Resisting the economic downturn, top advertisers in the country are spending almost the same amount on advertising this year - if not more. This was recently revealed by the third quarter advertising figures by Pan Arab Research Centre.
With the exception of real estate developers, most top end advertisers in the five basic categories remained unchanged. List of top 12 advertisers on television, newspapers, magazines, radio and outdoor is occupied by more or less the same players.
Etisalat, for the third year in a row, remained the highest spender on advertising in the country amounting to $22.84 million (Dh83.83m) in the first three quarters of 2009. Media planners believe it will cross last year's figure of $29.02m, with one more quarter left to spend, which is a high season with Eid, Christmas and the year-end attracting many tailored campaigns.
Some of the real estate developers, including Hydra, Dynasty Zarooni, Deyaar and Damac remained top advertisers in most categories, but du - the other telecom operator in the country - remained over all second in the ad spend list with $12.94m last year.
Du, which is Dubai-based, has already spent more than $22m in the first three quarters of this year and industry observers believe it will "probably spend as much as etisalat, if not more, by the end of this year".
The UAE government and its associations also contributed the most to the otherwise depleting advertising budgets. Most government associations figured in the top 12 slot in the five basic categories with a spend of $79.28m and a total spend of $269m. This was the single largest share (26 per cent) of the ad spend budget.
However, this was 11 per cent decline in their ad spend in comparison to the entire 2008. In contrast, there was a 30 per cent decline in the advertising industry budget until the end of the third quarter of 2009.
"Real estate was the main driver of advertising in the country last year. Most agencies, including ours, were enjoying big billings. With the collapse of that industry, our billings have been affected," Ali Asgar, Chairman and Managing Director of Ikon Advertising and Marketing Services had told Emirates Business earlier.
"However, fast moving consumer goods have replaced these large billboards of real estate projects, perhaps not as much in number but enough to fill the void and maintain a sustainability on the industry," said Asgar.
For now, Ikon Advertising is increasing its business activities in the FMCG and retail industry and is witnessing a steady improvement since the beginning of H2 this year, said company officials.
In an unprecedented restructuring of media spend, most brands revised their campaigns. While newspapers saw the biggest dent in the billings (from $1.02 billion in 2008 to $55.8m in 2009's three quarters), radio was the biggest gainer.
This year saw an increase of advertising spend by the top 12 spenders on radio, which almost doubled to $6.24m compared to last year's spend of $3.46mn.
Reena Bedi, marketing head of Shoemart diverted a major chunk of her advertising spend on radio and introduced short-time advertising commitments in other mediums. "Most of the 2009 has been a wait-and-watch scenario with retailers keeping a close watch on the market," said Bedi. "Since we carried on with our expansion plans, our advertising had to continue, but we were more careful and calculative about every advertising dollar spent."
Bedi said radio was one of the cheapest mode of mass communication, which delivered instant results, especially for tactical campaigns.
Etisalat and du maintained their top spending slots in the top three positions in both the years on radio, but other top spenders that climbed up in the top 12 list of spenders were in the medium range. Only Nakheel from the real estate maintained a large spend on radio, featuring at number nine.
While radio worked for some, other advertisers gained their faith in magazines. Home Centre increased their ad spend on magazines to $1.15m a gain of seven per cent over the last year to take the top spot of ad spender in the magazines. Last year, Home Centre was at number three slot with a total ad spend amounting to $1.39m.
"Our media plans have taken a marginal shift to magazines and despite the current economic downturn, our commitment to magazines will remain the same, if not more," said Deepak Goyal of Home Centre.
As the downturn continues, the regional industry is making self-imposed corrections and depending more on the FMCG sector. "This is more than a silver lining and appears to be a lasting solution," Asgar concluded.
By Vigyan Arya
© Emirates Business 24/7 2009
