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Skewed Arab online ad spending

According to a ‘Arab online advertising’ report from the Jordan-based Arab Advisors Group, less than 25% of internet portal users are women and the total regional online ad spending pegged at a dismally low US$8million compared to global estimates of US$33 billion.

According to a new reported titled ‘Arab online advertising’ from the Jordan-based Arab Advisors Group less than a 25% of the viewers of internet portals in the region are females with the total Middle East online ad spending estimated between US$8-10million.

“Unlike online ads, satellite TV advertisements have exceeded US$250million in 2003. This is due to the fact that the satellite audience is greater than Internet users. Equally important, satellite TV ads mainly target the female audience who represent a bigger share than the audience for internet portals. Our research shows that the online audience is overwhelmingly male,” say Abed Pharaon and Judeh Siwady, Arab Advisors media analysts who co-authored the report.

According to Arab Advisors, virtually all-regional portals have been facing severe financial difficulties and quite a few have closed their doors (like Planetarabia.com). The strategically inclined portals have been trying to diversify revenues by developing new business models for additional revenue, such as Maktoob.com’s venture into the online e-commerce through the Cash-U card. The online advertising market has shown that ad revenues alone are not enough to support the websites.

The total online ads spending in the region ranges between US$ 8 and 10million. The small market is concentrated in a few number of portals that still could not reach profitability: For example, reportedly, Arabia.com's total revenues did not exceed US$500,000 in 2003 while cumulative losses have exceeded the US$22 million mark. The portal, which has a big share of the online spending, remains cash flow negative since its inception.

The new report cites that the dearth of female viewers might be one reason why online advertising revenues remain dismal. In a similar research by Forrester Group estimated
that global spending for online advertising will reach US$33 billion by 2004, one-third of (US $10.8 billion) which will be spent outside the U.S, capturing 33% of global spending

“The average share of female Internet browsers is around 19%, while the percentage of male viewers is around 81%. Evidently, these figures indicate a strong gender gap in Internet usage in the Arab World between females and males,” add Pharaon and Siwady.

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