Has online's time come?

zoom

Roberts says the crisis will create positive changes in the media industry.

Brands are likely to widen their media choices as the downturn increases focus on RoI, experts say.

As the global economic crisis bites into different sectors of Gulf economies, brands are looking at ways to make the best out of their advertising buck. Real estate companies that have made up a large percentage of regional advertising spend have sharply reduced their expenditure.

As a result, newspaper advertising has declined and is expected to drop substantially lower this year. On the other hand, radio and online media are perceived to have gained.

"We will certainly experience a rise in online. In times like this it's in clients' interests to focus on areas where they have a firm hand on accountability and results, and online provides that," says Kamal Dimachkie, managing director of Leo Burnett UAE, Kuwait and Lower Gulf. Leo Burnett is the ninth largest agency in the world.

Dimachkie believes online media have been experiencing growth in the region, and that it will continue. Worldwide figures seem to indicate a similar trend. Global advertising is projected to fall 0.2% in 2009, while online media is expected to grow at 18%, according to Publicis' ZenithOptimedia Group.

UAE-based real estate companies such as Dynasty Zarooni, Deyaar, Nakheel and Emaar came top of the list in newspaper advertising last year between January and September, according to the Pan Arab Research Group (PARC).

The insurance and real estate industry comprised 33% of total ad spend in the period, while UAE advertisers spent approximately 65% of their budgets advertising in newspapers.

By November 2008, only developer Nakheel remained on PARC's top-12 list of newspaper advertisers, despite the company cutting down its monthly ad spend by US$300,000. "We certainly handled and continue to handle real estate assignments and that has been impacted," says Dimashqi.

Determining the full impact of the crisis on Leo Burnett's operations in the region has not yet been possible, according to Dimachkie, as "client plans are unfolding by the week".

"We are not immune to what's happening in the market. We are going to be affected. Some of the clients that we deal with in the sectors that have been most affected are experiencing a slowdown, most notably in real estate," he says.

Nevertheless, the company is "working on a number of upstream business opportunities" that are expected to be finalised within the forthcoming weeks.

Dimachkie expects those new ventures to compensate for the drop in other sectors. Abu Dhabi and Qatar represent two areas of interest for the company, he says.

Other global agencies are still bullish on the region's prospects. The head of Saatchi & Saatchi, Kevin Roberts, expressed high hopes for the GCC market, despite the drop in advertising spend across sectors. Roberts is looking to the Gulf to drive revenues for the firm and its parent company Publicis SA.

He believes the crisis will result in positive changes across the industry. "In the next three years crisis begets opportunity - and this is an opportunity now for Dubai in particular to lead the way," he says.

Roberts also highlighted the significant opportunity in online media. As advertising budgets shrink globally in the wake of economic uncertainty, some companies will look at new options, while others will stick to conventional advertising media, says Roberts.

Print | Email | Discuss this article

| Share |

READERS' COMMENTS

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic. Arabian Business would like to point out that only comments relevant to the story will be published. Any containing personal insults or inappropriate language will not be approved.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Enter the words above *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM