Middle East Economic Slowdown To Boost Online Advertising

| Nov 19, 2008 | comment 6 Comments

The economic slowdown in the Middle East is expected to accelerate the growth of online advertising in the region, reported The National, as companies opt for less expensive web ads over pricey traditional media.

Advertising online costs fractions of what it costs to advertise via traditional media, and makes it easier to measure the impact of advertising campaigns. 

The market now accounts for up to 20 per cent of total ad spending in developed economies, and is the driver of virtually all growth in advertising spending.

On the other hand, spending on online advertising in the Middle East is estimated to be as low as US$50 million, translating into less than 1 per cent of total advertising spending, which is one of the main factors holding back the growth of startups and web businesses around the region.

Google, which has become a giant in the area of online advertising, and which has been pushing hard into the Arab market, say they are seeing faster growth in regional demand as advertisers look for ways to increase their reach while limiting their spending.
“In an economically cautious environment, people need to continue to grow their business, making people aware of their product while also cutting costs,” said Mohammed Gawdat, the managing director of Google for the Middle East and North Africa.

“Every technology adoption follows an ‘S’ curve: it starts slow, then grows exponentially, peaks and tails off,” he said. “The Middle East is definitely in the hockey-stick part of that curve right now. Our numbers show that it is growing at a tremendous pace.”

Mazen Halawi, the corporate sales manager of Ayna, an Arabic search engine, recently said that large corporate advertisers in the region planned to put a larger percentage of their advertising budget into online media next year, with some planning for almost 10 per cent of total ad spending to go to the internet, up from just 5 per cent last year.

Globally, total advertising spending is predicted to grow by approximately 5 per cent next year, driven almost entirely by the online market, which will grow by 15 to 20 per cent according to some estimates.

# Source: The National

  • http://houblog.net Houssein

    This is so true. Web marketing is starting to boom in the MENA region. 2009 could be the year…

    There is definitely a place here for a regional Arabic online ad network.

  • http://houblog.net Houssein

    This is so true. Web marketing is starting to boom in the MENA region. 2009 could be the year…

    There is definitely a place here for a regional Arabic online ad network.

  • http://blog.sweetestmemories.com Qwaider قويدر

    Quite frankly, I disagree with this conclusion. I think the freeze or reduction in advertizing is going to be universal and in all media outlets.
    To give you a small example. The ailing automotive industry in the US has extremely intensified its TV ads more than anywhere else over the past month or two. They’re literally taking out from their life line to advertize.

    The online advertizing market is growing naturally. With the economic nightmare upon us it is likely to “slow down”, but growth is still expected. While the more traditional media might see some growth specifically in these times

  • http://blog.sweetestmemories.com Qwaider قويدر

    Quite frankly, I disagree with this conclusion. I think the freeze or reduction in advertizing is going to be universal and in all media outlets.
    To give you a small example. The ailing automotive industry in the US has extremely intensified its TV ads more than anywhere else over the past month or two. They’re literally taking out from their life line to advertize.

    The online advertizing market is growing naturally. With the economic nightmare upon us it is likely to “slow down”, but growth is still expected. While the more traditional media might see some growth specifically in these times

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