Apr 29 2014
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Digital Advertising Spend to Reach $1B in the MENA by 2017
Global ad spend is on track to grow by 5.5% this year and reach $537 billion, with online ad spend accounting for nearly one-quarter of the staggering amount. The global growth of the advertising sector is paralleled closely in the MENA region: digital ad spend in 2013 reached $300 million, and is increasing at 37% per year to reach an astounding $1B in 2017. "Digital advertising is the fastest growing segment in the region - and not surprisingly," says Tom Roychoudhury, Chief Innovations Officer of Middle East Communications Network (MCN). "With a majority of the population under 25 - who spend a significant portion of their wake time online, digital advertising is the only real channel for brands to engage today's target audience in the region. The GCC leads this, with the UAE, KSA and Qatar on the digital ad market leaderboard.
Global interest in mobile advertising is also surging: mobile ad spend grew 105% in 2013 and is expected to reach $31.5B globally. This is also mirrored in MENA, where mobile ads grew by 58% to reach $85 million this year (compared to $50 million last year). "Smartphone penetration and hours spent online in the Arab world, and the GCC in particular, are amongst the highest worldwide," says Zafer Younis, co-founder at The Online Project. "Traditional media in these countries is still heavily controlled and monitored by the government. So, I do expect our region to be fast in switching to digital. The consumers have already made the shift, advertiser will follow shortly."
The increasing interest in digital and mobile advertising is disrupting the traditional business of ad agencies, many of whom are restructuring their organizations and building digital capacities to enable them to better serve their clients' digital marketing needs. Chief Innovation Officers, like Roychaudhury and Yousef Tuqan of Leo Burnett, are in many cases charged with leading this transformation. "We have seen the steady evolution of communications & content from analog to digital, and from digital to mobile and social," states Tuqan. "Any successful communicator, in the GCC or anywhere else, must adapt to this new paradigm."
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