Advertising is supposed to reflect the mood of the times. In the Arab world the industry is deeply divided over its prospects.
Regional industry executives may be on trend when it comes to selling Snickers bars or shampoo but they have failed to reach a consensus on whether their business has recovered from the downturn and Arab Spring.
No one can dispute that spending was hit hard by the regional unrest and financial crisis.
According to the Arab Media Outlook, published by Dubai Press Club and Deloitte, there was a 10 per cent decline in advertising spending last year, led by falls in Egypt.
But estimates of the future annual growth in the industry range from 1 per cent to 7 per cent over the next few years. The Arab Media Outlook, says the regional market is currently worth US$4.9 billion (Dh17.9bn), a figure set to rise by an average of 6.7 per cent annually to hit $6bn in 2015.
Several senior industry figures, however, dispute such a rosy forecast.
Tarek Daouk, the chief innovation officer for the Middle East and North Africa (Mena) at Starcom MediaVest Group, based in Dubai, expects an increase of between 1 and 3 per cent over the next three years.
“A 6.7 per cent growth in advertising spend is definitely not possible,” he says.
“Where would that growth come from? Many of the big, key multinationals are under significant pressure globally. And this pressure is expected to continue in the next two to three years because there are no big signs of recovery in the global economy.”
Mr Daouk defines the mood of the Arab advertising industry as “challenging but not gloomy”.
The pressure is on the industry to offer new services, such as creating content for clients’ social media pages. “Suddenly a brand has hundreds of thousands of fans, friends and followers – and they need to speak to them,” he says.
Others share his cautious outlook.
Elie Haber, the UAE managing director of the media planning agency Mindshare, expects growth of “between 4 and 5 per cent” over the next few years.
But others are more upbeat.
Elie Khouri, the chief executive of Omnicom Media Groupfor the Mena region, detects a new optimism.
“An average of 5 to 7 per cent growth is pretty much in line with the market expectations. This year, it’s looking like we’re going to get a 10 per cent growth,” he says. “This region is regaining a lot of interest from multinationals. It’s looking like we have a re-energised excitement for this part of the world.”
Mohan Nambiar, the chief executive of the media planning agency MEC in the Middle East and North Africa, agrees there is a positive mood in the industry.
“There is a lot of organic growth that we see from the existing clients,” he says. “Retail is getting stronger, the financial sector is coming back.”
The Arab advertising industry could easily grow to $6bn by 2015, he adds. “I think that is easy to achieve.”
Despite the conflicting views, there is one area in which the industry does have consensus – the increasing importance of digital media.
Advertising on websites and mobile applications is set to grow to account for 10 per cent of the total market by 2015, when it is forecast to be worth almost $600 million, according to the Arab Media Outlook. It accounted for just 4 per cent of the market last year, the report found. Mr Nambiar says online advertising is “showing all the signs” of achieving this growth.
“Given the importance of digital media in this region, I think 10 per cent is not an alarming number,” he says of the Arab Media Outlook’s prediction. Online media now offers greater interaction with consumers, he adds.
“At the end of the day, it’s all about the active engagement.”
If the advertising industry has found the zeitgeist, it is in the brave new world of digital media.
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