers are adopting social media quicker than ever before. “The impact of social media on the current political and economic climate has brought to light the power of the medium,” says Karim Khouri, managing director of Impact BBDO Cairo. “Every single one of our clients recognises social media as a new opportunity for dialogue
ADVERTISING EXPENDITURE BY MEDIUM Media split, Jan-March 2011 – Pan-Arab, GCC, Levant markets (does not include online adspend)
Newspapers $868 million TV $1.473 billion Outdoor $125 million Magazines $181 million Radio $33 million
with their consumers.” In an essay in Campaign earlier this year, Ziad Skaff, group director, and Nina Fedorczuk, business intelligence manager, at Integral OMG, said: “Consumers have realised the value it adds to their lives in a very specific set of conditions and will find it hard to let go. In these networks, they have found a voice, an assertiveness they will find very hard to let go of. The growth in Facebook’s user base in the region is driven by the critical 18-44 age demographic in Egypt, Saudi Arabia and in Libya. These events will prove to be a catalyst for consumers in North Africa and further afield in the whole of the MENA region, whether the countries were affected by the unrest, like Bahrain or Yemen, or not. It is therefore likely that brands will find an even greater audience and richer environment once the situation settles and the focus returns to more peaceful considerations.” Statistics for the growth of social media usage in the region over the course of the year
are impressive (see box). This is only set to increase as shifts in media consumption kick in. Eli Khoury, M&C Saatchi’s CEO for the MENA region, says: “Though not immediately, or in the short term, the shift will be drastic in favour of online and social media in the medium to long term. According to Cisco, for example, the region will see a compound annual growth of 52 per cent in internet traffic over the next five years, leading to an eight-fold increase by 2015; an estimated 1.3 billion networked devices will be in use in the Middle East and Africa by then. As for media, three trends are observed. The first is how media is being consumed and transformed by increased digital and mobile usage; second, strategic partnerships, mergers and acquisitions that
St. Petersburg 19 June 2011
Moscow
Facebook Middle East & North Africa statistics – May 2011 Country Algeria Bahrain Egypt Iraq Jordan Kuwait Lebanon Libya Morocco Oman Palestine Qatar Saudi Arabia Tunisia UAE Yemen
Beirut Damascus Amman
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Totals
Baghdad
May-10 878,660 216,060 3,359,660 189,020 883,780 498,120 931,000 143,960 1,767,380 152,840 178,860 373,160 2,267,060 1,554,760 1,596,160 96,700 15,087,580
Total Users May-11 2,207,700 283,000 7,558,780 806,320 1,613,520 796,320 1,166,140 49,240 3,525,520 274,900 578,380 255,880 3,947,540 2,558,400 2,297,440 343,940 28,263,020
Language choice May 2010 Arabic English French 7% 6% 87% 22% 77% 0% 34% 8% 0% 34% 61% 0% 31% 68% 0% 27% 70% 2% 4% 93% 3% 50% 42% 2% 11% 6% 82% 22% 76% 1% 46% 53% 0% 13% 82% 1% 49% 49% 0% 1% 3% 95% 9% 88% 1% 65% 33% 0% 24% 51% 25%
Change 151% 31% 125% 327% 83% 60% 25% -66% 99% 80% 223% -31% 74% 65% 44% 256% 87%
Language choice May 2011 Arabic English French 14% 3% 82% 32% 68% 0% 51% 48% 0% 56% 43% 1% 45% 54% 0% 27% 73% 1% 5% 92% 3% 41% 55% 5% 17% 4% 79% 37% 62% 0% 68% 32% 1% 16% 82% 1% 61% 38% 0% 2% 3% 95% 10% 89% 1% 77% 23% 0% 35% 40% 25%
Arabic Growth 423% 91% 233% 573% 165% 57% 77% -75% 217% 199% 370% -16% 115% 124% 48% 310% 175%
Source: Spot On – Note: All data originates from Facebook advertisers statistics; * Arabic growth calculated May 2010 to May 2011
Cairo
Kuwait City
Riyadh
Middle East Internet Usage
Manama Doha Dubai
Country
Muscat
Jeddah
Sana’a
Bahrain Egypt Iraq Jordan Kuwait Lebanon Oman Palestine (West Bank) Qatar Saudi Arabia Syria UAE Yemen
Population 2010 (est) 738,004 80,471,869 29,671,605 6,407,085 2,789,132 4,125,247 2,967,717 2,514,845 840,926 25,731,776 22,198,110 4,975,593 23,495,361
Usage, in Dec/2000 40,000 450,000 12,500 127,300 150,000 300,000 90,000 35,000 30,000 200,000 30,000 735,000 15,000
Internet usage Latest data 649,300 17,060,000 325,000 1,741,900 1,100,000 1,000,000 1,236,700 356,000 436,000 9,800,000 3,935,000 3,777,900 420,000
% Population (penetration) 88.0% 21.2% 1.1% 27.2% 39.4% 24.2% 41.7% 14.2% 51.8% 38.1% 17.7% 75.9% 1.8%
User growth 2000-2010 1,523.3% 3,691.1% 2,500.0% 1,268.3% 633.3% 233.3% 1,274.1% 917.1% 1,353.3% 4,800.0% 13,016.7% 414.0% 2,700.0%
Source: Internet World Stats – Note: Based on latest available data
PERCENTAGE OF ADSPEND BY MEDIUM 32%
PRESS
33% 5% OUTDOOR
5% 7% 6% 55% 54%
4%
KEY
4%1% 1% 4%
2011
Source: Pan Arab Research Center – Jan-March 2011
16%
$2.685 BILLION (Total adspend Jan-March 2011 – Pan-Arab, GCC and Levant markets) Down 1% from $2.724 billion during the same period of 2010
2010
cater for increasingly ‘glocal’ practices, bringing media closer to their local markets as opposed to regional; and finally, the alarming scarcity of Arabic content. The proper interplay amongst these trends will drastically shape the future of the [regional] industry.” As for life after the dust has settled, the region could – and should – be stronger than ever. “The rebound is expected to bring back the market to better levels of growth than the highest reached previously,” says Khoury.“The two main indicators for such positive expectations are the eventual emergence of new MENA markets – namely in North Africa and the Levant – and the sequential effects of the Middle East policies initiated recently by the G8 summit.” Less reported globally, but arguably an equally important aspect of the protests sweeping the region, is the influence of unrest on Saudi Arabia, where there is an ongoing push for women in the ultraconservative country to have
more of a say in their lifestyles. The main initiative is Women2Drive, which represents a group of Saudi women in a coordinated drive to push for equality on the roads. Manal al-Sharif, who was arrested after she posted videos of herself driving on YouTube, may have been released, but she represents one of the most important consumer groups in the Gulf, and their emancipation would have an untold impact on advertisers. Women in the Middle East will control close to $400 billion of the region’s wealth before year-end and such forecasts are driving more and more advertisers to allocate campaigns that appeal to this influential target. Unfortunately, what should have been viewed as two positives for the Gulf and a tonic for advertisers – Qatar’s winning of the rights to host the Fifa World Cup in 2022 and the Bahrain Grand Prix – have turned into PR disasters. Qatar was in celebratory mood when it won the rights to host the World Cup. Now it stands accused of
“buying” the tournament and faces a tarnishing of its country brand as part of Fifa’s investigation into corruption. Worst of all was the FIA’s initial decision to proceed with the Bahrain Grand Prix on 30 October, although the race once again looks to be in doubt after the teams expressed no desire to race. The FIA decision was made despite Human Rights First’s assertion that “continued human rights violations indicate that the Bahraini government is unable to respect and protect basic rights of freedoms of assembly and expression, and further suggest the nation is incapable of hosting a major international sporting event”. Quietly going about its business in the middle of all the regional upheaval is Dubai. Much was made of the emirate’s fall from grace during the recession. Little will probably be written about its resurgence. Confidence is returning, adspend is up, and the emirate is viewed – rightly or wrongly – as an oasis of calm.
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19 June 2011
OVERVIEW
Regional confidence remains high, with the UAE likely to gain the most in 2011
I
t’s been an eventful start to the year – a year that has so far been marked by widespread social and political reforms in the Middle East, natural disasters and food inflation in Asia, and skyrocketing fuel prices in North America. In the past 18 months we have seen a clear divergence in how regions and countries are emerging from the global recession, and, for better or for worse, this trend became even more pronounced in the first quarter of this year. According to The Nielsen Company, global online consumer confidence rose two points in the first quarter of this year, driven by record confidence gains in the Middle East following social and political unrest. This newfound confidence in the region spread to neighbouring Saudi Arabia and the UAE, which reported the highest gain in consumer confidence levels, with double-digit increases compared with the previous quarter. Regional confidence is coming back and people are starting to spend money. This trend is likely to continue from now on. The UAE in particular is benefitting from the flight of resources from trouble spots to safe havens. The International Monetary Fund (IMF) has said that the regional unrest may benefit the UAE, while increased tourism and investments continue looking for diversification within the region. With people changing their travel plans away from unstable markets, Dubai is projected to enjoy some of the world’s strongest inbound tourism growth over the next few years. Even though the economic downturn initially impacted upon the growth of overall advertising spending; in 2011 there are signs of recovery with online advertising continuing to grow and the ever popular TV advertising rebounding. Even in time of security or financial crisis, digital business did not stop growing, but has continued to grow faster. In an economically cautious environment, people need to continue to grow their business, making people aware of their product while also cut-
Predicted adspend growth for 2011
Lebanon Jordan Kuwait Egypt
Bahrain UAE
Saudi Arabia
Oman
COLOUR indicates predicted growth in advertising spend for 2011 SIZE of circle proportional to predicted growth for advertising spend in 2011 Low growth
Negative growth
-10% to -20% -10% to 0%
0% to 5%
5% to 10%
Note: Figures are based on information from first quarter adspend results and predicted growth statistics supplied by media agencies
ting costs. In an economic slowdown, there are new opportunities for online advertising to develop. Even the revolutions in the Middle East can be considered a further push for the online advertising market.Those events have brought the internet and young people to the forefront of media and investor attention. We expect another boom in the online advertising market. There will be more pan-regional campaigns targeted at the 16 to 34-year-old age bracket and a greater use of Arabic content and social media. A rapidly growing broadband user base provides a digital media market ripe for development. The UAE is young, filled with talent, creativity, innovation and ideas and the best place for all these assets to express themselves is through the internet.
Coupled with rising internet user growth and bigger budget allocations, digital advertising, according to Google, is expected to grow by 45 per cent in 2011. Market watchers predict email marketing and social media will account for an increased share of total adspend in the coming years. Video is one of the fastestgrowing online categories globally. It makes up 40 per cent of global web traffic and, according to forecasts from Cisco, will exceed 91 per cent by 2014. Of the highest viewings of videos on YouTube, residents of the UAE, Saudi Arabia and Kuwait rank the highest. Many publishers are pinning their comeback hopes on their digital editions and on their growing penetration into mobile phone and tablet computer markets.
Widely seen as one of the world’s fastest emerging mobile and internet markets, it is estimated that the region’s mobile investments will be worth $35 million by 2015.The UAE’s phone penetration is the world’s highest at more than 230 per cent. Yet, currently, only 16 per cent of users also access the internet through their mobile phone. Whilst consumers anticipate the next generation of rich mobile services, the opportunity for advertisers that is provided by mobile is yet to be fully realised. With mobile growth rates set to outstrip those seen in the overall digital market in the next five years, marketing and media investments are expected to follow suit. The rise of digital media channels has placed much pressure upon the traditional
media and entertainment outlets in recent years. In the first quarter, total ad revenues in the UAE have seen a drop of 5 per cent from a year ago.Whilst the print sector has seen a drop of 10 per cent, the share of television sector has grown by 25 per cent along with the UAE’s flourishing radio segment. We believe print media will pick up soon, especially with the help of upcoming events in the UAE, such as Dubai Summer Surprises and Ramadan across the wider region. Overall, the latest consensus forecasts expect the Middle East advertising markets to continue to recover this year, despite the political unrest across much of the Middle East and North Africa.
Elie Haber is managing director of Mindshare UAE
19 June 2011
7
BAHRAIN
Advertising activity in the kingdom could take years to return to pre-protest levels
W
ith the world looking on at Bahrain’s antiregime demonstrations in February and March, which resulted in government forces cracking down on protestors to fatal effect, it’s hardly surprising that its media and marketing industry has been in a state of tumult since. The three-month state of emergency declared in April saw the expulsion of a number of Lebanese expatriates, plus the deportation of two Iraqi journalists working for Al Wasat newspaper, under the accusation of falsifying news. In response to the unrest, the opening race of this year’s Formula One season at the Bahrain circuit was cancelled, denting the economy with millions of dollars in lost revenue. According to figures published in the UK’s Daily Telegraph newspaper, 44,000 spectators paid a total of $14 million to watch F1’s opening round in Bahrain last year, even before the supplementary spending surrounding the event had been taken into account. ZenithOptimedia’s advertising expenditure forecast for the country this year reflects the uncertain backdrop. “We forecast a 19 per cent decline in spend this year after the protests and violence in March, which have left advertisers wary of attracting controversy and cautious about appearing in state-run media.” Findings from the Pan Arab Research Center (PARC) paint a similar picture. “The unrest took a heavy toll on advertising as measured spending plunged by around 21 per cent during the first quarter of the year. Spending showed a positive double-digit growth during the first two months of the year, [but] plummeted by 60 per cent in March 2011 as compared to [the] corresponding period last year.” Despite the challenging nature of Bahrain’s current climate, regular agency business has had to continue. Memac Ogilvy Bahrain’s managing director, Ghassan Boujacli, provides insight into the difficulties faced in April. “Certainly advertisers in Bahrain do not see the value of investing in marketing communications in
Advertising expenditure
Advertising expenditure by medium Media split, 2010
Previous years and forecasts. All figures in US$ million at current prices
Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Total 142.6 117.7 131.7 139.9 158.7 168.5 176.2 143.2 154.1 161.8
Newspapers 90.0 77.2 88.6 100.9 106.3 118.6 124.5 106.9 110.1 113.2
Magazines 7.5 9.4 10.9 12.4 21.2 13.9 13.2 11.6 12.4 13.6
TV 34.4 20.4 19.1 18.6 23.1 28.9 31.8 19.7 25.3 26.7
Cinema 1.8 1.9 1.9 1.8 2.1 2.4 2.6 2.0 2.3 3.3
Outdoor 8.9 8.9 11.2 6.1 6.0 4.7 4.0 3.0 4.0 5.0
Newspapers $124 million TV $31.8 million Magazines $13.2 million Outdoor $4 million Cinema $2.6 million Source: ZenithOptimedia
Source: ZenithOptimedia
the middle of the tension, where consumers are not in a frame of mind to absorb any marketing messages at the moment. Another element for companies not investing in marketing is the intention of saving the budget for later to see what will happen. Let alone the clients that are losing their A&P budgets due to the drop in sales and the poor performance in their businesses. One of the major impacts has resulted from the cancellation of Formula 1 and the Spring of Culture events. Usually the months of Feb/March become a hot season for advertisers, which increase their marketing investments to take advantage of the influx of people into the kingdom.” Clients aside, life within agencies has needed to adapt, says Boujacli. Due to the unrest the agency had to evacuate some expats to ensure their
safety, while business hours were reduced to almost a half day for one week. In addition, around 15 days of work were missed due to office closure to protect and safeguard the security and safety of employees during the high tensions of the demonstrations. As a result, the ability to think and consult was weakened considerably. At branding agency Unisono Bahrain, executive creative director Liam Farell,says:“While it’s been a challenging and disruptive time, our team are closer than ever and clients have been very supportive, including those overseas which is testament to our team’s commitment even in extreme situations. Ultimately, we need to work together – industry and clients. This challenge is really an opportunity to do something worthwhile and we are very optimistic about the next 12 months.”
Factfile Population
advertising spend
1,214,705 (2010 approx)
Al Ayam (26 per cent); Al Wasat (14 per cent); Akhbar Al Khaleej (13 per cent)
Population by gender
Males: 60 per cent Females 40 per cent GDP per capita
Average daily time spent online
$40,400 (2010 estimate)
6.5 hours
Restrictions & regulations
Liberal
Facebook/Twitter penetration
Three local TV stations
34 per cent (source: Global Arab Network)
Number of TV stations Penetration of pay-TV/ cable
5 per cent (estimate)
Number of radio stations
Broadband penetration
50 per cent
Mobile penetration
101 per cent
Three local radio stations
Most visited websites
20 minutes
Google, Yahoo!,YouTube, Maktoob, Facebook, MSN and Koora
10 dallies and three weeklies
12
Average daily time spent listening to radio Number of newspapers Average daily time spent reading newspapers
30 minutes
Top three newspapers by
Number of outdoor owners Number of cinemas
36 screens; 8 cinema halls Average cinema visits
Once a month
8
19 June 2011
EGYPT
WESTERN EUROPE
Revolution has led to drops in adspend, changes in media consumption and creative flair
H
ome to the Middle East’s largest advertising market, arguably its best creative talent, and the biggest single population base, if anyone was going to wish for business as usual this year it would have been in Egypt. The country’s adspend had grown significantly over the past five years from $244 million in 2006 to $1.2 billion in 2010, according to ZenithOptimedia, overtaking Saudi Arabia and catching up with the UAE in terms of dollars spent. Now it faces at least a 20 per cent drop in ad revenue, taking it below the billion-dollar mark for the first time in three years. The exact figure for the projected fall in adspend depends on which research you quote, but all agree that it will be at least a doubledigit drop, with advertisers slow to return, treading carefully and cautious about the messages they send out. Events in Tahrir Square, while helping to redefine the Arab geopolitical landscape, have impacted negatively on Egypt’s economy, and getting business back on its feet is a post-revolutionary priority. The economy, whose inequities and lack of opportunities helped provide the anger and frustration that toppled the government in January and February, has ground to a virtual halt. New foreign investment is on hold and the all-important tourist industry is in the doldrums. Steps are, however, being taken to boost the economy, which is now predicted to grow by 2 per cent this year instead of the projected 5 per cent.This month the country’s interim government agreed a $3 billion loan package with the International Monetary Fund to help stabilise the country’s finances during the post-Mubarak transition period, while the US has promised Egypt $1 billion in loan guarantees and a further $1 billion of debt cancellation. Meanwhile, the G8 will provide up to $10 billion in direct aid to both Egypt and Tunisia
Snapshot of the Egyptian market
– a sum that may well be matched by Gulf countries. Egypt’s advertising industry has been as badly affected as any sector. Figures released by the Pan Arab Research Center for the first quarter of this year painted a sorry picture. For the months January to March adspend fell 51 per cent, although Ipsos-Stat figures for the same period put the drop at just 3 per cent. Most, however, believe EMERGING EUROPE the industry will bounce quickly, with ZenithOptimedia predicting growth of 12.1 per cent in 2012. “The 25th January revolution caused a severely short-lived plunge in total business that was correlated to the political, economic and social halt during February,” says Karine Barakat, head of Starcom MediaVest Group Cairo. “But life in Egypt witnessed a strong comeback, and although the economy and political security are still picking up, there was a remarkable change in the media scene and consumer lifestyle, and advertising spend has been escalatPrevious years and forecasts. All figures in US$ million at current prices ing to levels higher than ever.” Year Total Newspapers Magazines TV Radio Karim Khouri, managing di2004 445 263 34 149 _ rector, Impact BBDO Cairo, 2005 205 98 12 94 _ holds a more sobering view. 2006 244 130 13 101 _ “The majority of sectors have 2007 385 256 28 101 _ been deeply affected by the revolution in the immediate 2008& AFRICA 646 486 40 119 _ MIDDLE EAST term. FMCG sales are in de2009 1,157 499 36 566 56 cline. Cars are not making it off 2010 1,243 519 32 629 64 the lot. Real estate sales are 2011 994 412 25 510 47 non-existent and customers 2012 1,114 454 26 583 51 are not making it into restau2013 1,225 496 27 646 56 rants and retail stores as often Source: ZenithOptimedia as they used to. While many marketers are inclined to wait out the upcoming period of uncertainty, most of our clients nication must be inspirational thing for the community or realise that a real opportunity and instill a sense of national champion a cause,” says Khouexists for them to strengthen pride without promoting any ri. “Some brands have mobitheir bond with their custom- political agenda, while there is lised their customers to clean ers now. The logic: increase also a sense of possibility in the streets of Cairo. Others your share of mind and share the air. Brand communication have vowed to eliminate illitof market today to ensure that must acknowledge this new- eracy in Egypt over the next five years. These are many exyou are in a better place than found optimism. Corporate social responsi- amples of CSR activities that your competitors tomorrow.” Whatever the impact of rev- bility is also taking a front seat. allow brands to align their valolution on the economy and “While many consumers are ues with those of their customadspend, the current situation looking for ways to participate ers, participate in improving requires marketers to fine- in the change that is occurring the community, and in so doing tune their marketing activities in the region, marketers are build brand equity and sales.” The biggest change, howevand be more tactful in their generally better equipped than tone, argues Khouri. Commu- their customers to do some- er, is occurring in media con-
ADVERTISING EXPENDITURE
Forecast growth Total
-20%
Newspapers
-20.6%
Magazines
-22.1%
TV
-18.9%
Radio
-26.3%
sumption and viewing habits (see Sahar Zoghby box). The 2nd Arab Social Media Report, published by the Dubai School of Government this month, argues that it “provides empirical evidence suggesting that the growth of social media in the region and the shift in usage trends have played a critical role in mobilisation, empowerment, shaping opinions, and influencing change”, most notably in Egypt and Tunisia (see page 26).“The power of social media has emerged
19 June 2011
CAESAR DIABLO
Perspective Sahar Zoghby managing director, FP7 Egypt
FACTFILE Population
82,079,636 (July 2011 estimate) Population by gender
Males: 49 per cent Females: 51 per cent GDP per capita
$6,200 (2010 estimate)
Restrictions & regulations
No alcohol and tobacco advertising Number of TV stations
24
Average daily time spent watching TV
8 hours
Penetration of pay-TV/cable
3 per cent (estimate)
Number of radio stations
22
Average daily time spent listening to radio
7 hours
Number of newspapers
46
Average daily time spent reading newspapers
1 hour
Significant newspapers
Al-Ahram (oldest newspaper in the Arab world); Al-Ahram Weekly (English language); Al-Jumhuriyah; Al-Akhbar; Al-Misri al-Yawm (English language); Al-Ahali; Al-Wafd; The Daily News Egypt Average daily time spent online
ADVERTISING EXPENDITURE BY MEDIUM Media split, 2010
1.85 hours
Number of Facebook users
7,558,780 (May, 2011) Facebook penetration
7.66 per cent
Number of Twitter users Newspapers $519 million
131,204 (April 2011) Twitter penetration
TV $629 million
0.15 per cent (April 2011) Broadband penetration
26.64 per cent Magazines $32 million
Mobile penetration
93.08 per cent
Most popular websites Radio $64 million
and is now an essential element in today’s media scene, while newspapers and magazines have taken a back seat, given the consumers’ need for hourly updates,” says Barakat. “Viewership trends have skewed towards political and social talk shows, and every Egyptian has become more aware of political and economic topics. Radio and outdoor advertising have become increasingly important, with people being stuck in traffic during the short curfew hours.”
Facebook, Google, YouTube, Yahoo!, Youm7, blogspot.com
Khouri adds: “Facebook, Twitter and bloggers like Wael Ghonim and Sandmonkey have allowed Egyptians to broadcast what they have been seeing, feeling and thinking directly from Tahrir Square. Social media has given power to the people and quite possibly redefined democracy as we know it in the Middle East. The impact of social media on the current political and economic climate has brought to light the power of the medium. Every single one of our clients recog-
nises social media as a new opportunity for dialogue with their consumers. A standard brand website is not effective anymore. Many of our clients have already been leveraging social media in their campaigns and communication.” If proof were needed, the revolution has also provided a palette for creative talent on the streets of Cairo. Artists, poets, musicians, and ordinary Egyptians are expressing their views, which can only benefit the advertising industry.
“Regardless of the different views about the major changes and critical events that have taken place – and are still taking place – in Egypt, new pages are being created and written in its history. Unfortunately, these positive changes are costing the nation heavily in the short term, both as an economy and as an industry in specific. Yet, all believe that tomorrow will definitely be a better day. Now, after four months of revolution and the sudden adrenaline rush of freedom of speech, we can summarise the impact of change on the advertising industry on the following few levels. Media consumption habits Egyptians have experienced a paradigm shift in their way of consuming media in general. TV has changed from a source of entertainment, where Arabic series and films were the highest viewership slots, into a source of news, where talk shows have become the hottest programmes. Local TV stations have lost all their lustre and people have moved towards satellite channels that provide more credible and objective news programmes and talk shows. Print has also witnessed a major change, with the two main publicly-owned newspapers, Ahram and Akhbar, losing a lot of their readership to two fairly new private papers, namely El-Masry El-Youm and El-Sherouq. Digital and online social media are booming because literate middle and upper class people up to the age of 45 are spending much more time on Facebook, Twitter and online news portals. Popular shows, programmes and key figures The emergence of a new breed of satellite channels, talk shows and hosts, and the downfall of previously successful ones has been a major phenomenon that the Egyptian media has witnessed. A major criteria in the rise and fall of those talk shows and hosts is their pre-revolution attitude towards the previous political system and figures. We now have around 10 to 12 talk shows among different channels, old and new. This has resulted in a lot of media fragmentation until more viewership trends are achieved. Advertising spending patterns and budgets Major budget cuts and a slowing down across the whole industry has taken place due to reasons of cost control, with an average 40 per cent reduction on last year’s figures. TV media spending in February was 20 per cent versus February last year, although this rose to 30 per cent in March and 45 per cent in May. It is expected to reach 60 to 70 per cent from Ramadan onwards. The media that suffered most was outdoor, while digital and online boomed. Active spending categories Carbonated soft drinks, FMCGs, financial and retail services, ISPs and telecom operators are the advertisers who are coming back but not with the standard budget/pace/extent usually seen in these months of the year. Heavy goods, white goods and the automotive industries, as well as real estate, have negligible advertising activity. Any product that entails a meduim or big out-of-pocket investment from consumers have not yet been encouraged to invest in communication. Creative message and content Change has affected communication messages and content. Some big multinational brands have adopted patriotic ‘rebuilding Egypt’ messages, or the positive and optimistic ambassador/inspirer approach. Others played it tactically with price reductions, while some others maintained the same old advertising material. The outlook today might be tough and gloomy, but tomorrow looks quite positive. Agencies need to be proactive and try to create new communication messages and initiatives for their clients, utilising the patriotic sense of pride as well as the insightful values that re-emerged during the revolution among Egyptians. We must encourage our clients to advertise and capture the high attention consumers are giving to media, and develop new messages that not show only the playful mindset of the youthful consumer but also take on board the positive attitude and risk they took to create change.”
9
10
19 June 2011
IRAQ
A growing economy is attracting agencies, but Iraq is not for the faint-hearted
W
ith huge oil wealth, predictions of double digit growth in 2011, and one of the Middle East’s largest populations, Iraq is finally moving up the agenda for companies looking at new and emerging markets. That, at least, is the appraisal of James Starkie, business development manager at YouGov Siraj. The only problem is that large parts of the country are unstable and Iraq is still perceived as dangerous, although an improved security situation and foreign investment are helping to spur economic activity, particularly in the energy, construction, and retail sectors. Iraq achieved a major political milestone in December last year when it formed a cabinet led by prime minister Nouri alMaliki, but political progress is expected to remain slow and stability fragile. Even in such uncertain circumstances, the country’s economy is expected to post healthy rates of growth over the medium term, expanding an average of 6.3 per cent per year up until 2015. “The potential of Iraq’s economy is unquestionable,” admits Starkie. “However, despite holding the world’s fourth largest proven oil reserves, for some companies Iraq remains a step too far.” Some agencies, however, are dipping their toes in the water. Leo Burnett is now operational in Erbil and Sulaymaniya following its winning of the Asiacell account. It has since added General Motors and Philip Morris to its roster of clients in the country. “Iraq represents a significant opportunity for growth within the region, and we have positioned ourselves to take part of this opportunity,” admits Kamil Kuran, Leo Burnett’s managing director for the Levant. Although foreign investors are beginning to view Iraq with increasing interest, broader economic improvement, longterm fiscal health, and sustained increases in the standard of living depend on the government passing major policy reforms and on continued development of Iraq’s massive oil reserves.What’s more,disputes between Baghdad and the Kurdistan Regional Govern-
Top TV stations by advertising expenditure
Advertising expenditure by medium
50
120
Source: Stat Ipsos
100
40
80
30
60
20
40
10
20
0
Source: Stat Ipsos
0 Al Sharqiya
Al Iraqiya Al Sumaria
Al Furat
2009
ment do little to promote foreign investment. Adspend is still low considering Iraq’s population of 30 million, with a total of $118 million spent in 2010, according to Stat Ipsos. The first quarter of 2011, however, has provided positive news, with adspend already hitting $52 million. Despite relatively low adspend levels, the media scene in Iraq has been transformed since 2003. According to Cornerstone Global Associates, the semi-governmental Iraq Media Net operates a number of TV and radio stations, including the main government channel, Al Iraqiya. In addition, there are more than 30 TV stations and in excess of 100 radio stations, some commercial in nature, but almost all with either clear or implied ethno-religious affiliation. Al Sharqiya is the largest private secular channel and is believed
Al Baghdadia Aghanina
Kurdsat
Kurdstan
Zakros
TV
2010
to be the most widely watched TV station. Indeed, TV is the most popular medium, accounting for the majority of adspend. For example, in 2010 TV adspend stood at $116 million. “The internet, which was banned under Saddam’s regime, has witnessed steep growth since 2003, although penetration may still be considered low,” says Starkie. “In a survey of 1,561 Iraqis conducted by YouGov Siraj last year, 22 per cent of respondents said they ‘had ever used the internet’, with 6 per cent using the internet more than once a day. “Reliable data is hard to come by in Iraq,which given the security concerns, few stakeholders will have visited. Undoubtedly the media market, as with the rest of Iraq’s economy, will grow. The only question is how quickly and what shape that market will take.”
Newspapers 2008
2009
Magazines 2010
Factfile Population Population by gender
young Iraqis and as such the number of people online is believed to be far higher than official figures suggest)
Males: 49 per cent Females: 51 per c ent
Number of Facebook users
806,320
$3,600 (2010 estimate)
2.24 per cent
In descending order: MBC1, Al Iraqia, MBC2, Al Sharqiya, MBC4, Rotana Cinema, Al Anwar, Al Sumariya, MBC Action
21,625
Top newspapers by advertising expenditure
Google, YouTube, Facebook, 4Shared, Yahoo!’ MSN, Maktoob, Koora, Mediafire
Assabah, Azzaman, Khabat, Eye on Iraq, Al-Mashriq, Evro, Kurdistany Nwe
Top internet activities
Email, search, news, downloads and chat
58 per cent
The BBC, Paris-based Monte Carlo Doualiya radio, and US-backed Al-Hurra TV, Radio Sawa and Radio Free Iraq all broadcast in the country
30,399,572 (July 2011 estimate)
GDP per capita
Top 10 TV stations by GRP
Mobile penetration
Internet penetration
1.1 per cent (internet cafes have contributed to extensive usage among
Facebook penetration Number of Twitter users Twitter penetration
0.07 per cent
Most visited websites
Foreign broadcasters
19 June 2011
11
JORDAN
Entry to the GCC could provide a much needed fillip for the country’s strained market
W
hile not affected as badly as its neighbours in Syria and Egypt by political upheaval, the Hashemite Kingdom has experienced some levels of civil unrest, adding pressure to an already strained economic situation. Well before the first demonstrator gathered, total adspend in 2010 was already down to $320 million, representing a drop of 2.15 per cent on 2009’s $327 million, according to figures supplied by Mindshare. Meanwhile, the Pan Arab Research Center (PARC) has reported a 21 per cent fall in adspend for the first quarter of 2011. Jordan’s economy is not as developed as others in the region and despite a skilled and educated human resources pool to exploit, its estimated $5,400 GDP per capita during 2010 is one of the region’s lowest. While political issues have led to contraction in adspend, there has been some activity in the agency marketplace, with Memac Ogilvy Jordan merging with Amman-based independent outfit Advize. Now called Memac Ogilvy Advize, the collaboration effectively doubled the size of both parties. There have been no other recent mergers or acquisitions of note, although this is expected to change as stability returns. “On the business front, things are slow, taking into consideration the circumstances in neighbouring countries,” says Huzam Al Zu’bi, business unit director of DDB Jordan.“Clients are being conservative in their budgets and aggressiveness. In a way, clients are in ‘pause’ mode,” he adds. According to Al Zu’bi, there is a lack of service-oriented people able to lead an agency’s client services, while clients are focused on price against service and creativity, leading to price wars between agencies desperate to attract ad dollars. According to figures from the Pan Arab Research Center, during 2010 telecoms ruled the roost as the top three advertisers in Jordan were Orange ($6 million), Umniah ($4.8 million) and Zain ($4.5 million). When it comes to adspend by sector, print media by far represents the largest ad dollar
Advertising expenditure
Advertising expenditure by medium
300
Source: Mindshare
Media split, 2010
250 200
Newspapers $235 million
150 Radio $42 million
100
TV $26 million
50 0
2008 Newspapers
2009 Radio
magnet, according to figures supplied by Mindshare. Of 2010’s total spend, around $235 million went on print ads, which equates to approximately 73.4 per cent. There are 29 newspapers in the kingdom, with the top three titles in terms of adspend being Al Rai (26 per cent), Al Ghad (19 per cent), followed by Ad Dustour (15 per cent). Radio is the next popular medium with advertisers, attracting $42 million in 2010, an increase of $4 million on 2009. Surprisingly, TV only attracted $26 million of spend in 2010, a poor showing for this medium in comparison to other regional markets.The channel attracting the most ad revenue is the government-owned JTV, with a 49 per cent share of the market. Outdoor spend was a lowly $17 million in 2010, although there are municipality restrictions on outdoor infrastructure. Figures
TV
Outdoor $17 million
2010 Outdoor
for online spend are scarce and unreliable. It’s not all doom and gloom for Jordan, though, as the lull in business stemming from its political issues and its neighbours may be mitigated by news that Jordan is expected to join the Gulf Cooperation Council. Membership would provide a much-needed fillip to its creative marketplace. Farida Shakhshir, country manager Y&R Jordan, believes growth will come from new media. “In Jordan there are over one million users of Facebook alone, opening the door for tremendous opportunities for brands to engage with consumers and become part of the conversation. Mobile internet usage is also growing in Jordan due to the presence of multiple providers and competitive packages, with growth projected to come from mobile sites and mobile applications.”
Source: Mindshare
Factfile Population Population by gender
are not allowed. Images containing female figures should be executed decently
Males: 51.4 per cent Females: 48.6 per cent
12
6,407,085 (2010 approx)
GDP per capita
$5,400 (2010 estimate)
Restrictions & regulations
In general Jordan is a conservative market. All ads across all types of media are expected to respect the Jordanian Islamic culture. Cigarette and pharmaceutical drug advertising is prohibited and political and religious connotations are not allowed in any advertising message. Magazines are more flexible than other media in accepting some “daring” advertising (alcohol, lingerie, etc). Strict regulations on outdoor media implemented by Amman Municipality. Building wraps
Number of TV stations
Average daily time spent watching TV
264 minutes
Penetration of pay-TV/ cable
20.3 per cent
Number of radio stations
34
Average daily time spent listening to radio
36 minutes
Number of newspapers
29
Average daily time spent reading newspapers
15-30 minutes
Average daily time spent online 72 Minutes Facebook/Twitter penetration About 32 per cent
19 June 2011
13
KUWAIT
The country’s advertising industry is growing, but creatively Kuwait is being left behind WATANIYA AIRWAYS – CREATIVE BY JWT KUWAIT
T
his small emirate of 2.8 million people punches well above its economic weight. A major OPEC producer, timely government intervention funded by revenues from Kuwait’s large hydrocarbons deposits ensured that the country was well insulated from the worst of the economic downturn. Eli Bouchaaya, creative director at Memac Ogilvy Kuwait, says Kuwait’s troubles were more psychological than actual. However, he argues that “advertising in Kuwait did take a beating because of the illusion the global economic crisis created in the advertising market”.The prospects for this year, however, are “bright”. Indeed, ZenithOptimedia predicts that advertising spend in the country will grow by 5.9 per cent this year, with steady rises expected across all media. Those predictions appear to be on track if Pan Arab Research Center (PARC) adspend figures for January to March this year are to be believed. Adspend increased by one per cent year-on-year to $233 million, although industry watchers believe that – creatively speaking – there is massive room for improvement. Kamal Dimachkie, Leo Burnett’s managing director for Kuwait & the Lower Gulf, says: “The Kuwait ad industry seems to be in search of direction, a groove and commitment to move forward. It is an industry that seems to be stuck in some sort of a vortex that prevents it from leaping forward and giving rein to its potential.” This creative conservatism is reflected in the tale of spend by media. Print reigns supreme in the emirate, with newspapers and magazines combined attracting $144 million of spend in the first quarter, or 62 per cent of the total. This represents a growth of 6.25 per cent from the $135 million spent during the same period in 2010, according to PARC. Although television also does well in Kuwait, with advertisers handing over $83 million, in the first quarter, this figure represents a 7 per cent drop for the same period in 2010. Market share of other media is miniscule in comparison, with
Advertising expenditure
Advertising expenditure by medium Media split, 2010
Previous years and forecasts. All figures in US$ million at current prices
Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Total 335 395 477 501 704 823 857 908 947 982
Newspapers 250 284 343 378 479 460 478 506 529 550
Magazines 37 41 47 57 62 55 46 49 52 53
TV 14 18 25 18 124 266 287 306 319 332
Cinema 5 5 7 10 9 11 11 12 12 12
Outdoor 29 46 56 39 30 32 33 35 35 36
Newspapers $478 million TV $287 million Magazines $46 million Outdoor $33 million Radio $11 million Source: ZenithOptimedia
Source: ZenithOptimedia
radio and outdoor each garnering a mere 1 per cent each, or $3 million apiece in 2011’s first quarter. While no hard data is available for online spend, Kuwait’s young and tech-savvy demographic and high mobile penetration means that the digital ad market has massive potential. As of last month, according to Spot On, Kuwait had just under 800,000 Facebook users, a 60 per cent growth from the 500,000 recorded in May 2010. Of this total, 73 per cent use the English version, with 27 per cent using the Arabic platform. Internet penetration is currently around 39.4 per cent. Kuwait also hosted its first Social Media Forum in March, demonstrating a commitment to new media and communication systems among consumers and industry. Zain Kuwait also recently launched a mobile-specific ad platform called
AdZone. It will allow advertisers to connect with consumers based on their geographical location and, when combined with the 129 per cent mobile penetration in the country, means that Kuwait could lead the field. The top advertising spender in the country for the first quarter was telecoms giant Zain, shelling out $11 million. McDonald’s was the next largest spender, with $5.2 million across all channels in the same timeframe. Kuwait has mostly enjoyed political stability, with the unrest of the Arab Spring absent from its shores. That’s not to say it is immune though, with recent reports of rebellion by MPs who accuse senior members of the ruling Al-Sabah family of mismanagement of public funds, corruption and inefficiency threatening a phase of disquiet and tension.
Factfile Population
2,789,132 (2010 estimate)
Average daily time spent listening to radio
Males: 60.03 per cent Females 39.97 per cent
Top radio stations by advertising spend
Population by gender GDP per capita
$37,489 (2010 estimate)
Restrictions & regulations
No religious connotations and references are allowed. Politics must be avoided and advertising must adhere to cultural and religious norms Number of TV stations
Six primary channels
Top TV stations by advertising spend
Watan TV (36 per cent); Rai TV (32 per cent); Funoun TV (28 per cent) Average daily time spent watching TV
Three hours
Marina FM (82.63 per cent); Kuwait Radio Arabic Song (9.8 per cent); Kuwait Radio Super Station (7.5 per cent) Number of newspapers
19 dallies and 11 weeklies Top three newspapers by advertising spend
Al Watan (25 per cent); Al Rai (19 per cent); Al Anba (13 per cent) Broadband penetration
3.4 per cent
Mobile penetration
129.9 per cent
Most visited websites
4.99 hours
Google, YouTube, Facebook, Live.com, Yahoo.com
Three commercial stations
55
Number of radio stations
Number of cinema screens
14
19 June 2011
LEBANON
Once again, after promising so much, Lebanon’s adland may be about to fall foul of instability
I
n theory, Lebanon should be at the top of its game. Last year was one of the best ever for the advertising industry (if not the best), confidence was high and predictions for the year ahead were positive. Yet a grey cloud is threatening to descend on the ad industry’s collective consciousness. Unrest across the Arab world has combined with a government void in Lebanon and upheaval in Syria to wipe the smile off most faces. This is only compounded by widely divergent and contradictory information with regards to ad expenditure, which means all adspend figures have to be taken either with a pinch of salt or disregarded altogether. “2010 was a record year for the advertising industry in Lebanon,” says Naji Boulos, managing director of Memac Ogilvy Lebanon and president of the IAA’s Lebanon chapter. “High hopes were put on 2011. However, with the collapse of the government in January and the turmoil affecting the region, the first quarter of the year did not start on a high note.Lebanon,with a relatively stable situation compared to some Arab countries, did not benefit from the regional crisis. “While 2010 witnessed an increase of 17 per cent in the number of tourists (exceeding for the first time the bar of two million tourists), the first quarter of 2011 showed a drop of 14 per cent compared with the same period last year. Consequently, the average occupancy rate at hotels in Beirut was 47 per cent in the first quarter compared with 69 per cent during the same period last year. This situation has affected the advertising industry, with business witnessing a drop of 15 per cent during the first four months of the year.” Boulos is not alone in his thoughts. Wilson Issa, general manager of VivaKi Levant, speaks with a similar tone. “The Middle East unrest is casting a bad spell on the advertising industry,” he admits. “Some categories were direct-
ly affected and decreased investment within the first half of 2011, such as automotive, travel and tourism, while other categories like FMCGs, electronics and technologies are just being caught by the heat of the regional turmoil and are split between investing to build awareness and equity, or promoting hard sell promotions to increase off-take and sales. “For some marketers it is unclear what the second half of 2011 will look like. [But] recent history here in Lebanon has taught many marketers to turn instability and turmoil into a window of opportunity to improve on media, trade, and business benefits.” Despite ZenithOptimedia predicting that adspend will increase by 5.8 per cent this year (a figure that may be reduced in July), and the Pan Arab Research Center’s assertion that advertising expenditure grew by 7 per cent during the first quarter of the year, economic indicators point in the other direction. The latest report from the Economist Intelligence Unit (EIU) has downgraded Lebanon’s predicted real GDP growth for 2011 to 1.3 per cent from an estimated 7.5 per cent in 2010. The downgrade is in light of political unrest domestically and across the Arab world.The report also noted that Lebanon’s economy is highly dependent on the services sector, the fortunes of which in turn depend on political stability. Politically stable is not something Lebanon has been during the first six months of the year. In January, Hezbollah withdrew its ministers from the government of Prime Minister Saad Hariri, leaving the country without a government for five months and prompting fears of sectarian violence.This month Lebanon’s new Prime Minister, Najib Mikati, announced the make up of a new government, which is now dominated by Hezbollah and its allies, but the future remains uncertain. Accusations that the new cabinet is “a cabinet
Snapshot of the Lebanese market WESTERN EUROPE
EMERGING EUROPE
ADVERTISING EXPENDITURE Forecast growth
Previous years and forecasts. All figures in US$ million at current prices
Year Total Newspapers Magazines 2005 500.6 46.1 36.4 2006 443.2 42.1 31.7 2007 570.4 40.8 34 2008 770.3 47.5 40.1 MIDDLE EAST & AFRICA 45.7 2009 966.2 62.2 2010 1,223.8 71.5 54.0 2011 1,295 68.4 52.6 2012 1,365.2 69.6 50.3 2013 1,427.5 70.6 49.8
TV 314.5 265 389.2 560.8 746.3 970.1 1,044.8 1,119.4 1,182
Radio 26.8 29.5 25.4 26.6 9.1 7.3 8.2 7.8 7.6
Cinema 5.9 6.4 3.6 5.6 1.3 1.0 1.2 1.2 1.3
Outdoor 70.9 68.6 77.5 89.8 101.6 119.9 119.9 116.8 116.2
Total
5.8%
Newspapers
-4.3%
Magazines
-2.5%
TV
7.7%
Radio
12.5%
Source: ZenithOptimedia
of confrontation with the international community” don’t help the situation. “Until developments in the region start making sense, Lebanon will be in a freeze mode for any tangible speculations,” says Eli Khoury, M&C Saatchi’s CEO for the MENA region.“Though medium-term indications provide grounds for Beirut becoming the hub once again, especially for the Levant and North Africa.” Lebanon has often dreamt of reclaiming its crown as the hub
of Middle East advertising – a title it relinquished to Dubai a long time ago. But if you work in Middle East advertising, it’s impossible to ignore Lebanon. The reasons for this are manifold, but boil down to Beirut’s heritage and to the unavoidable fact that the vast majority of professionals working in the industry across the region are Lebanese.A lot of Beirut’s success in creating the industry’s personnel, of course, is down to practicalities. While universities and colleges in the Gulf
are obsessed with business and banking, advertising is taught as a degree subject in its own right in five leading universities in Lebanon, and there is annual growth in the number of students majoring in advertising. What’s more, Lebanese students generally speak three languages and these students constitute a national reservoir of talent for the region. To be in Lebanon last year was to witness a surge in confidence, a return of expats and, for once, a sustained period of
‘KEEP WALKING LEBANON’– LEO BURNETT BEIRUT
19 June 2011
FACTFILE Population
4,143,101 (July 2011 estimate) Population by gender
Males: 49 per cent Females: 51 per cent GDP per capita
$14,400 (2010 estimate)
Restrictions & regulations
All TV copies should be controlled and approved by general security before airing. Lebanese general security might reject all copies that: oppose public order; contradict moral standards; feature provocative scenes. For outdoor, all layouts should get the approval of the general security. Comparative advertising is not allowed. Number of TV stations
10
Top TV stations by adspend
MTV (40 per cent); LBCI (31 per cent); Al Jadeed (29 per cent)
Top TV stations by GRP
LBCI, Al Jadeed, MTV
Average daily time spent watching TV
480 minutes
Number of radio stations
16
Top radio stations by adspend
Sawt Al Ghad (16 per cent); Mix FM (13 per cent); Rotana Delta (10 per cent) Number of newspapers
ADVERTISING EXPENDITURE BY MEDIUM Media split, 2010
TV $970.1 million Outdoor $119.9 million
17
Top newspapers by adspend
An Nahar (9 per cent); Al Balad (8 per cent); L’Orient le Jour (5 per cent) Mobile penetration
47 per cent
Game console penetration
24 per cent
Average daily time spent online Magazines $54 million
1 hour
Number of Facebook users
Newspapers $71.5 million
1,166,140
Radio $7.3 million
25 per cent
Cinema $1 million
1.85 per cent (April 2011)
economic growth. It would be a shame if such a situation was to disappear and Lebanon was to return to its historical role as an eternal underperformer riven by sectarianism and political chaos. But the country has three solid years of advertising growth behind it – growth that available research believes will continue throughout 2011, despite the knowledge that, as has been proven so many times in the past, it could all go horribly wrong. “Despite the local political
Facebook penetration Twitter penetration
inertia, the economic crisis, the real estate, touristic and hospitality slow down, and the advertising expenditure decrease over the past two months, there’s light at the end of the tunnel,” believes Nada Abi Saleh, deputy managing director of Leo Burnett Beirut. “Actually, it has always been the case in the advertising industry. The confidence level is still relatively strong and the market is witnessing increased spending and activities in new categories such as dairy prod-
ucts and energy drinks and higher competition within categories such as confectionary and banking, compensating for the drop in other sectors. In addition, talent is still extremely attracted towards Lebanon and the advertising industry in particular, as evidenced by the number of CVs that keep on landing on the HR’s desk.” Whatever happens on a wider political and economic level, business will have to continue for the ad industry. “The absolute truth of 2011 is that
people within this region are coming together in different communities, sharing ideas and experiences,” states Issa. “They became more expressive and highly vocal. It is important to establish some good effort behind ‘listening’ to what people have to say. “If those fuelled conversations brought down established regimes; imagine what they can do to brands. It is inevitable that consumers became endorsers and not just simple buyers, and brands needs to get more involved and hand them a currency to exchange beyond the simple product benefit. So the usual ‘been there… done that’ might not apply this time and ‘listening’ might be the ideal tool to push further your credentials, grow your business and stretch back margins.” Lebanon’s digital advance, however, has so far been kneecapped by what is often described as the “world’s slowest internet”. There don’t appear to be any solutions on the horizon, with internet penetration a lowly 24.2 per cent. As a result, the penetration of social networking sites is also limited. Facebook penetration is only 25 per cent, while Twitter’s is a lowly 1.85 per cent. “These are very challenging times for agencies to find new ways of connecting and touching people and, most importantly, coming up with something truly inspiring,” says Ramzi Barakat, founder of boutique agency B, Lebanon. “The internet makes a great ad look thin, or shallow, or obsolete or just an ad. Some viral ads are still TV ads camouflaged as viral. So we are completely immersed within the revolution. Frankly, I am a fan of good advertising, but I’m finding it harder and harder to find inspiring work. Maybe this is the end of advertising as we know it?” At present, the country’s media landscape remains very much dominated by television. TV took 79.3 per cent of all advertising spend in Lebanon in 2010, according to ZenithOptimeda. Benefiting the most were channels such as LBC and MTV Lebanon. Figures from the Pan Arab Research Center for the first quarter of the year confirm TV’s dominance, with the medium taking $67 million out of total ad-
15
spend for January to March of $103 million. In second place is outdoor. Beirut is a famously cluttered outdoor ad market and the number of billboards remains too high for such a small country. Apart from the fact that it represents urban pollution, outdoor also stands accused of creating chaos in the advertising industry. In such a cluttered market, creativity is of paramount importance if advertising is to stand out. Yet digital signs, screens, Bluetooth messaging and various other forms of new outdoor are yet to make headway in Lebanon. “The outdoor industry has witnessed some timid improvements to regulate the sector,” says Boulos. “Municipalities across the country began removing unlicensed roadside billboards following Minister of Interior Ziyad Baroud’s decision to clamp down on the illegal advertisements. After the recent resignation of Minister Baroud, this initiative will be most probably and unfortunately stopped.” “Every problem brings a set of opportunities,” says Joe Ayoub, CEO, Spidermonkey. “This is how I can describe the state of the Lebanese market today. The regional crisis has put a lot of pressure on local advertisers to seek more cost effective marketing initiatives which, in turn, translated into renewed pressure on advertising agencies to find the appropriate solutions.” Yet, despite what’s happening, Lebanon will, in all probability, carry on regardless. “For Lebanon instability is stability,” says Abi Saleh.“We, as well as our clients, have learnt to live with explosions, demonstrations and not having a government. We just can’t put our lives on hold every time someone burns a tire on the street and have adapted to survive during these trying times. This is why while hell was breaking loose on Lebanon – and on the advertising industry – our campaigns were still running on TV and our visuals still posted on the streets. Some people call it the Lebanese miracle. Others call it resilience. The rest are still searching for an answer. Now that the Middle East is in turmoil, Lebanon is calm. Bizarre? Not bizarre at all. Just business as usual, irrespective of what’s happening.”
16
19 June 2011
OMAN
The sultanate’s adland faces an unpredictable year following sporadic unrest TBWA\ZEENAH AD FOR MITSUBISHI
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apturing the tail wind of tumult elsewhere in the region, Oman’s status as the Gulf’s most relaxed and friendly destination received a jolt this spring when protestors in the northern industrial city of Sohar staged demonstrations demanding better wages, more jobs and an end to corruption. A swift government response nipped further unrest in the bud, though the city of Salalah also experienced similar protests. Despite escaping relatively unscathed in comparison to other countries in the region, its small media market that subsists largely on government-led entities has undoubtedly felt the ripple of regional uncertainty. Yet the limited data available reflects something of a conflict in opinions as regards its overall health. ZenithOptimedia’s predicted outlook for 2011 is pessimistic, with year-on-year figures reflecting a 19 per cent drop in total expenditure when comparing this year to last – 2010 raking in an all-time high of $163.9 million, while 2011 is expected to reflect a more sluggish $133 million – the lion’s share of which is deployed in newspapers, which enjoy 85.4 per cent of the available market. Zenith’s prognosis concludes: “We forecast a 19 per cent decline in spend this year after the protests and violence in March, which have left advertisers wary of attracting controversy and cautious about appearing in state-run media. Already suffering from economic slowdown, Oman’s ad market is likely to manage only a slow recovery in 2012 and 2013.” Meanwhile, the Pan Arab Research Centre (PARC) picture looks a little rosier. Their figures, which reflect the performance of the market in the first quarter of 2011, show advertising spending reached $71 million, up from $62 million for the same period in 2010 and a growth of 14 per cent.They also show newspaper’s dominance in the arena, with their figures claiming an 88 per cent share for the medium – up by 13 per cent. Television also gains with what is described as a 30 per cent surge in spending, giving
Advertising expenditure
Advertising expenditure by medium Media split, 2010
Previous years and forecasts. All figures in US$ million at current prices
Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Total 76.3 81.2 87.9 100.9 137 150.3 163.9 133 137 143.9
Newspapers 49.5 61.4 69.5 80.1 117.3 127.3 140 113.6 116 120.8
Magazines 3.1 2.2 1.3 2.9 3.3 7.9 9.5 7.4 7.6 7.8
TV 23.6 17.6 14.1 13.2 10.7 9.2 8.3 6.3 7.4 8.7
Outdoor _ _ 3.0 4.7 5.7 5.9 6.1 5.8 6.1 6.6
Newspapers $140 million
Magazines $9.5 million TV $8.3 million Outdoor $6.1 million Source: ZenithOptimedia
Source: ZenithOptimedia
it a 7 per cent share of the total media spend. Magazines, on the other hand, suffer a 15 per cent drop. Across the board, government institutions make up the biggest advertisers, contributing 46 per cent of the total spend. Financial services take second place with an 8 per cent contribution. Mohamed Al Farei, group general manager at Muscatbased TBWA\Zeenah, maintains the outlook is positive. “Like any business, advertising operates in an uncertain and changing world. And having undergone two years of a highly challenging period for the industry in Oman – impacted by global recessionary pressures – no one could have anticipated the events of earlier this year as we experienced our own ‘Omani Spring’. “But the most important aspect of the protests, demonstrations and scenes witnessed
in the Sultanate has been the speed and decisive action from the government.” The action – at a political level and through the commitment to creating 50,000 new jobs for Omanis and improving salaries – is expected to show real benefits to individuals and organisations. “There is no doubt that we have seen challenging times in the recent past,” admits Al Farei. “But we are now witnessing a slow recovery and we remain confident about the underlying trends for the long term. Overall, it is clear that the recent situation in Oman has in fact left investors here with more confidence about the maturity and stability of the Omani political scene, which is a very positive reflection on the state of our economy here and will help instill confidence in a speedy recovery for the country’s economy.”
Factfile Population
3,027,959 (July 2011 estimate) Population by gender
Males: 58 per cent Females 42 per cent GDP per capita
$25,600 (2010 estimate) TV stations
State-run TV broadcaster, Oman TV Top TV stations by GRP
Oman TV, MBC1, Al Jazeera, MBC4, MBC2, Al Arabiya, Asianet, MBC Action Significant newspapers
Al-Watan, Oman Daily, Oman Observer (English language), Times of Oman (English language), Muscat Daily (English language) Top newspapers by advertising spend
In descending order: Al Watan, Al Shabiba, Times of
Oman, Oman Daily, Oman Tribune, Oman Daily Observer, Al Youm Al Sabe, The Week, H!, Kooooora Wa Bas Radio stations
Radio Oman (state-run, operates Arabic and Englishlanguage networks); Hala FM (private); Al-Wisal (private); Hi FM (private, English language) Broadband penetration
2 per cent
Mobile penetration
117 per cent
Number of cinema screens
18
Number of Facebook users
274,900
Twitter penetration
0.23 per cent (April 2011) Most visited websites
Google, YouTube, Facebook, windowslive, S-oman, Yahoo!, MSN, Maktoob, Koora
19 June 2011
17
QATAR
Although buoyed by its Fifa World Cup bid, Qatar’s ad industry remains undervalued QATAR’S PLANNED LUSAIL ICONIC STADIUM FOR THE FIFA 2022 WORLD CUP
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eft unscathed by the political ructions of the Arab revolutions, and buoyed by a winning 2022 Fifa World Cup bid that has accelerated activity in its construction and investment sectors, Qatar’s star certainly seems to be in the ascendant. Having historically been tagged as the sleepiest of the Gulf states, it has sought to punch above its weight in media terms as the home of the Al Jazeera network, although accusations that it “bought” the World Cup have dented its reputation. In light of its recent elevation to the world stage, it would be tempting to presume that the future of Qatar’s advertising industry looks unremittingly bright, yet ZenithOptimedia’s forecast for the country remains cautious. Year-on-year advertising expenditure may have increased by 8.6 per cent in 2010, but it is predicted to slow to 1.1 per cent in 2011, a trend expected to continue until 2013. The Pan Arab Research Center tempers this with first quarter adspend figures for 2011 that report an increase of 7 per cent on last year. ZenithOptimedia’s forecast also highlights the endemic weaknesses within the Qatari market. “Qatar’s ad market is dominated by newspapers, which held a 92.2 per cent share of the market in 2010. TV in Qatar has an extremely small market share compared to most media markets, accounting for just 3.4 per cent of ad expenditure in 2010; this is mainly due to viewers’ preference for pan-Arab satellite channels over local television.” While Qatar undoubtedly represents a market of high potential, it will take a collaborative effort between advertisers, agencies and media houses to ensure it reaches the fullness of its capabilities, says Ramzi Raad, chairman,TBWA\Raad. “The tripartite that is at the heart of Qatar’s communication industry needs to wake up and treat its market with professionalism and passion; otherwise it is at risk of allowing this market – of great potential – to slip into a back seat,” he says. Raad points out that Qatar’s GDP per capita was ranked second globally in 2010,
Advertising expenditure
Advertising expenditure by medium Media split, 2010
Previous years and forecasts. All figures in US$ million at current prices
Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Total 88.8 94.4 172.2 188.6 215.5 239.8 260.4 263.3 266.1 268.9
Newspapers 81.2 86.7 157.3 168.8 191.7 218.3 240.1 242.3 244.5 246.7
Magazines 0.0 0.5 0.5 1.2 1.8 6.2 6.8 6.9 7.0 7.0
TV 7.2 5.6 9.0 13.4 16.2 11.0 8.8 9.4 9.9 10.4
Cinema 0.4 0.9 2.4 1.8 1.6 _ _ _ _ _
Outdoor _ 0.7 3.0 3.3 4.3 4.3 4.7 4.7 4.8 4.8
Newspapers $240.1 million
Magazines $6.8 million
TV $8.8 million Outdoor $4.7 million Source: ZenithOptimedia
Source: ZenithOptimedia
while the contribution of its advertising sector to its GDP during the same year was only 0.0001 per cent. This is to be compared with 0.0009 per cent for the UAE, 0.0011 per cent for Saudi Arabia and 0.00047 per cent for Egypt. “The advertising sector remains a very minor contributor to Qatar’s ever-growing GDP at a time when the country is very busy launching products and services – locally as well as globally – all needing very active promotional support,” says Raad. But from a media owner’s point of view, the recent advancements made by the industry represent the initial stages of growth that will continue steadily as the nation works towards its 2022 World Cup deadline. Ravi Raman, vice president, Oryx advertising, Qatar’s oldest publisher, which produces Qatar Today and Glam magazines, amongst
others, says: “Earlier the small size of the market was a deterrent to many brands but today the high purchasing power and the race to be in the ‘next big market’ is enticing them. The successful Fifa 2022 bid has made everybody sit up and take notice.Apart from the obvious investments in sporting facilities and stadia, the country’s total infrastructure is getting a boost. In addition to the spanking new airport and metro, Qatar will have new malls, hotels, museums and other places of leisure which should increase the number of visitors substantially. This will grow the overall market and increase media spends. “The recent upheaval in the region and Qatar’s solid position have made marketers restrategise and turn their attention here.The coming few years look challenging and exciting for Qatar’s media industry.”
Factfile Population
848,016 (July 2011 estimate)
Top newspapers by advertising spend
Males: 62 per cent Females 38 per cent
Al-Sharq, Arrayah, Al Watan, Gulf Times, The Peninsula, Qatar Tribune, Al Arab, Al Waseet Doha
$179,000 (2010 estimate)
8 per cent
Al Jazeera (bouquet includes Al Jazeera news channel, Al Jazeera English, documentary channels, Al Jazeera Sport, and children’s channels)
125 per cent
MBC1, MBC2, Al Jazeera, Qatar TV 1, MBC4, Star Plus, Rotana Cinema, Al Arabiya, MBC Action
4
Al-Watan, Al-Rayah, Al-Sharq, Gulf Times (English language), The Peninsula (English language), Qatar Tribune (English-language)
255,880
Population by gender GDP per capita
Main TV channels
Top TV stations by GRP
Significant newspapers
Broadband penetration Mobile penetration Most visited websites
Google, YouTube, Facebook, windowslive, Yahoo!, MSN, Maktoob, Twitter Number of cinema halls
Average cinema visit per month
Twice
Number of Facebook users Facebook penetration
30.63 per cent
Twitter penetration
8.46 per cent (April 2011)
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19 June 2011
SAUDI ARABIA The kingdom’s adland may be bouncing back, but the industry remains plagued by problems
T
he Kingdom of Saudi Arabia is a country of superlatives. As well as being the largest media market in the region, it is also the world’s top oil producer and is home to the world’s largest proven oil reserves. Its population of 26 million makes up 70 per cent of the GCC’s total bloc, and with the aforementioned hydrocarbon resources still fuelling its development, its total national GDP is larger than that of any other country in the MENA region. Like fellow Opec member and neighbour Kuwait, Saudi Arabia’s industrial-led, petrodollar economy enabled it to weather the economic crisis reasonably easily, with a minimal amount of fiscal disruption, although advertising expenditure fell in 2010 and 2009. Its economy is expected to grow by 6.5 per cent this year, according to the International Monetary Fund, with a diversification away from its dependence on oil a priority. TBWA\Raad Riyadh’s general manager, Mourad Rachid, says the Saudi market has been boosted by economic decisions announced by King Abdullah Bin Abdulaziz – decisions that “will eventually support the purchase power of Saudis, leading to more spending by advertisers to grab their share of the extra money being spent in various ways”. As the largest consumer market in the Arab world, Saudi Arabia remains one of the most important spaces for marketing and advertising in the Middle East. Economic growth may not have been as high as in some of the smaller Gulf markets during the boom, but international companies have always prioritised the Saudi market and have become even more focused on the kingdom following Dubai’s recessionary woes (although these appear to be over) and the uprisings that have spread across the Arab world. ZenithOptimedia predicts that adspend in the kingdom will increase by 4.3 per
Snapshot of the Saudi Arabian market
WESTERN EUROPE
cent this year, rising to just over $1 billion, making Saudi Arabia the third most important country in terms of adspend behind the UAE and Egypt. So far things appear to be on track. The Pan Arab Research Center has reported an 11 per cent rise in adspend for the first quarter of the year, jumping to $302 million compared with $271 million for the same period last year. Of this total, print remained king, although panArab TV stations are the mostEMERGING EUROPE relevant to Saudi consumers and advertisers (as they are in most Middle East countries). Figures for pan-Arab TV adspend are not included in individual country breakdowns. Magazines and newspapers combined accounted for $247 million (82 per cent) of the total spend between January and March, with more than 60 newspapers and 21 weekly and 20 monthly magazines fighting for their share of the pie. But while the outlook may appear bright, there are concerns. Although the kingdom Forecast growth Previous years and forecasts. All figures in US$ million at current prices has been largely untouched by Year Total Newspapers Magazines TV Radio Outdoor the wider political problem of 2004 605 424 27 76 _ 78 Total 4.3% its neighbours, instances of 2005 774 583 29 63 _ 99 sectarian unrest were recorded 2006 988 646 37 66 73 166 Newspapers 4.2% in cities with a large Shia pres2007 1,072 728 42 61 56 166 ence earlier this year, with pro& AFRICA 2008EAST1,174 810 46 68 55 196 Magazines testers’ anger focused on theMIDDLE 5.6% 2009 1,089 791 40 53 67 139 release of detainees and call2010 1,050 751 36 48 90 125 ing for the kingdom to stop its Outdoor 5.6% troop deployment and inter2011 1,095 783 38 50 92 132 vention in Bahrain. 2012 1,113 791 39 52 94 137 TV 5.6% More recently, Manal al2013 1,133 801 41 54 95 143 Sherif, a female Saudi national Source: ZenithOptimedia from the eastern city of Al Khobar, was arrested for flouting a ban prohibiting women from driving in the deeply women to have more of a say in female consumers that power, group in the Gulf, and yet their conservative country. Charged their lifestyles, most of which make her life easier and con- attitudes and beliefs are often with “violating public order”, is being played out on social nect her to like-minded people unknown or hard to obtain through traditional research,” al-Sherif was held for five days media. In February there was if they are to prosper. Brands operating in the said Erik van Vonderen, the by religious police after post- #egyeffectSA on Twitter, foling a video on YouTube of her- lowed by #saudiwomenre- kingdom also have the added founder of trendspotting netself driving in her home town. volution. A branch of this was issue of knowing little or noth- work VNDLGY (pronounced Her actions were part of the #khobargirlsunite, #jeddah- ing about their target audi- Von-do-lo-gy) recently. Un-researchable consumers wider Women2Drive move- girlsunite and #riyadhgirlsu- ence. For example, women ment, which represents a group nite – calling for equality in aged between 20 and 30, either is just one of many wider issues of Saudi women in a co-ordi- municipal voting starting 23 married or unmarried, and that have historically plagued nated car drive to push for April. All of this will impact on with or without children, are Saudi Arabia’s advertising inequality on the roads. Indeed, advertisers, with women clear- described as the ‘black box’ dustry. The others being meditracking the influence of North ly calling for more control and consumer because they are ocre creativity, conservative African unrest on Saudi Ara- for solutions that empower deemed to be un-researchable. clients, a lack of local talent bia shows a mass push by them. Brands will have to give “They are the most important and strict governmental regu-
ADVERTISING EXPENDITURE
19 June 2011
FACTFILE Population
26,131,703 (July 2011 estimate) Population by gender
Males: 54 per cent Females: 46 per cent GDP per capita
$24,200 (2010 estimate)
Restrictions & regulations
In general it is a conservative/censored market with strict rules and regulations. All ads across all types of media are expected to respect the Islamic culture. Cigarettes, lingerie, and any ad with sexual connotations is prohibited. Political and religious connotations are not allowed in any advertising message. Some conservative media reject any appearance of females in advertisements. Strict regulations on outdoor media implemented by the municipality – creative executions need pre-approval, some outdoor media still require the eyes to be pixelated, and women are strictly prohibited from any outdoor media Number of TV stations
4
Penetration of pay-TV/cable
421,300 active cable TV subscriptions
Number of radio stations
7
Top radio stations by adspend
MBC FM, Panorama FM, Mix FM
ADVERTISING EXPENDITURE BY MEDIUM Media split, 2010
Number of newspapers
16
Top newspapers by adspend
Okaz, Al Riyadh, Al Hayat
Broadband penetration
Newspapers $751 million 33.2 per cent
Mobile penetration
Outdoor $125 million
172 per cent
Game console penetration
36 per cent Radio $90 million
Number of Facebook users
3,947,540 TV $48 million Magazines $36 million
lations. All still hold sway. But whatever the concerns relating to the industry, Saudi Arabia remains the most important consumer market in the GCC, especially given its youthful dynamic and the spending power of the 15 to 24year-old demographic group. The population is very young, with about 60 per cent under the age of 25, and as the new generation set up their own homes, there will be demand for white goods, furniture and cars as well as fast moving con-
Facebook penetration
15.28 per cent
Twitter penetration
0.43 per cent (April 2011)
sumer goods. Nonetheless, the population is just one third of that in Egypt. Also, GDP per capita is not quite as high as many people guess from media images of super-rich Saudis. How marketers tap into the youth demographic market remains one of the main questions faced by the country’s adland. The answer will probably lie somewhere within digital, given Saudi youth’s love affair with mobile phones and the web.TNS’s Digital Life survey, released last year, put
Saudi Arabia among the world’s top three countries when it came to their level of engagement with the web, with 55 per cent ‘highly engaged’. The internet provides a vital platform for expression and dialogue for both women (see above) and the kingdom’s youth. With little opportunity for social freedom or gender interaction, they blog, Tweet and connect on Facebook. The kingdom has around four million Facebook users – the most in the GCC – although its large
population means that Facebook penetration as a whole is among the lowest in the Gulf, at 15.8 per cent. The only GCC nation with lower penetration is Oman. Blogging can be a risky business, though, as is expression via traditional media. Despite hints at progress, selfcensorship remains pervasive, private TV stations cannot operate from Saudi soil, and bloggers are routinely persecuted. In March last year, Reporters Without Borders included Saudi Arabia in its list of ‘Enemies of the Internet’, accusing the country of restricting online access and harassing its citizens. Keeping it company were countries such as China, Iran and Vietnam. Despite interest in the web, there is still a gap between the potential and the actual shift to digital, says Ziad Rahhal, head of regional sales at Yahoo! Maktoob. “One can say that this is due to lack of enough awareness. This is why, over the past year or so, you saw many industry players such as publishers and digital agencies investing in the education process through workshops and digital summits. So you get a sense that the market is building the groundwork, and we think that the digital industry will start reaping the benefits in the coming years through higher conversion rates and an accelerated share shift from existing marketing investments to online.” The government also retains a vice-like grip on newspapers, local TV stations, radio and outdoor media, although there are slight signs of change, even if they only relate to an opening up of the market to increased competition rather than freedom of expression. Chief among these is the shake-up of the radio market. Up until last year, MBC FM and Panorama FM, both of which are run by MBC, were the only two private radio stations operating in the country. Now that is in the process of changing, with a number of new radio licenses being granted by the country’s Ministry of Information and Culture. Further media activity in the market has been steady if not earth-shattering, with global interest mainly piqued by the Rotana Group, which is majority owned by Prince Al-Waleed Bin Talal and is the Arab
19
world’s largest entertainment company. In May News Corp raised its stake in Rotana to 14.5 per cent. The New Yorkheadquartered media giant increased its stake from 9.09 per cent – which it had purchased for $70 million in May last year – following a cash injection of $35 million. News Corp exercised half of its option to double the stake to 18.2 per cent but is retaining the right to exercise the rest before November next year. Kingdom Holding, owner of the Rotana Group, is also set to launch an Arabic language news channel later this year, although the chances of its being based in Riyadh or Jeddah are slim. ‘Moderate’, focussed on the Arab world, and geared towards a youth market, the channel will go headto-head with Qatar-based Al Jazeera and MBC Group’s Dubai-based Al Arabiya. The station’s planned launch is just the latest round in the battle between Rotana and MBC for dominance of the lucrative Saudi TV market and the wider pan-Arab region that both broadcasters cater to. To date, the MBC group, with its bouquet of general entertainment, film, children’s and news channels, dominates Saudi Arabia. MBC and Rotana’s focus on Saudi Arabia is easy to understand. Saudis are avid media consumers. Statistics on TV viewing are still in their infancy, but it’s estimated that Saudis watch four to five hours of TV per day, not far off US viewing levels.Television is likely to remain a key leisure activity, especially since cinemas are banned and there are limited options for entertainment. But if Saudi Arabia is to reach its full potential a lot needs to improve. “Measurability and accountability are both key to unlocking adspend growth in Saudi Arabia,” says Mazen Fakhoury, managing director of Mindshare Saudi Arabia. “Advertisers and marketing practitioners would then be able to justify ROI as their budgets face the axe. A second challenge is the traditional mindset that prevails, which results in low creativity and innovation.The third is the short supply of talent in the market, especially Saudi talent, which ultimately affects the quality of the output and is an essential differentiator.”
19 June 2011
21
SYRIA
With the country in turmoil, the potential of Syria’s ad industry remains unrealised
S
yria’s political troubles are seemingly worsening each day. Protests and demonstrations against the government are widespread and the regime’s heavy-handed response means a mounting death toll, with no sign of relief for its beleaguered 23 million citizens in sight. Leaving aside the tragic human cost, the nation’s economy is in dire straits. Already subject to UN sanctions – with additional sanctions currently being debated by the UN Security Council – the present troubles coming at the tail end of one of the worst economic downturns in recent history is certain to mean negative growth and uncertainty. The irony is, before the situation escalated, the market was showing signs of expansion and potential. Prior to legislation introduced in 2001, private media ownership was banned. “Private print media was born along with the economical developments that started with private banks and insurance companies. The economy started to open gradually with the regional market,” says Manaf Bilal, deputy managing director of Y2Ad. Creatively, there was smallscale expansion in the market, with Intermarkets announcing the opening of a Syrian office in Damascus in March, while there was some minor merger activity between Lebanese and Syrian agencies too. As a result, Nabil Maatouk, regional managing director, Levant, Turkey and North Africa for DriveDentsu,thinks that when stability does return, it will be a more vibrant ad market.“The competitive environment has been on an increasing trend in terms of product choice to the Syrian consumer, expectations by the Syrian consumer and brand awareness and infinity.” According to figures from Mindshare, total advertising spend in Syria for 2010 was $140 million, a growth of 40 per cent compared with 2009’s $100 million. Of this $140 million total spend in 2010, outdoor grabbed the lion’s share. Print media was second largest, with television coming third, a poor showing considering TV’s popularity with ad-
Advertising expenditure
Advertising expenditure by medium Source: Stat Ipsos
30
Media split, 2010
25 Newspapers $28 million
20 15
TV $10 million
10 5
Magazines $4 million
0
TV
Newspapers 2008
vertisers in a pan-Arab context. Radio garnered the least amount of spending. Spend in 2011 so far has been low. The first quarter’s spend figures from the Pan Arab Research Center put newspaper spend at $5 million, magazines at $3 million, with television attracting a lowly $1 million. Around 58 per cent of the country’s population is under 24 years’ old. In most other Arab countries, social media penetration rates among this demographic are high. However, the three-year government ban on YouTube, Twitter and Facebook, only lifted in February, means that membership to these and similar platforms is way behind. After the ban was lifted, traffic to these sites spiked and is demonstrative of the desire for more social media consumption. According to the 2nd Arab Social Media Report, published by
2009
Magazines
Source: Stat Ipsos
2010
Dubai School of Government, the number of Syrian Facebook users in April of this year was 1.94 per cent of the population. The report also goes on to state that 192,732 new users joined Facebook between Jan and April 2011, or 0.84 per cent of the total population. The number of active Twitter users in the country, as of April, is just over 40,000, or 0.17 per cent of the total population. While a ban on social media was overturned, the government still carefully monitors online activity. A recent blog alleging the arrest of a feminist activist by armed security men in Damascus may have been a hoax, but the draconian crackdown of digital dissent is real enough. The UK’s Guardian put the number of arrested at more than 10,000.With trouble showing no signs of abating, Syria’s market forecast is looking increasingly grim.
Factfile Population
23,000,000 (2010 est.) Population by gender
Males: 52 per cent Females: 48 per c ent GDP per capita
$4,800 (2010 estimate)
Restrictions & regulations
All Arab Advertising Organisation media require 100 per cent pre-payment. Outdoor bookings for summer and Ramadan need to be carried out at the beginning of the year to secure space and location. Corporate annual booking is highly recommended in order to improve discounts and to secure prime positioning
Penetration of pay-TV/ cable
6.4 per cent
Number of radio stations
16
Average daily time spent listening to radio
3 to 4 hours
Number of newspapers
40
Average daily time spent reading newspapers
3 to 4 hours
Top three newspapers by advertising spend
Al Waseela (30 per cent); Sahi Al Sham (16 per cent); Al Daleel (15 per cent) Mobile penetration
5
Damascus (33.7 per cent); Aleppo (26.5 per cent); Homs 30.6 per cent
3 to 4 hours
Google, Facebook, Windows Live, YouTube, Syria-News
Number of TV stations
Average daily time spent watching TV
Most visited websites
22
19 June 2011
UAE
Snapshot of the UAE market An improving economy and an WESTERN EUROPE in-flow of resources from regional unrest mean the UAE is on the up
A
fter a spell in the doldrums, the UAE’s economic fortunes seem to be taking a positive turn. Unaffected by political storms or demonstrations, its recent spell of fiscal misfortune caused by the global credit crisis would appear to be receding. All research points towards growth this year, albeit single digit, with ZenithOptimedia predicting an increase in adspend of 5.2 per cent. Figures released by the Pan Arab Research Center (PARC) for the first quarter of 2011 paint a similar picture, with advertising expenditure between January and March rising 3 per cent on the same period last year. Although growth is conservative, anything is better than the estimated 10.5 per cent drop experienced in 2009 – a drop that the country has been struggling to rebound from ever since. “The UAE advertising industry is recovering nicely,” says Reda Raad, chief operating officer at TBWA\Raad. “During the boom times about three years ago, there was an over reliance on the real estate and banking sectors. These industries were ultimately the hardest hit during the downturn. So now we’re seeing a re-emergence of traditionally strong advertising sectors, including fast moving consumer goods, telecommunications and automotive. These industries will resume a leadership position in terms of heaviest spend categories across the industry and contribute to the UAE’s status as one of the highest ad spenders in the region.” Reasons for the advertising industry’s improved situation vary, but economic recovery and a flight of resources from regional unrest are both playing their part.The Saudi American Bank Group believes the UAE’s economy will grow by nearly four per cent this year on the back of higher crude production, an increase in public spending and better performance in Dubai’s nonoil sectors. The International
Monetary Fund predicts growth of 3.3 per cent. Abu Dhabi, the federal capital, still sits on major oil reserves – the emirate accounts for around 86 per cent of the UAE’s total landmass – and its development has been conducted at a more measured and conservative pace than Dubai’s. Whereas the global financial crisis impacted Dubai heavily, with its exposure to global real estate prices proving especially costly, Abu EMERGING EUROPE Dhabi weathered the storm with greater ease. “The UAE in particular is benefitting from the flight of resources from trouble spots to safe havens,” says Elie Haber, managing director of Mindshare UAE (see page 6). “With people changing their travel plans away from unstable markets, Dubai is projected to enjoy some of the world’s strongest inbound tourism growth over the next few years. Even though the economic downturn initially impacted upon the growth of overall Forecast growth Previous years and forecasts. All figures in US$ million at current prices advertising spending; in 2011 Year Total Newspapers Magazines TV Radio Cinema Outdoor there are signs of recovery with 2004 777 524 104 97 _ 7 45 Total 5.2% online advertising continuing 2005 973 716 157 40 1 9 51 to grow and the ever popular 2006 1,223 862 187 34 13 14 123 Newspapers 2% TV advertising rebounding.” 2007 1,470 1,139 246 33 36 16 _ The UAE, especially Dubai, & AFRICA 2008 EAST 2,130 1,639 296 58 113 25 _ has long been a regional hub MIDDLE Magazines 15.3% 2009 1,907 879 280 72 128 22 525 of media and creativity, and confidence is returning to the 2010 1,950 897 238 79 147 21 567 Outdoor 6.5% country’s advertising scene. 2011 2,051 914 275 83 154 22 603 Figures from PARC for the 2012 2,104 932 277 87 154 24 630 Radio 4.3% first quarter show that total 2013 2,162 950 280 91 155 26 661 media spend was $349 million Source: ZenithOptimedia compared with $339 million for the same period last year. Although not quite as high as the same period in 2009 at $356 witnessing a slower but more of the regional players are of the UAE’s ad industry remillion, it is a marked increase. sustainable growth trajectory based in the UAE. As result main, with procurement top“We can feel more activity, for the UAE in the next five of recent turmoil, we are see- ping the list. “One simply canmore confidence and a greater years. Consumer spending, ing multinationals consolidate not put a value to good creative need for brands to get back in which is a key influencer in ad their headquarters for the and too often we battle it out the game,” says Tarek Miknas, spending, will remain a key Middle East and North Africa with departments that simply CEO of FP7 Group. “Howev- driver.After the contraction of region out of Dubai. In addi- do not want to understand our er, regionally, there is still a lot the economy in 2009, the ad in- tion, the UAE government has end goal. Of course, we have to of uncertainty and unrest, dustry is seeing a quick return outlined a proactive approach look at the bottom line in towhich will result in slow recov- to positive growth in 2011. to foreign investors and multi- day’s climate, but cheaper ery once confidence builds. However, future growth will nationals, which also encour- rarely equals better. I am hopBut with that said, there is a flow in a much more normal ages trade. All of this helps the ing that in the not-so-distant spirit of overall positivity that growth trajectory than those UAE become a leader in the future we will be able to overcome this approach by putting determined during pre-crisis regional advertising world.” could speed things up.” Miknas warns, however, that up a united front with our peers Raad adds: “After the recent levels. The UAE is benefitting boom and bust period, we are from the regional unrest. Most challenges to the development in the industry.”
ADVERTISING EXPENDITURE
CAMPAIGN_DEC.indd 1
19 June 2011
FACTFILE Population
5,148,664 (June 2011 estimate) Population by gender
Males: 73 per cent Females: 27 per cent GDP per capita
$40,200 (2010 estimate)
Restrictions & regulations
All advertising must follow Islamic cultural practices Number of TV stations
Around five channels in Dubai and five in Abu Dhabi; one channel in Sharjah; 1 to 2 channels in Ajman
Top TV channels by adspend
Abu Dhabi Emarat,Sama Dubai,SharjahTV
Top TV channels by GRP
MBC1, Abu Dubai Al Oula, MBC2, Dubai TV, MBC Action, Al Jazeera, MBC4
% ( $ # # & " % ( $ # # & ! " # # ( $ % ( # # % " # & # & $ $ #$! " ! # ! # # & ! )" & #! # ! # $ # ! # #$! # !# # $ " ! " " # ' ! & # & $ ' ! # #! &
( & # & $ .com
Average daily time spent watching TV
3.1 hours
Penetration of pay-TV/cable
15 per cent (estimate)
Number of radio stations
More than 26
Average daily time spent listening to radio
2.8 hours
Top radio stations by adspend
City FM, Virgin, Dubay Eye Number of newspapers
& # & $
ADVERTISING EXPENDITURE BY MEDIUM Media split, 2010
Five Arabic dailies, four main English dailies, one evening, one sport daily Top newspapers by adspend
Gulf News, Al Khaleej, Al Ittihad 12/12/10 11:22 AM
Average daily time spent reading Newspapers $897 million newspapers
1.8 hour
Outdoor $567 million
Average daily time spent online
4 hours
Broadband penetration
Magazines $238 million 40 per cent
Mobile penetration
Radio $147 million
+200 per cent
TV $79 million
50.01 per cent
Cinema $21 million
Although the UAE is benefitting from its position amid regional unrest, the instability in the wider region is causing multinational companies and global brands to be more cautious and conservative in ad spending, warns Raad. This is a major deterrent to future growth. What’s more, there are a number of other challenges hindering the development of the country’s ad industry, not least a lack of credible television ratings (although these are due to launch after Ram-
Facebook penetration Twitter penetration
4.18 per cent
adan) and limited broadband infrastructure, which hinders digital mobile expansion. Perhaps most importantly according to Raad, major multinationals continue to treat the region as a cash cow and money is consequently deployed in other, more strategic markets. “Lastly, there is still the relatively lower cost of media as compared to other markets,� says Raad. “For example, the cost of running a newspaper ad in Dubai is one of the cheapest in the world. If
the price becomes more expensive, it will allow the category to grow and the industry will have more value. We are under-pricing our media.� Media spend in the UAE, like other markets in the Middle East, is dominated by print. Newspapers have always enjoyed a strong showing, although PARC’s figures on 2011’s first quarter spend of $216 million is lower than the same period for both 2010 and 2009 ($239 million and $245 million respectively).Adspend
in print is likely to continue its downward trajectory as digital increases in importance. Still, there are five Arabic daily titles, four main English dailies, one evening daily and one sporting daily in the UAE market. The most recent is the Abu Dhabi-based English language sports title, Sport 360, published by Gulf Sports Media and launched in September last year. Of newspaper total spend in the first quarter, English language titles attracted the lion’s share, with $121 million, although that figure is down 26 per cent year-on-year according to PARC. Arabic titles attracted $94 million over the same timeframe,a decrease of 5 per cent. The UAE’s domestic television market accounted for 9 per cent of total first quarter adspend, or $33 million, says PARC. This figure represents an increase of 13 per cent over the $29 million spent during the same period of 2010, but the majority of TV adspend emanating from the UAE is for pan-Arab advertising through the likes of MBC. Consolidation in the media market, however, has been widespread over the course of the past two years and will continue.A large number of magazines have disappeared and more will undoubtedly follow. There is also a high possibility of the merging of media owners in different categories, and the reduction of staffing levels. In March, Abu Dhabi Media Company re-branded as part of a wider strategy to streamline the organisation and make it more commercially viable. Now known simply as Abu Dhabi Media, the re-brand followed redundancies that reduced the company’s headcount by 20 per cent in an effort to make it more sustainable in the longer term. Outdoor, meanwhile, is rebounding well after the disasters of the past few years. PARC data shows that outdoor media grew by 47 per cent between January and March this year, with $30 million of spend. This is a sizeable improvement on 2010’s first quarter spend of $21 million. Mindshare estimates there are more than 1.1 million outdoor vehicles in Dubai alone. While only 4 per cent of total, radio is also experiencing a turnaround. The medium at-
23
tracted $13 million in first quarter of this year, a growth of 106 per cent on last year’s $6 million, according to PARC. Online, of course, is the next big frontier for the UAE, although advertisers have been slow in embracing the medium. While standardised online spend figures for the UAE are not available, Mindshare’s Elie Haber says that digital is only going to capture more ad dollars in the immediate future. “We expect another boom of online advertising for the years to come,� he says. “As well as an increase in Arabic content and social media, he believes a rapidly growing broadband user base offers a digital media market ripe for development. “The UAE’s population is young, filled with talent, creativity, innovation and ideas and the best place for all these assets to express themselves is the internet.� What figures are available certainly point in one direction. The number of UAE Facebook users hit 2,297,440 in May, making the UAE the country with the highest Facebook penetration rate in the Middle East and North Africa (50.01 per cent). Twitter penetration is also relatively high according to the 2nd Arab Social Media Report compiled by the Dubai School of Government. In April the UAE had 201,060 Twitter users, with a penetration rate of 4.18 per cent (see page 26). Growth in social networking, like much of the rest of the Gulf, is way ahead of the rest of the world. Converging factors such as hardware and devices (laptops and mobile phones) are prioritising social media first and search engines are doing the same. It is anticipated that in the long term (the next five years) there will be a maturation by businesses using social media to connect and sell to customers in the places where they are. In the short to medium term, there will be a lack of human resource to fill the positions required to do this. Moreover, commercial social media will take a back seat as the socio-political problems of the region get the lion’s share of attention and conversation. But social networks will continue to serve under-served consumers and working mothers, for example, in the UAE.
24
19 June 2011
OTHER MARKETS Palestine’s ad industry is battling a worsening economic and political environment IAIN AKERMAN
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nyone who believed Israeli Prime Minister Benjamin Netanyahu’s recent assertion that the Palestinian economy is booming should read the United Nations’ latest analysis. In a report released this month, UNRWA spokesman Chris Gunness says: “The occupation and its related infrastructure, such as settlements and settler-only roads that encroach on and divide Palestinian land, settler violence and the West Bank Barrier have diminished prospects for Palestinians in general and especially for refugees. This is likely to raise the rate of aid dependency among refugees.” The report states that unemployment in the second half of 2010 grew much faster than employment, while average purchasing power continued to decline in the West Bank. What’s more, of six major private sector activities, only two recorded employment gains during the second half of last year, with the end result being that one in four Palestinians is now unemployed. Even the US admits that increased restriction on the movement of Palestinians has disrupted labour and trade flows, industrial capacity and basic commerce, with Palestinians’ lack of access to land and resources in Israeli-controlled areas – combined with import and export restrictions – impeding economic improvement in the West Bank. Gaza, under Israeli blockade since 2007, is almost entirely dependent on foreign aid. It is within such an environment that the West Bank’s embattled advertising and media industry tries to operate. Prior to 1993 there was only print media in the Palestinian territories, with two main daily newspaper, including Al Quds daily newspaper, according to Cornerstone Global Associatest. Al Quds remains the main Palestinian media outlet and, although now owned and run separately, has editions printed in Jerusalem and London. With the creation of the Palestinian Authority, the government-owned Palestine TV was established, and currently broadcasts on both terrestrial
Nablus... unemployment and poverty rates are high in the West Bank, with a recent UNRWA report saying the situation is only getting worse
and satellite to the Arab world and Europe. In recent years, a large number of local terrestrial TV and radio stations were formed, some with political affiliations. Watan TV, now also broadcasting on satellite, is the most widely watched, non-political commercial channel operating out of Ramallah. It is mainly funded by European and international donors. “For a country under occupation, media in Palestine enjoys a fair amount of freedom,” says Jack Rabah, business development director at Al Nasher PR & Advertising Agency in Ramallah. “Media vehicles representing all shades of the political spectrum broadcast. Of course, the view is not picture perfect as political conditions have imposed restrictions on different media vehicles at different times.” While TV is the favourite medium among consumers (more than 80 per cent of Palestinians consider TV as their main source of information), most advertiser spending goes towards outdoor advertising. “Local TV stations, for the most part, have limited viewership and broadcast to a small audience and geographical area,” says Rabah. “Advertis-
ing with popular satellite channels like MBC and Al Jazeera is out of the question, even for most of the big corporations in Palestine. Recent improvements in Palestine local and satellite TV programs and general image are slowly increasing its attractiveness for advertisers as well as its viewership among Palestinians, although its rates are still prohibitive to many local companies.” No adspend figures are available for the West Bank and Gaza, with limited spending on advertising on Palestinian TV blamed for low-quality inhouse productions and a lack of resources for programme commissions, according to a report last year in This Week In Palestine. Furthermore, the absence of structure in the advertising market has contributed to the inefficient distribution of advertising expenditure. The past two years have, however, witnessed a boom in internet usage, with 578,380 Palestinians in the West Bank on Facebook out of a total population of 2.5 million. Internet penetration, according to Internet World Stats, stands at 14.2 per cent (Facebook penetration indicates it is slightly higher), but Rabah puts it as
high as 70 per cent. There are also 11,369 active Twitter users according to the 2nd Arab Social Media Report published by the Dubai School of Government, representing a modest penetration rate of 0.25 per cent. Al Quds has around 150,000 people who ‘like’ its page on Facebook, which is more than five times the number of copies it prints on a daily basis. What’s more, major advertisers such as Jawwal, Sbintany and Watani-
ya are all using social media to advertise their services and engage with consumers through weekly online competitions. “Most Palestinian business are micro to small sized family-owned enterprises,” says Rabah. “Funds for marketing, planning, branding, and advertising are scarce and in many cases non-existent. For a few, the new social media age has provided a cheap way out of this bind, but most are still out of the picture.”
Factfile Population
West Bank: 2,568,555 (July 2010 estimate) Gaza: 1,657,155 (July 2011 estimate) GDP per capita
$2,900 (2008 estimate) Broadcast media
The Palestinian Authority operates one television station (Palestine TV) and one radio station. There are an estimated 30 independent TV and 25 radio stations operating. Al-Aqsa TV is a Hamas-run station in Gaza, while private stations include Al-Quds Educational TV, Al-Mahd TV, Al-Majd TV,
Al-Nawras TV and Watan TV Main newspapers
The best read papers include Al Quds (private, Jerusalembased, largest-circulation Palestinian daily); Al-Ayyam (private, Ramallah-based daily); Al-Hayat Al-Jadidah (Palestinian National Authority daily); Filastin (Hamas-affiliated daily)
Number of Facebook users
578,380
Facebook penetration
13.10 per cent
Twitter penetration
0.25 per cent
Mobile penetration
49 per cent (2009)
19 June 2011
25
Yemen’s turbulent few months could send the country’s ad industry into the abyss IAIN AKERMAN
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igures aren’t kind to Yemen. It is one of the least developed countries in the world and is ranked 133rd out of 175 countries according to the UN’s Human Development Index. With 42 per cent of its population living in poverty, one in five malnourished, an unemployment rate that hits 52.9 per cent in certain age groups, and an adult literacy rate of just 49 per cent,Yemen’s problems are manifold. These problems have only been compounded by recent events. After 33 years of rule, President Ali Abdullah Saleh was forced to seek medical treatment in Saudi Arabia earlier this month after being injured in an attack on a mosque in his presidential compound. The attack followed months of protests that have consumed Yemen – protests that are fuelled by complaints over high unemployment, poor economic conditions and corruption. At the time of going to press, anti-government demonstrations continued in Taiz, Sana’a, Ibb and Hodeidah, with Yemen’s situation worsened by government troops battling both anti-government tribal forces and Islamic militants across the country. The impact on Yemen’s advertising and media industry is obvious.As Kamal Al-Dailami, general manager of Brothers Media in Sana’a, says: “Fighting stopped the wheel of the commercial market, except for food and fuel.” “Simply put and without exaggeration, business and life in Yemen have been paralysed,” states Tareq Gohery, general manager of Sana’a-based agency Rivotec. “A major portion of outdoor advertising media such as billboards have been cleared out as most companies have delayed their advertising plans with a ‘wait and see attitude’. On the creative side, some of them are now being used for either pro or anti-government campaigns. “Print advertising has also seen better days. With the sudden decrease of demand in newspaper and magazine ads, some publishers have reduced workforce, publication quantity and frequency, while others have even shut down. And
World heritage... although rocked by demonstrations and heavy fighting, Sana’a remains one of the Arab world’s greatest cities
if that wasn’t enough, more challenges came into play with limited electricity, hiked transportation, food and living expenses due to extreme shortage in petrol and diesel. “It’s times like this that news and media outlets live for.With the majority of the population tuning in at all times of the day for the latest updates from local and regional satellite channels, it’s clear where people’s main focus is nowadays. “If this rate continues, Yemen’s advertising industry may soon find itself in an abyss.” In such a time of national stress, television has become the most important medium. Indeed, the only figure available from the Pan Arab Research Center for the first quarter of 2011 indicates that $1 million was spent on TV advertising between January and March. There are no other adspend breakdowns available. Television has traditionally been the most effective means of communication in Yemen due to high levels of illiteracy, the mass coverage it offers, and the low advertising rates compared with pan-Arab satellite broadcasters such as MBC. However, the broadcast media scene in Yemen is mainly government-owned and controlled by the Yemen General Corporation for Radio and TV,
with a small number of privately-owned channels, such as Suhail and Al Saeeda, broadcasting via satellite. Yet even prior to the unrest that has swept the country TV had a long list of disadvantages, the most notable being limited coverage in rural areas due to low TV ownership, frequent power cuts, a lack of any data on TV viewership, the quality of transmission, and the poor production quality of commercials. Print media is largely based on pre-1990 unity lines, with newspapers and magazines either based out of Sana’a or Aden, according to Cornerstone Global Associates. Due to low literacy levels, however, print media in any form is effectively relegated to a junior role behind TV and radio. As with other countries within the region affected by unrest, Yemen’s advertising scene had been slowly raising its game. “Yemen had seen improvement in its advertising sector in the past few years, leading to advertising companies in the country expanding significantly,” says Al-Dailami. That improvement has now been derailed. With vast swathes of Yemen cut off from the outside world, the historical challenge for advertisers has been how to reach Yemen’s rapidly expand-
ing consumer base. But a poor economy, a general ignorance of what advertising is, and a high level of illiteracy that renders much print and outdoor advertising impotent has hampered clients. The Bin Humaid Group, a full-service agency based in Sana’a, admits that “no official media survey has been conducted in the local market in
order to weigh the viewers and readers habits and evaluate media penetration in different social categories”. As such, media and advertiser decisions are made by agencies based on knowledge of local media. Not an ideal situation, but local knowledge and consumer insight will be of paramount importance during the troubled months and years ahead.
Factfile Population
24,133,492 (July 2011 estimate) Population by gender
Males: 52 per cent Females: 48 per c ent GDP per capita
$2,600 (2010 estimate) Broadcast media
The Yemen General Corporation for Radio and TV controls all broadcast media and is also involved in the regulation of printing presses and funding of some newspapers. The Republic of Yemen Television operates Channel One from Sana’a and Channel Two from Aden. Private satellite channels such as Suhail and Al Saeeda broadcast via satellite from outside Yemen Crackdown during unrest
According to Reporters
Without Borders, Yemeni authorities continue to violate media freedom. On 21 May goverment thugs attacked the Sana’a headquarters of the independent daily Al-Oula, stabbing Hassan Sayeed, an employee. Twelve thousand copies of Al-Oula were seized at a government checkpoint at the entrance to the capital on 19 May without any grounds being given Main newspapers
Al-Thawrah; Yemen Times (English language); Yemen Observer (weekly, English language); Al-Ayyam
Number of Facebook users
343,940
Facebook penetration
1.37 per cent
Twitter penetration
0.12 per cent
contributed the largest amount of new users)1. Its mobile users have exceeded 250 million2 subscribers. Twitter users also 26 19 June 2011 exceeded 200 million users at the end of March.3 Collectively, these 200 million users tweet about 4 billion tweets a month.4
W
The estimated number of active Twitter users in the Arab region at the end of March 2011 was 1,150,292. Multiplying by the ratio of total users to active users above (an average of 200 million/35 million = 5.7), we get a total Twitter population of 6,567,280.
The first three months of 2011 saw what can only be termed a substantial shift in the Arab world’s usage of social media towards online social and civil mobilization online, whether by citizens — to organize demonstrations (both pro- and antigovernment), disseminate information within their networks, and raise awareness of ongoing events locally and globally – or by governments, in some cases to engage with citizens and encourage their participation in government processes, while in other cases to block access to websites and monitor and control information on these sites.5 Figures 1, 2 and 36 illustrate the Internet blackouts in several Arab countries during first quarter of 2011.7 Egypt’s blackout lasted for five days, from January 28 – February 2. Meanwhile, Libya - at the time of accessing the site (April 20, 2011) - still seemed to be suffering from low Internet access and reduced traffic. Conversely, in the case of Syria, with the lift of the ban on social media websites by the government on February 7, YouTube and other social media traffic increased significantly.
W
The estimated number of tweets generated in the Arab region in the first quarter of 2011 (Jan. 1 – March 30) by these “active users� was 22,750,000 tweets. The estimated number of daily tweets is 252,000 tweets per day, or 175 tweets a minute, or roughly three tweets a second.
W
The estimated number of daily tweets per active user in the Arab region in the first quarter of 2011 is 0.81 daily tweets.
W
The most popular trending hashtags across the Arab region in the first quarter were #egypt (with 1.4 million mentions in the tweets generated during this period) #jan25 (with 1.2. million mentions), #libya (with 990,000 mentions), #bahrain (640,000 mentions), and protest (620,000)
STATISTICS
As with Facebook, Turkey dominates in the number of Twitter users, with 217,627 users, followed by the UAE, which leads the Arab countries with 201,060 Twitter users (See Figure 20). The top five Arab countries in terms of number of Twitter users are UAE, Qatar, Egypt, Saudi Arabia and Kuwait.
Information from the Dubai School of Government’s 2nd Arab Social Media Report
Figure 1: Syria: Social Media Internet Traffic Before and After Lifting the Ban on Social Media 8 (February 7, 2011) - YouTube as Before an example Figure 2: Libya: Internet Traffic and After March 3, 2011 - Sample of all Google Products9
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Volume of tweets in the Arab region
This is not to say that there was a causal relationship, or that the Facebook pages were the defining or only factor in people organizing themselves on these dates, but as the initial platform for these calls, it cannot be denied that they were a factor 10 in mobilizing movements. However, given the small Facebook penetration in most of these countries (notably Syria and Yemen), it can be argued that for many protestors these tools were not central. It can also be argued that Facebook was an 5 instrumental tool for a core number of activists who then mobilized wider networks through other platforms or through traditional real-life networks of strong ties. Egypt, for example, has a relatively low penetration rate of 5.5%, but given its large population, that translates into around 6 million Facebook users, who in turn are connected to a much larger number 0 Jan 24 contacts Jan 25 who Jancan 26 be Jan 27 Janby 28 information Jan 29 Jan 30 those Jan with 31 Facebook Feb 1 Feb 2 Feb 3 Feb 4 Feb 5 of social influenced from accounts.
The volume of tweets from each country was estimated between January 1 and March 30 (see Figure 23), and calculated as a percentage of total tweets in the Arab region over this time period (Figure 24). The top five generators of tweets in the QHU TLU[PVUZ KHPS` ;^LL[ ]VS\TL Arab region are Kuwait, Qatar, UAE, Saudi Arabia and Egypt, who also have the top five largest active Twitter populations in the region. Consequently, to a certain extent, the size of a countryâ&#x20AC;&#x2122;s active Twitter population correlates with the volume of tweets it generates. Figure 23 shows that over 60% of tweets within the first quarter of 2011 were generated by these five countries.
Daily Tweet volumn and mentions of #jan25 in Egypt
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Arab Social Media Report
5
at the fluctuations in the volume of daily tweets in certain countries, we can see that some of the fluctuations Civil
Movements: The Impact of Facebook and Twitter In looking 3
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or â&#x20AC;&#x153;spikesâ&#x20AC;? seem to coincide with current events at the time. This does not conclusively indicate that the events directly
ZPKPIV\aPK TLU[PVUZ KHPS` ;^LL[ ]VS\TL contributed to the fluctuations in tweet volume, but their concurrence provides a high degree of circumstantial evidence for linking current events to a higher tweet volume. Figures 25, 26, 27 and 28 highlight a timeline of daily tweets19 over the first quarter of 2011 in Bahrain, Egypt, Saudi Arabia and Tunisia.
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Volumn of daily Tweets in Saudi Arabia
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Arab Social Media Report
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Growth rate of Facebook users during the 2011 protests, as compared to a similar time period in 2010 Civil Movements: The Impact of Facebook and Twitter
1HU
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Number of active Twitter users in the Arab region, plus Iran, Israel and Turkey (average number between 1 January and 30 March)
4
(8) http://www.reuters.com/article/2011/02/23/us-saudi-facebook-idUSLDE71M08Q20110223 Arab Social Media Report Vol. 1, No. 2 (9) http://www.bbc.co.uk/news/world-middle-east-12749674
Feb 20
Feb 27 Mar 13Palestine Saudi Arabia Syria, Syria Bahrain Egypt Yemen May 15YouTube (10) March 3 (7) Mar 11 on 7 Feb 4 (4) the Feb 14 (5) of Feb 17 ban (6) Mar Jan 14media (1) Jantraffic 25 (2) Feb 3 & 10 Syria: social before and after lifting the on social media February. 1 http://www.insidefacebook.com/2011/05/11/facebook-surpasses-677-million-users-more-traffic-trends-and-data-at-inside-facebook-gold-may-201115 and & 20 (8) (3) is used as the example. Source: Google edition/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+InsideFacebook+%28Inside+Facebook%29 onwards(9) 2 Figure 3: Egypt: Internet Traffic Between January 28 and February 2, 2011 16 http://www.insidefacebook.com/2011/03/31/facebook-passes-250-million-mobile-users-overhauls-mobile-website/?utm_source=feedburner&utm_ * Facebook penetration rates at at the start of protests in each country medium=feed&utm_campaign=Feed%3A+InsideFacebook+%28Inside+Facebook%29 10 - Sample of all Products ** Initial protest wasGoogle not organized on Facebook, although further protests were 3 http://www.mediabistro.com/alltwitter/twitter-active-users_b6628
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Figure 5: Mapping Calls for Protest on Facebook with Actual Demonstration
Volume of daily Tweets in Bahrain leading up to protests
19 Daily tweet volumes are approximations based on smaller samples than the rest of the study and as such tend to be â&#x20AC;&#x153;noisy.â&#x20AC;? Refer to Annex 1 for methodology.
Civil Movements: The Impact of Facebook and Twitter
19