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Dubai :The level of advertising spending in the UAE may be lower than the worldwide average, but the industry here remains a sort of paradox, experts say.
"Clearly, advertising is based on economies of scale. Advertising spend in the US leads the way, but if you reflect on the size of market by people alone, 250 million versus five million, it's easy to see why.
"We might see a massive increase in spend in advertising, but in global terms, it is a small market. Its neighbour Saudi Arabia, has as much as five times the population and a near equal ad spend, which is what makes the UAE a sort of paradox," said Concept chief executive officer Pierre Pereira.
Based on statistics from the Pan Arab Research Centre, the UAE's advertising spend expanded from just $869 million in 2005 to $1.3 billion last year, the highest in the Middle East.
However, some say the amount is still small compared to the global average.
Nassim Ghrayeb, chief executive officer of YouGovSiraj, said the calculation that some people make to arrive at this conclusion of dividing total spend by population is rather simplistic.
"It also does not take into account the 'effective' population, for example, the one with real disposable income that advertisers are trying to reach and which is significantly narrower than the total population figures," Ghrayeb said.
"When we look at UAE advertising spend, we should not look at only the country's 4.4 million population. Most of our messages are also targeted at the vast number of visitors to the UAE," added Satish Mayya, senior vice-president and chief operating officer of Bates PanGulf Media.
Analysts have predicted that the UAE's advertising expenditure will shoot up to $2.4 billion next year. The UAE's top spenders are popular brands in real estate, telecommunications, jewellery, airline and food industries.
About 64 per cent of spending in the UAE last year went to Arabic and English newspapers.
Television bagged 16 per cent, while magazines ate up about 13 per cent. Another two per cent went to radio adverts, five per cent to outdoor ads and one per cent to cinema commercials.
Al Khaleejiah Advertising and Public Relations managing director Bander Asiri said that as the Middle East market becomes tech-savvy, online advertising will attract increasing ad revenues , but the role of traditional news outlets remains very much intact.
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