Tuning into TV pulling power

The numbers may not add up yet, but television offers advertisers unrivalled reach in the Middle East, says Tim Burrowes

  • E-Mail
By  Tim Burrowes Published  July 10, 2005

Tuning into TV pulling power|~|Satellite-Dishes200.jpg|~|Turn on ... The television market is dominated by digital broadcast from satellite rather than terrestrial analogue|~|The thing about TV is that the numbers involved are so huge they can be a little hard to take in. Take last week’s Live 8 concert, relayed across the Middle East by MBC. The worldwide audience was estimated at more than three billion people — easily the biggest broadcast of all time. In the Middle East alone, MBC4 was confidently expecting its biggest ever audience — with well in excess of 30 million, possibly 40 million, tuning in. And this is where the numbers game starts to become relevant to advertisers — even against an estimated Middle East population of 69 million people, that’s serious reach. And this is why, despite worries about fragmentation, the death of the 30-second ad spot and quality of programming, the television market is still the biggest advertising game in town. Realistic numbers of how much the market is truly worth are hard to come by — the lack of transparency in the market means that much of the expenditure is simply guessed at. But the latest available data from the World Advertising Research Centre, for instance, suggests that in the bigger markets TV has a huge slice. In Saudi Arabia, it swallows an estimated 66.8% of advertising revenue — a massive proportion based on agency wisdom that female consumers will interact with no other medium between viewing and point of purchase. The estimated 20.8% slice taken by newspapers and 2.3% for the Kingdom’s outdoor market seems pretty small in comparison. The actual numbers, expressed in dollars rather than percentages are decent too. According to WARC, Saudi Arabian TV, for instance, pulled in US$1.3 billion in 2003. This is a figure that appears to have grown since. But the numbers do come with a massive health warning about their accuracy. For instance, estimates from Ipsos-Stat tend to come in dramatically lower than the WARC numbers. And we’ll get back to the numbers, or the lack of them, in a moment. TV plays a debateable role in the marketing mix in the region. With the odd exception for the likes of Live 8 or Who Wants To Be A Millionaire, there is no one channel or programme able to deliver a mass audience on its own. Unusually, this is a market dominated by digital broadcast from satellite rather than terrestrial analogue. Other than just a handful of major cities in the Middle East, where aerials do feature on the skyline, this is a dish culture. With viewers often having a choice of more than 100 channels, even dominant players like MBC can only claim around a 25% share of the audience. This limits TV’s ability to claim true advertiser reach. Instead, viewers tend to chase their favourite programmes with little station loyalty — and this has a major impact on planning, says Sridhar Alladi, strategic planning director for OMD in Dubai. “We are now looking at programmes as opposed to purely channels, since programme affinity enhances the effectiveness of the campaign. The choice of pan-Arab versus local stations will be driven by how well they score against the target audience,” he says. And Michel Costandi, business development director at MBC, argues that what the Middle East television market offers is not fragmentation, but specialisation — in other words, the ability for advertisers to easily segment and target audiences. MBC’s stable includes the flagship family station, movie channel MBC2, ‘junior’ station MBC3, and MBC4 for the more liberal audience wanting a window on the world with the likes of Oprah. The portfolio also includes Arabic news station Al Arabiya, which was launched in opposition to the respected Arabic news channel Aljazeera. Costandi says: “The Middle East is a satellite market, not a terrestrial market. That’s brought about a very definite segmentation. We have more than 100 satellite stations that the viewer is exposed to. What is happening is segmentation, not fragmentation. The top 20 satellite stations capture 80% of viewers and they are all specialised stations.” So does this mean we will see MBC launching more channels? Perhaps, says Costandi. “We continually track the market and we definitely will come to a decision about whether there’s a need.” The specialisation argument is also supported by Chris McDonald, CEO of Ten Sports, which is aimed at South Asians. He says: “You have your MBCs or your LBCs and these guys are reaching a wide audience. Then you have channels like ours which are very efficient at reaching a certain group.” The current lack of transparency also extends to audience figures. At present, there is no meter-based information about programme viewing. Instead, sample audiences are monitored by telephone interview on varying frequencies depending on the country. It offers planners only limited understanding of their plan’s performance. OMD’s Alladi says: “The lack of people meter-type data makes it difficult to accurately measure the value of a campaign. We can arrive at some approximation with the data we have but, in an ideal world, we’d be able to go much further and deeper.” However, the time is coming. Costandi adds: “In the near future it will happen in the Middle East, I’m sure.” A further area where robust figures are lacking is in information on ad spend. Research companies tend to rely on declarations from media owners rather than actual media monitoring to calculate how much revenue is coming through. But taking WARC’s data as the best estimate available, it offers helpful snapshots of the relative TV market across the Middle East. Lebanon, although a smaller market, sees just as much TV dominance, with it taking 67.4% of advertising revenue, or US$313 million. By contrast, the UAE, with an overall advertising revenue that is fast catching KSA, lags far further behind for TV. The booming newspaper market means that TV takes just an estimated ||**||Tuning into TV pulling power|~|Alladi,-Sridha200.jpg|~|‘The choice of pan-Arab versus local stations will be driven by how well they score against the target audience’ Sridhar Alladi strategic planning director, OMD|~|11% share, while newspapers take 63% and magazines 14%. Another problem in calculating these figures accurately is that the country-by-country allocation of ad revenue for the likes of MBC, with its pan-Arab reach, could be somewhat arbitrary. Across the rest of the region, TV’s dominance is strongest in Syria, taking up a massive 74.4% of the estimated market. However, that is against a backdrop of an advertising market estimated at only US$4 million. Next strongest is Oman (29.3%), Bahrain (20.2%), Jordan (12.7%), Qatar (10.8%) and Kuwait (2%). So why do advertisers bet so much of their budgets on television? For one thing, it’s cheap. The cost per thousand of reaching consumers is significantly less than most of the rest of the world. And, for the most part, it works. That’s why advertisers keep going back. Then there are a few reassuring facts. For instance, in KSA, the penetration of television is estimated at 100% of households. Compare that to the fact that less than half of those same households have a microwave oven, and suddenly TV seems like a good bet. Indeed, the total reach for the adult population of the country is an impressive 95%, with locally originated programming reaching 48% of adults and foreign originated material — predominantly the likes of MBC, LBC, Future and Aljazeera, getting to 76%. Much of the advertising comes from international brands — Tide, Pampers, Pantene, Ariel, Lipton Tea, Head & Shoulders and Sunsilk all make it into the top ten biggest spenders for KSA. This contrasts wildly with the next biggest advertising market, the UAE. While TV penetration is high, with 98.7% of households calculated to have access to television, the biggest advertisers are quite different in that they tend to be from closer to home. Dubai Land, Dubai Shopping Festival, Dubai Media City and Emirates dominate the top advertisers list, with the lion’s share of their spend going on TV. You need to look to 14th place for the first big international brand that spends a large proportion of its budget on TV in the UAE. That’s Nissan, spending an estimated 15.7% on the medium. Despite that, TV does have an important role, says Nokia senior marketing manager Zsolt Menesi. Putting his brand’s spend at roughly 20 to 30% of budget, he says: “TV is one of the main ways of getting reach. In many parts of the region, newspapers have big limitations with both reach and frequency. In Nokia’s case we have a product you cannot really take on to the radio so we do most with newspapers, where you can also communicate in the local languages, but we do use the free-to-air pan Arabic channels as well.” TV also has a unique power to galvanise consumers. The best recent example is the Lebanese Broadcasting Corporation’s Star Academy earlier this year. Broadcast across the region, the reality TV show saw men take to the streets of Saudi Arabia in celebration at having a homegrown winner. The programme sponsorship provided a fantastic opportunity for Pepsi. Little wonder the soft drink producer has already committed to the second series. Indeed, sponsorship offers TV stations an alternative revenue stream. CNBC Arabia’s Mohammed Moumenine, VP for programming and news, says it offers a decent option for clients who do not have the budget for glossy 30-second spots. He says: “Lots of big companies do not even have an ad but they want a presence on television. They used to feel their medium was print, but now that attitude is changing.” The financial news channel claims to be winning the battle for off-peak viewers by offering a mixture of hard financial information and more magazine-based programming in the evening. Moumenine says: “Stock markets are booming, oil prices are going up, and there are so many IPOs [stock launches] so everyone is a potential viewer. If they want local financial content there is no other channel. Our production is in the region of 95% in-house and we have offices across the whole of the Middle East.” But like many stations, he believes advertisers are not giving the station enough of the action. “We are not getting what we deserve. If you go to the agencies they think it is a niche station. They need to do their homework properly. It’s not yet what we hope for and expect but it will come if we keep providing the best shows and best programming.” TV is also facing external threats. OMD’s Alladi says: “It is also worth remembering that certain target groups are spending more time with new media such as the internet. For example, the youth in the West spend more time gaming and surfing as opposed to watching TV. At the same time, the ad-weary are also becoming adept at avoiding ads, whether by zapping with a digital video recorder, watching video-on-demand or subscribing to advert-free satellite.” Costandi says he does not buy the idea that DVRs will kill TV. “People predicted the death of radio, then people predicted the death of cinema. It’s our job to be aware of trends and make sure we deliver to viewers what is required.” But Alladi warns: “Things are changing in TV advertising for one simple reason: the typical client brief of we have got a 30-second ad, so give us a plan with the lowest CPP no longer works. “Everything must start instead with the goals. We need to first understand the consumer, keeping the marketing objectives in perspective. We must know who they are, how they live, the role the brand plays in their lives, the role of media in their lives.” And he warns that the quality of much of the output is poor: “The Middle East TV scene presents specific challenges, such as lacklustre programming grids. The lack of engaging programme content leads to reduced programme loyalty. How many programmes currently on air can you name? I would be surprised if you could name more than five.” A related issue is the Catch 22 problem of the current cost of advertising on TV — it’s too cheap. Advertisers get their TV at a very competitive price, but they also know that the level of investment from media owners is lower as a result. Costandi says: “This is the main challenge. The demands and ambitions of the stations and advertisers are higher than the commercial revenue. But the advertisers do understand we need to have commercial viability. I would not label it as media inflation — I would label it as a proper investment.” However, he is optimistic: “The response of advertisers has been very positive in understanding the need for investment. Right now, this is a dynamic, exciting industry.”||**||

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code