Money spent on advertising is projected to dip lower over the next two years as weak oil prices weigh in on consumer spending.
Regional advertising agencies are expected to miss out on a recovery in spending this year as a weak oil price weighs on consumer spending.
Zenith, the media services network owned by Publicis Media, said it reduced its Mena spending by 6.3 per cent from June, adding that there will be an 11.8 per cent fall this year in overall advertising spending.
Money spent on advertising is projected to dip over the next two years, averaging about a 7.8 per cent decline annually with regional political instability also acting as a drag on the market. The IMF expects the weak oil price to hit government spending with the UAE economy expected to grow by 2.3 per cent this year, down from the 4 per cent growth last year.
As businesses cut costs, consumers are also spending less.
The slowdown in the regional advertising industry was expected by some agencies. Elie Khouri, the regional chief executive of Omnicom Media Group, told The National in December that he expected advertising spending to decline by up to 20 per cent over this year and next.
The advertising market for Mena is worth about US$5.5 billion in net revenue, according to a report from Northwestern University in Qatar. The industry has had a compound annual growth rate of 2 per cent over the past five years, representing only a mild growth... Read more...