The ad buzz

May 2007
Business Today's Top Advertising Spend Survey sees advertising taking centrestage in the marketing efforts of companies

Advertising has a strange way of foretelling the future. Companies world over loosen their purse strings for advertising anticipating better times and tug on them tightly at the slightest hint of trouble. If agencies have more money in their kitty to execute the next campaign, one can safely bet on glad tidings being round the corner. Looking at Business Today's Top Advertising Spend Survey 2006, one can bet one's shirt (and may be the suit as well) on better prospects all around.

Movers and shakers
The big news of the survey - total print media spend in 2006 stood at RO31.7mn, a phenomenal 39 per cent jump over the RO22.85mn recorded in 2005. The figures make for heady reading. As the dream run unfolds, it's an enviable time to be an adman.

The survey throws up two other trends that deserve special mention. One, the promising performance of sunrise sectors like telecom, financial services, retailing etc. Though these sectors entered the market a couple of years ago, they continue to redefine the advertising space with innovative ideas and campaigns. Two, the media industry too has witnessed significant growth. Our 2005 survey included 26 publications. In 2006 this has gone up to 32.

Crosscurrents at work
The old guard automobiles and banking continue to hold their sway on the charts. Banks actually wrested back the number two position from telecom sector in 2006. As a number of new banks like Bank Sohar, Gulf Merchant Group and Bank of Beirut join the fray in 2007, ad spend in the banking sector is sure to go up. The same holds true for automobiles. With the Seventh Plan looking at generating about 200,000 jobs, the demand for cars can only go up.

As the ad spend increases, agencies can be sure of increasing pressure from clients for more creative work and better campaigns. Most agencies are trying to reinvent themselves in sync with the changing times. A number of them have tied up with international agencies, others are experimenting with innovative ideas. Companies have realised that me too ads no longer work. After all there are no free lunches in life.

No. 1 Advertising Spender
Automobile sector
The driving force
No surprises here, automobile sector remains numero uno

The market is dominated by three big distributors - Saud Bahwan Group, Suhail Bahwan Automobiles and Zubair Automotive. Their overall spend accounts for 66.9 per cent of the total spend in the sector.

In absolute terms, automobile ad spend is up from RO4.18mn in 2005 to RO4.75mn in 2006. But, as a percentage, it has fallen from 18.3 per cent in 2005 to 14.9 per cent in 2006.

Around 27 per cent of the total ad spend in the automobile sector is during the two months of Ramadan. The other spurt in spending is in May, owing to summer promotions.

OTE and Reliable International Automotive are the only automobile companies whose percentage ad spend has gone up in 2006

Luxury brands like Mercedes advertise their brands mostly during the peak season, expecting to attract customers all round the year.

Despite intensifying competition, Japanese brands still enjoy an edge in the market.

No. 2 Advertising Spender
Banks
Money and muscle
With more banks entering the fray in 2007, expect ad wars

The banking sector reclaims the second spot after losing it to telecom in 2005.

Despite being a niche bank, the ad spend of Alliance Housing Bank is far more impressive than that of a number of other commercial banks.

The big story of the sector is NBO. The bank muscles its way into the top three, missing the second spot by a whisker, with its percentage share of ad spend jumping from 7.4 per cent in 2005 to 16.3 per cent in 2006.

Banks like HSBC use tactical advertising to stand out in the market. Their ad spend is targeted at a few products.

BankMuscat leads the charge with its advertising spend crossing the RO1mn mark for the first time. Its overall share in the banking sector stands at an impressive 35.6 per cent.

No. 3 Advertising Spender
Telecommunications
Signals of change
Telecom slips to number three position

Telecom advertising spend that made up over 14 per cent of the total ad spend in 2005 have dropped to 9.5 per cent for 2006. The correction this year may be because Nawras has had time to stabilise.

Oman Mobile retains the top spot though its spend has actually reduced in 2006 compared to the previous year. Meanwhile, Nawras' spend has risen impressively and it has moved up a place to settle in at second place.

In the last year, Oman Mobile and Nawras got right back at each other with their respective Mobile Number Portability campaigns, which had different members of the national football team endorsing them. Since then, the direct ad wars between the companies seem to have lost steam.

Omantel's force of spending, seemingly driven by the launch of new products, comes across as comparatively lacking energy. But if talk of a new player in the landline sector materialises, then a spending spree may be on the cards.

No. 4 Advertising Spender
Appliances / Electronics
?Electric competition
Companies and retailers go all out to woo consumers

OHI, number three last year, claims the top spot this year, but close on its heels is Mustafa Sultan Electronics, just 0.1 per cent behind.

OMASCO's spending has slipped enough to land it at third place from its No.1 position last year, but it is still comfortably ahead of the rest of the pack.

Spending on television ads - regular, LCD TVs, plasma TVs and projection TVs - accounts for 38 per cent of ad spend in the Appliances/Electronics category.

Air conditioners make up for the next big ad spend block with 10.3 per cent.

No. 5 Advertising Spender
Financial services
Funding the future
Strong economy propels demand for financial services

The buoyancy in the stock markets has rubbed off on financial services. The sector jumps to No.5 from No.8 in 2005. Call it the IPO effect or the impact of new investors entering the market, the sector seems set to gain traction in the coming years.

Brokerage companies dominate the top ten list. Not only are these companies richer but they are also spending more to attract investors.

No. 6 Advertising Spender
Education
Learning curves
Players in the field of education up the ante

A 40 per cent increase in overall spending in this category marks the increasing competition in the education and training sector, particularly among private players.

The Fire Safety Engineering College takes over the top spot with its ad spend reaching almost nine per cent within the category, compared to 4.5 per cent in 2005.

Higher Education Admission Center makes a confident debut at number three in 2006.

No. 7 Advertising Spender
Shopping Centres
Retail therapy
Fliers have started giving way to print ads

Lulu hypermarket's domination of retailing is absolute. Its percentage share of the sector's ad spend stands at a staggering 47.7 per cent.

Surprisingly, Muscat City Centre's ad spend has gone down both in absolute and percentage terms. This may partially be the result of the construction work underway there, and one can expect it to come back strongly in 2007.

No. 8 Advertising Spender
Petroleum Products
Oil rush
TOTAL and Qalhat LNG make it to the top ten

There's a marginal increase in petroleum products' ad spend. But the category goes down to number eight in the overall rankings from the sixth position it enjoyed last year.

PDO powers its way to the top spot. Within the category, its share zoomed from 8.45 per cent, which made it number five on the list last year, to 20.6 per cent this year. Shell slips a spot from last year to finish at second place.