With the onset of financial and economic crisis in the later part of 2008, the media and advertising industry faced many challenges and recorded declining revenues. However, the GCC region was not as badly hurt by the economic downturn as the western economies, according to a research paper issued by Kuwait Financial Centre ( Markaz ).
Since the latter half of 2010, the media industry in the region started to show promising signs again. Presently, the companies in the region have begun to increase their media spending budget as economies seem to come out of its hiatus, says Markaz . In 2012, the advertising revenues in the GCC grew by 5 per cent Y-O-Y to reach $ 4.8 billion. The UAE and Saudi Arabia have the largest share of ad spending with 33 per cent and 30 per cent respectively; followed by Kuwait with 20 per cent share.
At the same time, the media industry landscape is also changing rapidly as a consequence of technological advancements and changing consumers' habits. The digital media is growing in influence and effectiveness. Presently, the digital media captures 18 per cent of global media share of ad spending, which is expected to grow to 20 per cent by 2014. However, in the GCC, print media is still going strong with 71 per cent share of overall ad-spending.
The digital media is still in its infancy in the region but growing at a brisk pace. Social networking and use of social media sites have been on the rise in the GCC. Of all the social media sites, Facebook has the highest penetration in the GCC (about 40 per cent in the UAE and 35 per cent in Kuwait), distantly followed by LinkedIn and Twitter. Kuwait has the highest Twitter penetration of 13 per cent in the Arab world, compared to 3 per cent each in Saudi Arabia, UAE and Qatar.
In the research note, Markaz analyses the GCC media industry dynamics, identifies its revenue components and ad-spending trends. The report also discusses the key drivers of demand, identifies emerging trends and characterises the challenges in the GCC media industry. Globally, the print media is struggling as a result of dwindling circulation figures — especially in American and European regions.
In 2011, the North America recorded 4.3 per cent decline in newspaper circulation and in Europe it declined by 3.4 per cent. On the contrary, in the Mena region the newspaper circulation clocked the highest worldwide growth rate of 4.8 per cent and it grew by 3.5 per cent in Asia. The changing media consumption habits of consumers are driving ad-spending away from traditional print and towards the digital platforms.
In the GCC, the print media is still considered more trustworthy and hence grew at a CAGR of about 3.5 per cent between 2007 and 2011. However, in the GCC, the readers' preferences are gradually shifting towards the digital media. The television market in the Middle East has undergone radical changes in the recent past.
Oman Daily Observer