Top adman says Afghan advertising revenue to rise at least 10% a year

Afghanistan is now home to more than 75 TV channels and 175 radio stations, report says.

Advertising revenues in Afghanistan are forecast to increase by between 10 and 12 per cent a year over the next three years, the country's most prominent media executive says.

Local advertising revenues last year are estimated at between US$50 million (Dh183.6m) and $100m, a tiny amount compared with most other markets. But ad spending is growing steadily, said Saad Mohseni, the chairman of Afghanistan's largest media company Moby Group.

"I think it will grow at, say, 10 or 12 per cent per annum," Mr Mohseni said. "So in two or three years, [if we] assume that it's at $100m now, it will be at the $120m to $130m mark."

However, he said, there may be a slight dip in revenues in 2014, when the US military is expected to withdraw from Afghanistan.

"I think there will be a period where it goes sideways or even lower as the Americans disengage, but if we have enough momentum in the economy then I think [the growth] will continue," Mr Mohseni said.

Moby Group, based in Kabul, operates Tolo TV and Lemar TV, which have a combined television audience share of 52 per cent. It is also behind TOLOnews, a 24-hour news channel, and the radio stations Arman FM and Arakozia FM.

The report "Afghan Media in 2010", which was produced by Altai Consulting for the US Agency for International Development, said there had been an average 20 per cent rise in the number of media outlets every year since 2006.

Afghanistan is now home to more than 75 TV channels and 175 radio stations, the report said.

Mr Mohseni said that "no one has a proper figure" for last year's total advertising revenues.

The Afghan Media in 2010 report said total annual media revenues amounted to between $77m and $96m. Of that, $50m was driven by commercial advertising revenues, with 19 per cent funded by the military, and the rest made up of private and public funding.

"The market remains rather unsophisticated and is further constrained by high illiteracy rates and strong adherence to tradition and religion, which prevent advertising companies from fully leveraging their production potential," the report found.

Afghanistan's broadcast media attracts about 80 per cent of the mainstream advertising revenues. The report said the total TV ad spending was $30m a year, with provincial channels making as little as $12,000 a month.

"With the exception of Tolo, which generates at least twice the revenues of other commercial channels, television channels based in Kabul can generate as much as $100,000 to $200,000 every month … provincial channels can reach $12,000 to $17,000 per month," the report said.

Mr Mohseni acknowledged the influence of the US government on the local advertising industry.

"The ad market is to an extent artificial because a lot of money is from the US government," he said.

But he said US-funded advertising and sponsorship of his programmes made up a tiny part of Moby Group's revenues.

"US government spending is mostly on recruitment efforts for the military and police, and we see that advertising," Mr Mohseni said. "But even beyond 2014 the Americans will spend big time on Afghan military and Afghan police, so we will not see a significant drop in advertising from that perspective.

"But they will probably stop a lot of their soft media campaigns, so I think it will impact us but I think by then we will have enough momentum to not worry too much about it."