First with Financial Comment from Arabia

Not much ad revenue for Gulf media in 2010

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Reviewing business websites and newspapers over the past few days the most noticeable thing is the absence of advertising. Normally the New Year is a moment for a blitz from advertisers. What happened this year?

If you took away the telecom duopoly in the UAE – du and Etisalat – then only a few messages of self-congratulation from government departments would remain, and the occasional auto ad.

Ad shortage

It is not even enough to call for a consolidation of the sector to make those ads available stand out. There simply do not seem to be many adverts around. Some magazines still manage to pull the advertisers, although page rates are said to be at rock bottom.

How the media fares in 2010 is therefore going to be largely down to the depth of the pockets of the owners, rather than advertising revenue. It could pick up but where from?

Real estate remains depressed with no new launches in prospect. Hotels are struggling with falling revenues. Airlines are also under pressure. Banks are mainly in hiding. The UAE went into recession in 2009 and is not out of it yet.

Of course if you fast forward a year then high oil prices offer a hopeful scenario of a bottoming out in the local economy sometime soon and a gradual recovery.

Competition amongst hotels and airlines at least then ought to stimulate some advertising, and the banks might begin to look for new customers again. But advertisers always use times of recession to think about the future – not having much else to do – and as money returns it is inevitably refocused into where agencies think it will produce the best impact.

Most industry experts reckon online media will be the biggest growth market for the next few years. There is an ongoing migration to the Internet by readers as broadband penetration improves their experience online and lowers costs.

Web vision

It could be the newspaper websites that get the ads, not the printed version. Specialist websites should become more popular. Internet television should really take off.

Fortunately for advertisers this media is far more measurable than traditional media, most of which is unaudited still in the Gulf, presumably because the reader numbers are far less than those claimed, or in the case of television because it is impossible to measure the actual audience.

There are still magazines in particular that count their print-runs as circulation and sell advertising on these figures, and the unaudited ones may not even do that.

If what emerges from 2010 is a better appreciation of the real value of good media and a focus back on quality of editorial rather than quantity of paper then this will not have been entirely a wasted year.


Written by Peter Cooper

January 4, 2010 at 12:21 pm

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