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Dubai: Fuelled by a growing economy, advertising spending in the UAE has increased from $869 million in 2005 to $1.3 billion in 2007, the highest in the Middle East.
The 2007 Advertising Spend Report of Pan Arab Research Centre showed that the bulk of the money, about 64 per cent, went to Arabic and English newspapers.
Television accounted for 16 per cent of the advertising spend, while magazines got 13 per cent. Another two per cent went to radio commercials, five per cent to outdoor ads and one per cent to cinema adverts.
The UAE's top spenders are popular brands that are into the real estate, telecom, jewellery, airline and food industries.
A market analysis obtained from Cannes Lions, the organiser of the Dubai International Advertising Festival, predicted the UAE's advertising expenditure will shoot up to $2.4 billion next year.
It was also estimated that the UAE's advertising share of the gross domestic product will soar from only 0.35 per cent in 1999 to 1.21 per cent next in 2009. Likewise, the advertising expenditure per capita in the country has expanded from $64.2 in 1999 to $213.1 in 2005.
Various factors
Experts in the industry attributed this growth to the real estate boom, population expansion and the continuing maturity of the media industry.
"The significant growth of new industries such as the real estate, government and financial sectors has created new powerhouses in terms of advertisers that had previously not existed and consequently, the contribution to the advertising and media industries' top and bottom lines have also grown exponentially, said Nassim Ghrayeb, chief executive of market research firm YouGovSiraj.
Pierre Pereira, chief executive of Stroer Concept, said the UAE's property boom has seen the real estate market take the lead role in advertising, with large amounts of foreign investments pouring in, coupled with privatisation.
"The Dubai Metro will have a major impact and will probably double the market size within the initial years. The inclusion of the new double-deckers, water taxis, and the sheer increase in numbers coupled with the RTA (Roads and Transport Authority) plans for more tolls and dedicated lanes, will see a movement from private cars to public transport and therefore see a larger spend towards transport media in the long term," Pereira said.
Satish Mayya, senior vice-president and chief operating officer of Bates PanGulf Media, said the booming economy has seen more players in the advertising market trying to grab consumer attention.
"Property growth undoubtedly contributed to the overall advertising boom in the UAE, along with the growth in telecom advertising spend," said Mayya.
"And with limited media options especially on newspaper front, advertiser and advertising agencies have to work out innovative ideas and explore new media opportunities."
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