05 September 2008
A recent report issued by the Pan Arab Research Centre (PARC) showed that the Gulf advertising sector is in good health, with advertising expenditure up over the first six months of the year, though rising at a more cautious pace in Bahrain than in the rest of the region.
The PARC's report, issued in late August, showed that spending on advertising in Bahrain rose by 2%, from $49m in the first half of 2007 to $50m in the first half of 2008. Meanwhile, advertising in the Gulf region has risen by 23.6% in the first half of 2008 to $3.77bn.
While advertising expenditure may be up in Bahrain, the rate of increase appears to be one of the lowest in the Gulf region, behind only that of Qatar, which saw a 1% rise in spending in the first six months of the year. However, since Qatar's advertising expenditure was more than three times that of Bahrain over this period, the actual increase in dollar terms puts the kingdom in last place on the rankings as far as spending growth is concerned.
The rise in expenditure on advertising is also falling well behind the growth of Gross Domestic Product (GDP), which analysts predict will expand by between 6 and 10% this year.
The figures also show that Bahraini advertisers have yet to fully embrace the new media as a main outlet for promotional activities. According to PARC's report, 84% of all advertising expenditure in the kingdom over the past six months, equaling $42m, was directed to the print media, with newspapers accounting for 63% of the total, while the remaining 21% went to magazines.
Television advertising represented just 13% of the overall budget, with the remaining 3%, accounting for $1m, posted across billboards and other outdoor advertising, cinema and radio. The non-print media's share of advertising funding has gradually slipped backward since the first quarter of 2005, when it accounted for 28% of expenditure, with television comprising 23% of the total.
Khamis Al Muqla, the president of the International Advertisers Association (IAA) Bahrain Chapter, and chairman of the local advertising agency Gulf Marcom Group, had warned that spending in July and August would be down due to the lower activity in the summer months.
However, in a statement issued on August 26, Al Muqla said expenditure levels should pick up from September onwards and the year-end total should exceed the $110m of last year.
Among other factors, the small size of the domestic market and the increasing role being played by pan-Arab media, mainly satellite television, have significantly contributed to the slow pace of growth in the Bahraini advertising industry. Indeed, advertising spending on satellite television in the first quarter of this year was $1.57bn, accounting for over 41% of the regional total.
Understandably, large-scale companies seeking to promote products across the region may rather spend their advertising budget on forms of media that reach a wider audience than having material produced to target a specific national market.
Besides, Bahrain has to compete with other major advertising centres in the Gulf when it comes to international agencies setting up shop. While the kingdom has had marked success in attracting players in the global finance industry, many of the world's largest agencies have chosen to base their Gulf operations in the United Arab Emirates. These include Leo Burnett, Ogilvy & Mather and JWT.
One exception is the Middle Eastern arm of the international agency M&C Saatchi, which opened its first regional office in Bahrain in April. The announcement in mid-August by Gulf Craft, the largest boat and yacht manufacturer in the Middle East, to sign on with the agency, joining such clients as Investment Dar and the government of Bahrain, indicates the sector's fortunes could be on the rise.
However, changes are slow to come and according to Khamis Al Muqla, Bahrain needs to push both the private sector and the state to invest in marketing and advertising campaigns to accelerate growth in the market in the future.
A recent report issued by the Pan Arab Research Centre (PARC) showed that the Gulf advertising sector is in good health, with advertising expenditure up over the first six months of the year, though rising at a more cautious pace in Bahrain than in the rest of the region.
The PARC's report, issued in late August, showed that spending on advertising in Bahrain rose by 2%, from $49m in the first half of 2007 to $50m in the first half of 2008. Meanwhile, advertising in the Gulf region has risen by 23.6% in the first half of 2008 to $3.77bn.
While advertising expenditure may be up in Bahrain, the rate of increase appears to be one of the lowest in the Gulf region, behind only that of Qatar, which saw a 1% rise in spending in the first six months of the year. However, since Qatar's advertising expenditure was more than three times that of Bahrain over this period, the actual increase in dollar terms puts the kingdom in last place on the rankings as far as spending growth is concerned.
The rise in expenditure on advertising is also falling well behind the growth of Gross Domestic Product (GDP), which analysts predict will expand by between 6 and 10% this year.
The figures also show that Bahraini advertisers have yet to fully embrace the new media as a main outlet for promotional activities. According to PARC's report, 84% of all advertising expenditure in the kingdom over the past six months, equaling $42m, was directed to the print media, with newspapers accounting for 63% of the total, while the remaining 21% went to magazines.
Television advertising represented just 13% of the overall budget, with the remaining 3%, accounting for $1m, posted across billboards and other outdoor advertising, cinema and radio. The non-print media's share of advertising funding has gradually slipped backward since the first quarter of 2005, when it accounted for 28% of expenditure, with television comprising 23% of the total.
Khamis Al Muqla, the president of the International Advertisers Association (IAA) Bahrain Chapter, and chairman of the local advertising agency Gulf Marcom Group, had warned that spending in July and August would be down due to the lower activity in the summer months.
However, in a statement issued on August 26, Al Muqla said expenditure levels should pick up from September onwards and the year-end total should exceed the $110m of last year.
Among other factors, the small size of the domestic market and the increasing role being played by pan-Arab media, mainly satellite television, have significantly contributed to the slow pace of growth in the Bahraini advertising industry. Indeed, advertising spending on satellite television in the first quarter of this year was $1.57bn, accounting for over 41% of the regional total.
Understandably, large-scale companies seeking to promote products across the region may rather spend their advertising budget on forms of media that reach a wider audience than having material produced to target a specific national market.
Besides, Bahrain has to compete with other major advertising centres in the Gulf when it comes to international agencies setting up shop. While the kingdom has had marked success in attracting players in the global finance industry, many of the world's largest agencies have chosen to base their Gulf operations in the United Arab Emirates. These include Leo Burnett, Ogilvy & Mather and JWT.
One exception is the Middle Eastern arm of the international agency M&C Saatchi, which opened its first regional office in Bahrain in April. The announcement in mid-August by Gulf Craft, the largest boat and yacht manufacturer in the Middle East, to sign on with the agency, joining such clients as Investment Dar and the government of Bahrain, indicates the sector's fortunes could be on the rise.
However, changes are slow to come and according to Khamis Al Muqla, Bahrain needs to push both the private sector and the state to invest in marketing and advertising campaigns to accelerate growth in the market in the future.
© Oxford Business Group 2008
