REGIONAL AD SPEND 2006

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42/Communicate/February 2007 ADVERTISING REGIONAL AD SPEND 2006 P an-Arab Research Centre 9s ad- spend figures reflect the rate card value of media monitored by the market research company. As such, the figures have to be taken with a huge portion of salt. Critics will say the numbers are grossly inaccurate, which is not actually the case: With a reasonable degree of precision, they reflect the stated value of mar- keters 9above-the-line advertising.

It 9s more accurate to call PARC 9s estimates cmonitored value d than cad spend. d (Outdoor advertising spend is one major exception, since it is impossible to monitor every outdoor site, and many companies don 9t report their revenue to PARC.) The problem lies not with PARC 9s methodology but with the rate cards themselves, which are often a fiction put forward by media owners who don 9t adhere to trans- parent pricing schemes. This is especially true in the case of televi- sion, where under-the-table dis- counts give buyers actual prices that are often a fraction of the ones listed on the rate card. So the best way to make sense of the data is to analyze it alongside estimates of actual spending in the region.

Elie Khouri, ... more. less.

regional managing director of OMD, the region 9s lead- ing media buying unit, pegs 2006 regional ad spend at between $2.3 billion and $2.5 billion, up 15 per- cent from 2005. His figure is in accordance with that given by media sales giant Choueiri Group of slightly over $2 billion for 2005. Both are a far cry from the $6.62 billion reported by PARC for 2006. Spending on television is partic- ularly overstated by the PARC data, according to OMD. Print is the dominant medium in the region with an estimated 55 percent share of actual spending, compared to television 9s 20 percent. cAnd that 9s being optimistic, d says Khouri. Given this, one might ask why Communicate even bothers printing the PARC figures. Although the absolute numbers are misleading, the figures do give a reckoning 3 one that 9s as good as you 9re likely to find anywhere else 3 of the rela- tive importance of markets, sectors and brands. Moreover, as champi- ons of transparency, we 9d like to shine a bright light on the difference between cofficial d figures and cunofficial d industry estimates. Call us lunatics, but we look forward to the death of the regional media-buy- ing industry 9s culture of discounts 3 and to the day when media rate cards reflect actual market value. MEDIA SPLIT MARKET BY MARKET TELEVISION Monitored value: $2.841 billion YoY growth: 25% Top brand: Dove ($42.5 million). No. 1 media in: Pan-Arab ($2 bil- lion), Lebanon ($102 million). 44% NEWSPAPERS Monitored value: $2.792 billion YoY growth: 23% Top brand: Chevrolet ($19.4 million). No. 1 media in: UAE ($701 million), Saudi Arabia ($751 million), Egypt ($405 million), Kuwait ($355 million), Qatar ($218 million), Oman ($118 mil- lion), Jordan ($84 million), Bahrain ($67 million). 42% OUTDOOR Monitored value: $205 million YoY growth: 18% Top brand: Al Marai ($7.1 million) 3% RADIO Monitored value: $143 million YoY growth: 40% Top brand: Vodafone ($42 million) 2% MAGAZINES Monitored value: $629 million YoY growth: 12% Top brand: Nokia ($4.8 million) 9% 1. Pan-Arab media 2,316 +24 7 * 2. UAE 1,062 +22 408 3. Saudi Arabia 978 +7 36 4. Egypt 819 +52 10 5. Kuwait 494 +13 204 6. Qatar 237 +101 268 7. Lebanon 231 -14 60 8. Oman 139 +32 45 9. Jordan 112 +4 19 10. Bahrain 107 +4 153 * Based on the total population of the Arab world, roughly 320 million Market Value (millions US$) 2005/2006 change (%) Per capita (US$) Actual per capita spend is just $40 for the GCC, according to Choueiri Group. By comparison, the world 9s top five advertising markets average about $300 per capita. Making sense of PARC 9s end-of-year data February 2007/Communicate/43 ADVERTISING F or 2007, OMD 9s Khouri predicts growth will cool down to 10 percent due in part to a slowdown in real estate investment and a dip in the price of oil. But in televi- sion, he expects prices of air time 3 actual prices, as opposed to those listed on the rate cards 3 to rise dramatically as media owners try to recoup the previous years 9 investments. Expect inflation of 15 to 25 percent in television, he says. As the chart to the right shows, one finds a greater reliance on tel- evision among the top 20 brands than in the advertising sector as a whole. This is a trend that holds true even while taking into account stations 9 steep discounts, says Khouri. Although PARC 9s data shows television with 70 percent of monitored value as opposed to print 9s 20 percent for the top 20 brands, in terms of actual spend Khouri says print and television probably have a roughly equal share of the top 20 brands 9market- ing budgets. MAJOR BUYERS TILT TOWARD TELEVISION TOP 20 BRANDS SECTOR SPLIT 1 Mobily (Etisalat) 55.38 65.2 Television (54.6%) 2 Saudi Telecom 52.07 57.2 Television (63.7%) 3 Dove (Unilever) 45.39 39 Television (93.5%) 4 Pepsi 44.43 11.7 Television (81.0%) 5 Chevrolet (General Motors) 38.90 2.4 Newspaper (49.8%) 6 Toyota 36.85 1.2 Newspaper (45.1%) 7 Galaxy (Masterfoods) 36.38 49.5 Television (96.5%) 8 Coca-Cola 35.59 15 Television (88.5%) 9 Johnson & Johnson 33.11 212.1 Television (95.0%) 10 Iraq Hope & Peace 30.66 206.8 Television (100%) 11 Mobinil 30.66 53.1 Television (46.6%) 12 Vodafone 29.05 75 Television (58.3%) 13 Ford 28.42 -4 Television (68.2%) 14 National Commercial Bank 27.38 -21.4 Television (47.2%) 15 Nokia 27.03 -25.1 Television (49.1%) 16 Doha Asian Games 26.82 N/A Television (61.7%) 17 Watani 24.51 779.6 Television (95.0%) 18 Emaar 24.43 33.1 Newspaper (53.2%) 19 Lipton (Unilever) 23.92 -34.7 Television (94.2%) 20 Knorr (Unilever) 23.91 9.7 Television (99.8%) Based on rate card values and counting monitored media only In the booming real estate sector, the vast majority of ad spend goes to print. Brand Monitored value 2005/2006 No. 1 media (Owner) (millions US$) change (%) (share of total) INSURANCE, REAL ESTATE Monitored value: $374 million No. 1 media: Newspapers (77%) FINANCIAL SERVICES Monitored value: $388 million No. 1 media: Newspapers (62%) VEHICLES, ACCESSORIES Monitored value: $407 million No. 1 media: Newspapers (55%) 6% PUBLISHING, MEDIA Monitored value: $453 million No. 1 media: Television (44%) SHOPPING MALLS, RETAIL STORES Monitored value: $455 million No. 1 media: Newspapers (55%) 7% FOOD, BEVERAGES, TOBACCO Monitored value: $638 million No. 1 media: Television (82%) TOILETRIES, HYGIENE, HEALTH CARE PRODUCTS Monitored value: $688 million No. 1 media: Television (81%) 10% GOVERNMENT, ORGANIZATIONS Monitored value: $859 million No. 1 media: Newspapers (70%) 37% COMMUNICATIONS, PUBLIC UTILITIES Monitored value: $777 million No. 1 media: Television (71%) 12%

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