Market liberalisation brought on 'natural increase' in marketing, promotion
AMMAN -- Liberalisation and competition are driving the boom in Jordan's advertising sector, with expenditure on ads almost doubling in the past five years and insiders confident of a steady upward trend of over 25 per cent growth in 2005 and 2006.
According to the Jordan chapter of the International Advertising Association (IAA), advertising expenditure totalled $114 million in the first nine months of this year, up from $87 million in the same period of 2004.
From $77 million in 2000, advertising expenditure rose to $92 million in 2001 and $118 million in 2002, slumped to $96 million in 2003 and surged back to $121 million in 2004.
"The decline registered in 2003 was mainly due to the Iraq war," comments IAA-Jordan Chapter's President Sharif Abu Khadra.
"But apart from this temporary recession due to regional political circumstances, the sector has been witnessing exponential growth over the years, and we anticipate a further increase in spends for 2006."
The advertising boom is mainly attributed to the opening up of strategic sectors -- telecom and banking -- and the arrival of multinationals after an aggressive liberalisation process culminated with membership into the World Trade Organisation and free trade agreements with the US and the EU.
"With the effects of liberalisation, with the economy moving to an open market situation, there has been a natural increase in advertising and marketing expenditure," comments Abu Khadra, who also heads the Jordan office of global advertising giant Team Young and Rubicam.
Not only much more money is being spent on commercials and publicity in general, but the advertising business is rapidly evolving in all its aspects: Tools, media, advertisers, target audiences, types of products advertised and messages delivered are all dramatically changing.
Companies are dropping tactical short-term ads to invest more in longer-term brand-building and re-branding campaigns.
There are new daily newspapers, periodicals, radio stations, and there will soon be new, private TV stations. The high mobile telephone penetration and the slower but persistent spread of the Internet opened the door to SMS and e-mail advertising.
Soft drinks -- to provide another example of how dramatically the advertising scene has changed -- used to be the most advertised products until five years ago. Today they do not even rank among the top five advertised products. The soft drinks promotion space in newspapers and on billboards has given way to telecom companies, banks, restaurants and automobiles.
Though it is registering impressive growth, Jordan's advertising sector still lags behind compared to other countries in the region.
The UAE is by far the largest Arab advertising market, with a 73 per cent growth in the first half of this year compared to the same period of 2004 -- from $343 million to $594 million. Saudi Arabia follows a similar trend, with a 41 per cent growth in media expenditures, from $281 million in the first six months of 2004 to $395 million in the same period of 2005.
Where to advertise
The press remains by far the first choice of advertisers in Jordan.
According to the IAA-Jordan Chapter, 82 per cent of advertising expenditures go to newspapers and magazines. The launch of Al Ghad newspaper and of several Arabic and English weeklies and monthlies last year contributed to the jump in print media advertising expenditure from $70 million in 2004 to $90 million in 2005.
Outdoor advertising is still a distant second, with only seven per cent of the total advertising expenditure in the first nine months of 2005, followed by TV, with six per cent, and radio, with five per cent.
Though its market share remains low, radio has witnessed the most dramatic increase in advertising spend -- 110 per cent -- in the first nine months of 2005 compared to the same period last year.
"This is mainly due to the launch of new private radio stations," comments Abu Khadra.
Generally counted amongst the "traditional" media, outdoor advertising is a relatively new phenomenon in Jordan, which insiders say really expanded only after 2000.
"We all spend most of our time driving around, and this is why outdoor advertising is so effective," says Rania Daniel, associate sales manager at Pikasso Jordan, which specialises in 4x3 metre billboards and 14x4 metre unipoles.
A Lebanese company, Pikasso opened shop here in 2000 with five employees, and grew to employ almost four times as many people today.
The fact that the overall number of outdoor advertising companies is steadily growing is another indication of the sector's vitality.
A whole new business
With mobile telephone penetration having reached the 50 per cent mark, business leaders paint a very bright picture for the future of one of the sector's newest tools: SMS advertising.
"We have a database of 290,000 subscribers, but we expect that to grow very fast to hopefully reach a million," says Jad Makdah, CEO at JorMall.
Makdah's company ventured into SMS advertising in 2002, after having treaded virgin territory with another "unconventional" advertising media: E-mail ads.
SMS and e-mail advertising represent a much cheaper option than ads on "traditional" media, including outdoor.
But with big savings come also big space constraints with SMS ads -- 160 Latin characters or 70 Arabic characters -- and the risk of being ostracised as "spammers" with e-mail ads.
"JorMall's database includes only contacts who voluntarily registered," stresses Makdah. "If anyone wants to unsubscribe, all he/she has to do is click on `unsubscribe'."
In addition to utilising new tools, the advertising business has also enriched itself with new functions, strategies and concepts.
Branding is the new name of the game for old and new companies seeking to establish themselves in the market and communicate their identity to consumers.
"It's not just about changing colours, it's about coming to grips with a new identity," explains Bengt Eriksson, general manager of Landor in Dubai and responsible for Landor's operations in the MENA region.
"Changing a company's look without changing the behaviour of its employees would be like putting lipstick on a gorilla. This is why, for example, we also offer training to our customers."
Landor has been behind some of the most successful branding and re-branding operations in Jordan: It was the architect of the transformation of the old Jordan Telecommunications Company into Jordan Telecom after its privatisation in 2000, it re-branded Alia Airlines into Royal Jordanian almost 20 years ago, and more recently it has re-branded the Bank of Jordan. It is now working with the Jordan Tourism Board to brand the Kingdom.
"It is a costly business: Everything has to be changed, from corporate identity to signage, vehicles and employees' attitudes," sums up Eriksson.
By Francesca Sawalha
© Jordan Times 2005
