Advertising: 2.0(08)

We cast an eye over the key trends destined to shape advertising in the UAE and beyond in 2008.

1) Recession? What recession?

The good news for the UAE’s advertising community is that the country should avoid the effects of the predicted economic recession in the US.

As ad execs on Madison Avenue brace themselves for shrinking ad budgets, caused by the slump in the US sub-prime market and the credit squeeze, their Dubai and Abu Dhabi counterparts should march on relatively unscathed.

The UAE, still classed as an emerging ad market compared to the US and other more saturated markets, looks set to continue to grow.

Indeed, the UAE’s ad sector – the fifth fastest-growing in the world – will see growth of 108.9% between 2006 and 2009, according to a recent report by ZenithOptimedia.

That’s compared to a growth of just 2.5% for 2008 in the US.

A Group M study, meanwhile, predicts growth of 13.1% for the ad sector in the Middle East and Africa in 2008 – one of the biggest increases in the world.

2) TV rules OK

For all the concern over fragmentation, proliferation and ad clutter, TV looks set to remain the dominant medium in the UAE.

The regional TV ad market is said to be worth $300m, and ad spend on the medium is set to increase by 19% across the Middle East in 2008 – higher than the 17.2% average for all media in the region.

Globally, TV’s share of ad spend will reach an all-time high of 38.2% in 2008, according to ZenithOptimedia.

GroupM futures director Adam Smith said TV will be the primary engine of global ad growth in 2008, accounting for 50% of all additional new investment.

The Olympic Games, US presidential elections and football’s European Championships will provide the medium with a significant boost worldwide.

2009 could well prove a trickier proposition for TV execs.

3) Online to break 10% barrier

According to eMarketer projections, internet advertising as a share of global ad spend will reach 7.4% this year, more than 10% by 2009, and at least 13.3% by the end of 2011.

Internet ad spending is expected to exceed 10% of global ad investment for the first time ever in 2008.

Search will comprise 65-70% measured online advertising in 2008, up from 50% in 2005.

The Middle East, where internet usage has rocketed by nearly 500% since 2000, is ripe for growth in the online ad market.

The proliferation of UGC and social media in the region is placing the consumer in the driving seat and taking control away from advertisers.

This will be a major 2008 trend, according to OMD Digital director Dimitri Metaxas.

He said: “Traditionally, we are taught to carefully control our clients’ brand perceptions via strict guidelines and adherence to clear brand positioning and communication, but the explosion in the internet is fast changing all that.

“Now consumers have about as much power to reach the masses and the tools to adapt the brands in the image they decide.”

4) Outdoor pursuits

Outdoor, arguably the UAE’s most cluttered ad sector, continues to boom despite spiraling costs.

Recent media reports claim rates have soared by 500% since 2003, with a further rise of 20% expected over the next two years (Emirates Business 24/7).

2008 is likely to produce more discussion among the UAE’s major players on ROI and the need for regulation, rate cards and a UAE outdoor advertising association.

Advertisers will increasingly turn to technology as a means of cutting through the clutter and connecting with consumers.

5) Interaction; not interruption

Spending on interactive marketing, including everything from email to mobile marketing, will more than triple over the next five years according to Forrester Research.

Group M says spending on marketing services, such as sponsorships and public relations, is growing at a faster rate than on traditional advertising.

As we revealed recently, product placement and branded content look set to flourish in the UAE, aided by a lack of restrictions and the growing popularity of reality TV shows.

All the talk at Dubai’s media and ad conferences in 2007 was of “ending the advertising of interruption” and “turning brands into an experience.”

The challenge for advertisers in 2008 is to put these words into action.

2007 in review

2007 gave the UAE’s ad industry plenty to think about.

Septmber’s survey by YouGovSiraj revealed the gap between what advertisers are trying to achieve and the actual impact of advertising.

55% of residents said advertising in the UAE is not original, while 71% believe only a small percentage (0-29%) of advertising is relevant to them.

68% said most adverts do not make them feel good about the brand.

Then came a global report by IBM, called “The End of Advertising as We Know it”, which predicted greater disruption for the ad industry in the next five years than in the previous 50.

But it is not all bad news. The UAE’s ad industry is booming and developing all the time.

The Middle East has the fastest-growing youth population in the world, with 62% of the population under the age of 35, meaning an abundance of young, high-spending consumers for advertisers to target.

The challenge facing the UAE’s advertisers in 2008 was summed up in a recent speech in Dubai by IAA chairman and world president Joseph Ghossoub.

He said: “In 2008 and beyond the winners will be those who can make sense of the clutter, who can find the best venue for their messages and their audiences, who can find the young people with money.”

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