9 July 2005

DUBAI -- Advertising spend in the UAE outpaced that of Saudi Arabia during the first three months of this year amounting to $206 million against the Kingdom's $203 million.

According to a survey carried out by Arabian Research Company, this is the first time in the past six years that ad spend in Saudi Arabia has fallen behind that of the UAE.

Overall, advertising spend in the Gulf region increased by 25 per cent to $943 million during the first quarter of this year compared to $753 million for the same period last year.

However, some media agency executives believe the current drop is only temporary and full-year figures will show that that ad spending in Saudi Arabia will higher than in the UAE.

"Saudi Arabia is the biggest market in the Gulf region and I doubt that the UAE will be ahead of Saudi Arabia at the end of the year. This increase is only temporary," a Dubai-based media executive said.

"Of course, the ongoing boom in the real estate has fuelled advertising activities in the UAE, with the government promoting new mega projects, but we should wait and see the year-end figures and I believe that this increase is only for three months and the first quarter of the year is always active," he added.

Another Dubai-based advertising official said that the first quarter increase in advertising spend in the UAE compared to Saudi Arabia is not a temporary phenomenon, but a fact, which will lead to a long term trend that will eventually put the UAE ahead of Saudi Arabia in terms of ad spend.

He said: "If we look at 10-year statistics, we will see that difference in ad spending between the UAE and Saudi Arabia has been getting thinner on year-to-year basis because of the scope of business in the UAE and its increasing purchasing power.

During the past one and a half years the UAE has launched mega projects that involve billions of dirhams in investment and obviously a lot of spending in promoting and marketing those projects. All this combined with the increasing population and it purchasing power will surely put the UAE much ahead of Saudi Arabia in terms of ad spending."

The study also showed that overall in the Gulf region the advertising spend recorded 25 per cent increase also fuelled by the ad spend in Qatar and Oman. Qatar recorded 158 per cent growth from $12 million to $33 million during the first quarter of this year.

The UAE ad expenditure grew by 41 per cent to Dh2.32 billion last year compared to Dh1.64 billion in 2003. The UAE in 2004 stood the second in the Middle East region after Saudi Arabia in terms of ad spending with a difference of $68 million. Advertisement in the Kingdom stood at $700 million (Dh2.57 billion) last year. Last year the advertising expenditure in the AGCC increased by 38 per cent compared to the previous year. The automotive advertising spend amounted to around $171 million, while the television advertising totalled about $55 million, recording an increase of 67 per cent.

Meanwhile, the outdoor advertisement industry in the Gulf region is expected to record a turnover of Dh522.7 million, a growth of around 20 per cent compared to Dh435.6 million last year, according to industry estimates. The outdoor advertisement is expected to grow considerably in the UAE and the Gulf region during this year to cope with the construction boom and major real estate projects being carried out in the region.

BY JAMILA QADIR

© Khaleej Times 2005