Region’s property boom helps fuel ad spend rise

The booming construction and property sector in the Middle East is responsible for a dramatic rise in UAE advertising expenditure, according to media agencies.

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By  Tim Addington Published  October 23, 2005

The booming construction and property sector in the Middle East is responsible for a dramatic rise in UAE advertising expenditure, according to media agencies. Newly released figures from Ipsos-Stat show that ad spend in the Emirates increased significantly in the first three quarters of 2005, up 35% from US$495 million to US$667 million . The UAE rise contributes to a pan-Arab jump, which has seen spending on advertising increase by 9% to US$2.5 billion in the first nine months of the year, compared to the same period last year. Television, newspapers and magazines are the main beneficiaries of the extra money being pumped in. Explaining the UAE increases, Samir Ayoub, CEO, Middle East and North Africa at Mindshare, said: “Property is obviously a key driver, but we have also noticed that increasing competition between banks selling products related to the property boom, such as loans and mortgages, is also on the up.” Ayoub said spending by property companies on outdoor was likely to drop in the future as developers move away from the brand-building message to focus more on selling. He also claimed that property companies would switch from general advertising to concentrate on targeting specific groups which would mean advertising mediums they use to reach customers would change. The agency head said: “I expect to see advertising spending to continue both in the UAE and the rest of the Middle East, providing economic conditions remain favourable.” Peter Smith, international director at Optimedia Middle East said the region’s overall prosperity and static growth in European and US markets meant more advertisers were looking to the Middle East to spend their ad budgets. He said: “The construction and property industry is fuelling the rise in ad spend in the UAE. Everywhere you look there are adverts for companies such as Emaar and Nakheel. But generally there is a lot on growth going on across the region, which is why we are seeing such a dramatic jump. “Compared to other parts of the world, this region offers a great opportunity for growth.” While ad spend in the UAE is buoyant, Saudi Arabia, with a population of 24 million — many of which have strong purchasing power — remains the focus for most advertisers in the region. Countries that were monitored as part of the Ipsos-Stat survey included Syria, Lebanon, Jordan and the six Gulf states. The figures compiled by the research are based on rate card and exclude the substantial discounts given to advertisers and media agencies.

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