BusinessToday's Top Advertising Spends Survey underlines the growing clout of sunrise sectors in Oman's economy
2005 has been a remarkable year for the advertising industry in Oman for a number of reasons. The entry of new publications gave advertisers enhanced choice. This, coupled with increased competition, saw advertisers experimenting with media innovations like full page ads, jackets and inserts. New mediums like outdoor and SMS advertising, which started hesitantly, spread furiously. "Last year saw the mindset of publications and clients changing. While the pace may be slow, it is still a good beginning," says Ajit Singh, manager, Asha Advertising and Marketing Agency.
BusinessToday's Top Advertising Spend Survey 2005 gives you a ringside view of all the action. The big news of the day print media spends have hit an all time high of RO22.85mn.
The party does not end here the number of categories on the list of advertisers add up to over 100. While the traditional sectors like automobiles, banks and petroleum products find a place at the top of the listing, sunrise sectors like telecom, retailing, education and training have powered their way into the top ten too.
The survey brings you the most comprehensive listing of advertisers ever done in Oman. A word about the methodology followed by the report. The survey takes into account advertisements across all the seven Arabic and English newspapers and 19 magazines that are locally published in Oman. These ads are then multiplied by the standard rate card rates for advertising in the respective newspapers and magazines. The final figures are arrived at by adding these numbers.
We would like to add a rider. The industry sees publications offering discounts of varying percentages on its standard card rates for advertisements. The percentage of discounts offered varies from client to client and from issue to issue. Given such discrepancies, any scientific survey cannot be based on market figures (discounts) and the survey therefore bases itself on the official rate card of various publications.
The big picture
Automobile advertising continues to be the biggest category on the charts with an ad spend of over RO4.18mn. The sector makes up 18.3 per cent of the entire advertising kitty.
While the performance of the automobile sector is on expected lines, the biggest surprise of the survey is the strong showing of telecom on the charts. The telecom sector makes it to the runners up spot, relegating banks to number three position.
Automobiles, telecom and banks make up the big three on the charts accounting for over 41 per cent of the total ad spend. The spend drops drastically from RO2.09mn in the case of banks to RO863,750 for consumer durables and electronics, the next sector on the charts. The market remains a top heavy one with the top ten categories accounting for 62.75 per cent of the total ad spend. Let's take a closer look at the top five sectors to get a handle on the broad trends in the market.
Automobiles
Been there done that
There are no surprises here, the automobile sector continues to hold on to the numero uno position on the survey a reflection of the success and profitability of the sector in Oman. Automobiles generate a passion unlike any other product category in the local market, with mobile phones coming a close second.
The Saud Bahwan Group (SBG), with an outlay of RO1.36mn (a 32.5 per cent share of the total automobile ad spends), is the biggest advertiser in Oman. The SBG stable comprises stellar brands like Toyota, Lexus, Ford, Daihatsu, Man and Komatsu.
"As an aggressive marketing company, we strongly believe in the power of communication and advertising.
As a result our advertising budgets continue to remain high and in fact have increased over the last year," says an SBG spokesperson. The leadership position of brands like Toyota and Lexus in Oman is largely the result of the groups effective marketing and communication strategy. SBG is followed by OTE (15 per cent of the total automobile ad spends), Suhail Bahwan Automobiles (12.8 per cent), Zubair Automotive (8 per cent), Reliable International (5.1 per cent), Al Jenaibi International Automobiles (3.5 per cent) and MHD (3.4 per cent).
A flurry of new launches such as the Toyota Fortuner and Innova and new models of Hyundai Sonata, Land Rover and Range Rover helped boost ad spends. Pankaj Joshi, marketing manager, Suhail Bahwan Automobiles, says, Ad spends in the last one year have seen an increase. There has been sustained activity over the previous year with a slew of product launches like Altima, Armada, Murano and Tiida as well as various promotional campaigns. All this ensured that the media activity level was on the rise.
The focus is not merely on increasing ad spends but more on targeted advertising. A number of companies have concentrated on getting their communication across in the most effective manner. David Aziz, director, automotive products, MHD, says, Over the last one year we have worked towards focusing our ad spend on publications and activities which specifically target our potential customers. We are not in the mass car market and the marketing budget is linked to each unit which we put on the roads in Oman.
The sentiments are echoed by Bob Seshadri, group marketing manager, Zubair Automotive, We have been more judicious on advertisement spends. We are selective about the media we use and the vehicle that we use to promote our products and the brand. We are more marketing driven as opposed to advertising driven, and all our programmes are customer centric.
Automobile distributorships have been using both above the line (ATL) and below the line (BTL) advertising as a prudent step. Multiple channels like outdoors, SMSs, retail offers and direct mailers are all being used to get their message across. Seshadri says, ATL is the route for brand building, while BTL is for retail more to generate a call to action. If you work out a combination between the two, which can then occupy a higher percentage of mind space to trigger top of the mind recall. Sponsorship of events is catching up fast. Aziz says, We have taken up event sponsorships in a big way. We follow up each event sponsorship with press releases in English and Arabic dailies to capitalise on the interest generated around these programmes.
Despite the proliferation of media vehicles, reaching out to customers in the interior areas remains a challenge for most automobile distributors. Given the geographical isolation of some of the interior areas, traditional advertising may not work.
An SBG spokesman says, We have noted that the traditional mass media has a limited reach, especially in the interiors, so we have relied far more on non-traditional activities including various shows, sponsorships of local events, product displays and other aggressive direct contact programmes. The automobile sector is comfortably perched on the top of the table, but it needs to watch out for the next biggest mover the telecom sector that is fast breathing down its neck.
Telecom
Cat among the Pigeons
With the government opening the telecom market, an ad war between the old and new players was expected. But what has taken everyone by surprise is the intensity with which the players moved into the arena.
The runner up status of telecom sector in such a short time is the surprise factor, more so as it relegates banks traditionally one of the biggest spenders to the third position. It may be noted that the new player, Nawras, entered the market only in the second quarter of 2005 triggering the great telecom ad war.
The sectors ad spend of RO3.27mn is dominated by the big three Oman Mobile, Omantel and Nawras.
These three together account for 98.66 per cent of the total telecom ad spend. Oman Mobile dominates the charts with a 46.01 per cent share, followed by Oman Mobile (30.74 per cent) and Nawras (21.91 per cent).
Analysts see the entry of Nawras as the biggest reason for the sectors impressive performance. What is more creditable about the 21.91 per cent ad share which Nawras has notched up is the fact that its ads were in the market only in the last three quarters of the period under study. The ads depicting Oman Mobile and Nawras offers and counter offers reminded one of the classic Coke-Pepsi and Pepsodent-Colgate advertising wars.
Though the sector has had a dream run the million dollar question remains will the party last Market watchers expect telecom to continue its promising showing in the years to come as the category is expected to grow.
Global experience shows that companies in many related categories have gone through a phase of exponential growth and have grown with the category. Nokia is a prime example of the trend. With mobile penetration still at 56 per cent and with the sector having grown at 38 per cent during the last eight months all signs point to a good year ahead.
Sceptics though, are not too sure. Singh reasons, When a new player comes in, we usually see ad spends going up but after some time spends tend to stabilise at a lower level. One way or the other, telecom is a sector that we need to keep a close eye on.
Banks
Rock steady
Overall, it has been a bittersweet year for the banking sector. The bad news is that they have conceded their second rank to telecom. The good news is that even though they have slipped one notch, they continue to be among the big three spenders along with automobiles and telecom.
BankMuscat dominates the sector with an ad spend of RO671,581. This makes up 32 per cent of the spends of the banking sector. Moreover, BankMuscats spends are more than double that of its closest competitor, Oman International Bank, that has a 15.2 per cent share. Oman Arab Bank (8.3 per cent), Alliance Housing Bank (7.8 per cent), National Bank of Oman (7.4 per cent) and Bank Dhofar (6.6 per cent) follow.
The highlights of the year were BankMuscats consistent advertising for a range of products like Basma card, Al Mayazona scheme, e-banking and its other customer initiatives. Oman International Bank created quite a flutter in the market with its advertising blitzkrieg for its one million-rial Mandoos prize scheme.
With the expected merger of BankMuscat and NBO not going through, NBO made a comeback of sorts after lying low for some time. With the real estate market experiencing a period of heightened activity, Alliance Housing Bank got aggressive on the home loan front. Says AbdulRazak Ali Issa, chief executive, BankMuscat, What is far more significant than our increase in ad spend is the attempt to make our communications far more impactful and effective, both in terms of content and spend patterns. The advertising that we see in the sultanate today is far more intelligent than than what we have seen in the past. This is good news for the customer who today, can look forward to competing organisations trying to win his/her attention through advertising that is both inspiring and entertaining.
With the emergence of new sectors like retail, telecom and real estate, are the banks feeling the pressure of enhanced competition? Says Vivek Kudva, general manager, banking, NBO, Advertising in Oman is not cluttered yet. Catching eyeballs is essentially a function of the message and the way it is communicated.
Going forward, we do expect the clutter to increase, given limited media reach. Therefore, advertisers will need to get more innovative to ensure effective and clear communication to the target audience.
Given the strength of the banking sector in Oman, with new products and tie-ups, the sector is sure to continue as one of the heavyweights on the charts for sometime to come. Having said that, it may have to be noted that the sector need not get complacent as several new players are waiting in the wings.
Electronics
On the tech track
Number four on the top ad spend list, electronics and household appliances make for a category where constant improvements in product profiles lay the groundwork for changes in advertising strategy. Our survey shows that the top three ad spends within the category, with percentages in double figures, are in one league, while the rest of the pack is in another.
Omasco, with 33.68 per cent share, leads the category. Forming a close league for the second and third positions are Mustafa Sultan Electronics and OHI Electronics at 22.31 per cent and 19.78 per cent respectively. They are followed by Genetco (3.77 per cent) and OTE (3.5 per cent). The companies following the top five, among them Khimji Ramdas (2.53 per cent), MHD (1.48 per cent) and Naranjee Hirjee (0.82 per cent), trail behind the leaders but arent too far from each other.
As products get smaller and work faster, choices grow on how to best advertise them. For T Devan, general manager, OHI Electronics, the choice is the print media rather than events. Single event sponsorships do not make a lasting impact on the minds of a consumer as compared to a more strategic and prolonged ad campaign through the print media, he says.
George Alexander, divisional manager, Consumer Electronics Division, Omasco, believes that the lack of audited data in the advertising market makes it difficult to judge the effectiveness of various mediums.
Most of the time we go with our gut feeling. But with electronics and any other retailing for that matter database marketing is the future.
For companies like Mustafa Sultan Electronics, tactical advertising and road shows are a preferred choice.
Sanjeev Nagpal, general manager, Mustafa Sultan Electronics, says, When you have limited resources, tactical advertising helps. So, generally, we do not focus as much on brand building as we do on advertising during a sale or promotion.
Strategic tie-ups are also part of the ad march. The thing about tie-ups is that they split up your costs. It is a win-win situation. And also you are giving some value addition to the consumer, Nagpal explains.
While the category remains a fragmented one with no clear choice about the preferred medium to advertise, the power of many makes it an important category.
Shopping Centres
The rise of the high flyers
Considering the growth and competition that the retail sector in Oman has experienced in the past few years, the numbers putting this category at the fifth position among the top spenders for 2005 do not come as a surprise. With a 3.59 per cent share of the total ad spend, the mall culture, ever expanding to cater to the needs of customers demanding variety, has arrived. And its key players have the money muscle to flex to make their ad bases bigger.
The clear leader of the pack in this category is Lulu Hypermarket. With a 33.65 per cent share of the ad spend within the category, Lulus numbers are almost triple the figures reached by Muscat City Centre, second on the list with an 11.42 per cent share.
It might seem like a two-horse race, when you look at the percentages raked up by the shopping centres that make the top five in the category. The ad spend shares of City Plaza, Markaz al Bahja and Safeer Hypermarket are 4.9 per cent, 4.8 per cent and 4.5 per cent respectively. But the leaders have competition close on their heels. There is not much separating Salam Stores (3.5 per cent), Al Jadeeda Stores (3.3 per cent) and Al Fair (3.08 per cent), among the others that complete the list.
V Nandakumar, advertising and promotions manager of the Emke Group (which owns the Lulu Hypermarkets), believes that an all encompassing approach is the key to successful advertising.
Apart from using traditional print and electronic media, we also use the door-to-door delivery system for our promotional leaflets, he says, adding, We have always relied upon a mix of both above-the-line (ATL) and below the line (BTL) advertising.
Markaz al Bahjas ad spends have gone up by 20 per cent in the last year. John Jose, gene-ral manager, Markaz al Bahja, says, When it comes to shopping centres, how well you advertise is just as important as how quickly you advertise.
How well you combine consistency with innovation to create an association marks movement as well. For a sector whose shoppers are primarily impulsive and prone to making decisions based on visual appeal, the importance of presenting an image that endures cannot be denied. And that is where the now popular flyer phenomenon comes in. On the doorsteps of consumers, with their newspapers, and as a given in their shopping carts, the flyers with colourful pictures and discounted prices make for a trend thats quickly catching on.
Rajeev Rampal, administration manager, Al Safeer Group of Companies, informs that their flyers are sent out twice a month, covering the area from Muscat to Sohar. Rampal says that the companys in-house advertising agency, in operation for about a year now, is the force behind their flyer strategy. The flyers reach more people more effectively, he says.
Asha Advertisings Singh disagrees with this. The trend has caught on but I think it is a wastage. I can understand if a small shop in Ruwi is trying to do a promotion by distributing flyers, because its coverage area would be limited. But for a major company, with a countrywide audience, it is not effective.
There are no arguments, however, that reaching the maximum number of people effectively is the idea. And options have to be exercised in the process. Outdoor advertising is another concept adding to the mix.
Markaz al Bahja will be just about commencing with its outdoor advertising plans. Jose sees it as an efficient tool, particularly when worked in contrast with exclusive events where select customers preview products and services before anyone else. Nandakumar says, We do not use outdoor advertising in a big way but the billboards and hoardings located at strategic locations near our outlets serve the purposes of promotion and brand building.
Towards brand building, Jose emphasises that what works in the advertising of one product might not work in advertising another. While drawing up advertising plans, we have to keep in mind that an accent on exclusivity works for certain products and brands. It is not practical to try and reach everyone there.
Targeting specific groups of shoppers across the various mediums of advertising is also making its way as one of the keys to ensure uniform consumer reach. The Emke Group has launched a multilingual television campaign on Arabic, Hindi and Malayalam channels, which have a Pan-Arab reach, as a move towards the road ahead. Explaining the move, Nandakumar says, We will be combining this with a focus on interactive programmes and game shows.
The final word
The mood in the advertising industry is upbeat. Looking ahead, analysts expect the sectoral base to spread further as a number of tourism related projects take shape and the economy continues to take promising strides. Ad spends are expected to increase as new ventures in the manufacturing sector take off. New mediums like television and outdoors are sure to give a new vibrance to the advertising scenario. Looking inward, the client agency relationship is going through a metamorphosis as the concept of retainership takes hold. This should bring in a measure of stability in the industry leading to better quality of work. Finally the year 2006 looks set to build on the good work done last year. Keep watching this space for a low down on another interesting year.
businesstoday 2006
