Exclusive data developed for Digital Broadcast shows the growing popularity of pan-Arab TV as the advertising platform of choice in the Middle East, writes PARC analyst M Shaharyar Umar.
The mushrooming growth of free-to-air (FTA) channels in the region coupled with the extended list of thematic TV stations is enriching the viewing experience for end consumers and helps television find favour as a platform with advertisers over other media vehicles.
Whilst ad spend in the region for all major media doubled from 2005 till 2009 from US$5.5 billion to $11 billion, the proportion of that money dedicated to television surged in the same period from $2.2 billion to nearly $5.9 billion. This equates to 163 per cent growth. Even during the challenging year of 2009 it was television that was instrumental in keeping the total ad spend in the black. Total ad spend for major media vehicles grew from $10 billion to $11 billion during 2009, whereas television grew from $4.4 billion to $5.9 billion.
The spend on pan-Arab media constitutes around 78 per cent of the total TV spend in the region as advertisers focused on reaching multiple markets rather than targeting specific areas through local channels. This figure has grown from 72 per cent in 2005. As a proportion of the advertising spend across all platforms, pan-Arab TV made a substantial gain as the recession struck. The percentage grew slowly between 2005 and 2008 from 30.5 to 33.4 per cent before jumping to 42.6 per cent in 2009.
Television viewership in the region is significantly affected by major political events, world sports and scheduled occurrences like school holidays and Ramadan. The average time spent on TV even changes significantly during these events.
Even when taking these out of consideration, the public are spending more time on TV than ever before. Earlier, during 2005, an average adult Arab consumer in Saudi Arabia used to spend around 250 minutes on TV - in 2009 it was close to 300 minutes. In markets like Egypt where TV penetration is very high, the trend is the same.
Although the basic factors supporting television as an effective way of communicating the message of an advertiser hold true in the MENA market, the ad spend per capita, or say ad spend on TV per viewer, in the region is much lower than in the west.
Most expect the presence of a people meter in the region to change the media landscape.
The leading advertisers in the region, in the absence of a people meter, do seek externally audited data using Computer Aided Telephonic Interviewing, CATI of which – unfortunately for the industry – there are not many suppliers for important markets in the region. For most markets, the data is not externally audited, with the exception of in Saudi Arabia.
A transparent measuring system will boost spending on television in all likelihood, but the ad spend per capita in the region on other media, namely daily newspaper, weekly and monthly magazines, is also lower compared to other developed nations demonstrating that the absence of a people meter is not the only obstacle to higher ad revenues for broadcasters.
According to recent TGI survey conducted by PARC, in Saudi Arabia 32.7 per cent of the total adult population strongly agree that there are too many adverts on TV.
After a slow start, internet usage has grown significantly since 2000. According to a TGI survey, the key markets in the region witnessed a double-digit growth of internet penetration in 2009. Coupled with the increased use of the web and the desire for greater interaction, low cost social media is now a focus for marketers.
Interestingly, according to TGI Net survey conducted in KSA, UAE and Kuwait 32.3 per cent of the total adult internet users in the region responded that that they watch or listen to TV while surfing online. Hence internet complements - and not competes - as with television viewing in the region at present.
M Shaharyar Umar is an analyst at the Pan Arab Research Center (PARC). The views expressed in the article are those of the author, and not necessarily those of PARC.