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The great Middle East Ramadan advertising race: TV wins, digital kills print
Many argue the increase in entertainment offerings during Ramadan defeats the purpose of the holy month. But much like a global sporting event, it’s a big month for advertisers across the Middle East and North Africa. The score? TV is still on top, and digital is killing print.
As advertising expert and co-founder of Cairo-based The Brandberries, Hamza Sarawy, told Salaam Gateway: “Ramadan is the Middle East’s Super Bowl,” referring to the wildly popular championship game of the National Football League in the United States that attracts more than 100 million television viewers annually.
Demand for goods and services during the fasting month in the MENA region is estimated to be 20-30 percent higher compared to the rest of the year, Dany Azzi from FP7 Riyadh said at Creative Industry Summit’s last Ramadan Edition in Egypt in September last year.
This environment is a jackpot of opportunity for brands – and the figures back it up. Ramadan advertising accounts for up to 40 percent of total annual advertising investments in the region, according to Azzi, whose company is part of McCann Worldgroup, and operates in 15 MENA cities.
TV ON TOP
TV is the biggest medium, accounting for over 85 percent of ad sales. According to the 2016 Global Advertising Market report from advertising intelligence and strategy firm Magna, TV saw double-digit growth driven by high spend during Ramadan in 2016.
“It is a game of penetration. More consumers watch TV,” said Sara Metwally, general manager of media agency Starcom.
In Egypt, the most populous market in the MENA region, gross ad spend doubled from 11 million Egyptian pounds ($611,000) in 2014 to over 23 million Egyptian pounds ($1.27m) in 2016.
The MENA region’s largest private broadcasting company, MBC Group, said Ramadan alone brings in up to 18 percent of its annual revenues from advertisers.
“Of course, Ramadan is peak season for advertisers,” said Mazen Hayek, official spokesperson for MBC Group. “[A few years ago] it used to represent 20-25 percent of our revenue in a given year. It used to bear a big weight.
“But over time we’ve managed to reduce the impact of Ramadan on our yearly revenues, yet at the same time grow those revenues. We’ve managed to reach a healthy situation where Ramadan would constitute probably 15-18 percent of the year and then the rest of the year would cover the rest.”
MBC releases by far the highest number of original TV productions for the holy month. Its rival OSN, the direct-broadcast satellite company, is televising 27 shows for Ramadan this year, compared to just eight in 2012.
Ad spots on MBC’s channels are snapped up incredibly quickly.
“30 percent of our production investment happens during Ramadan,” Hayek said, adding that the ‘post-iftar spot’ of between 7-9pm Saudi Arabia time “is the most sought-after and most expensive” for advertisers.
“This is where the rush is,” said Hayek.
A 30-second ad spot between 7-9pm Saudi Arabia time – during the Saudi comedy ‘Selfie’, the societal reality show ‘Al Sadma’, or the celebrity prank programme ‘Ramez Taht El Ard’ – fetches $40,000. Between 11pm and midnight, the spot goes down to $27,000.
The cheapest 30-second slot – between 7-8am – is $4,000.
In terms of advertisers, prime time shows attract a variety of brands, while religious content tends to attract ads by charity organisations.
And viewers remain glued to their screens.
“The viewing impact, and the ratings, are high,” said Hayek. “[An estimated] 6-7 hours of viewing a day. We witness a huge increase in the total rating points of a channel and the rating points of top rated shows.”
TOO MANY ADS
The downside, however, of television shows becoming overcrowded with commercials is that many viewers tune out during ad breaks, said The Brandberries’ Sarawy.
“Before the clutter of drama and TV talk shows, people enjoyed ads, but the amount of dramas and TV shows skyrocketed, along with the ads.”
This resulted in many taking to social media last year to say they were mainly watching advertisements, and dramas in between, elaborating that a channel would air up to 20 minutes of advertisements, followed by five minutes of content.
Fed up, consumers began to find other things to do during those periods.
ONLINE: SOCIAL MEDIA
The rise of social media has created a bridge between traditional TV viewing and spending time online, particularly among the younger segment. Advertisers followed, and not without reason.
According to a Ramadan Insights report released by Facebook last month, 130 million people from MENA log onto Facebook Mobile every day. An estimated 86 percent of Facebook’s total users in the Middle East observe Ramadan.
During the holy month, users spend an extra 57.6 million hours on the platform, with 4.84 times more mobile conversations taking place.
On Twitter, activity increased by an average of 26.3 percent during Ramadan last year, with TV shows being one of the biggest topics of discussion.
“People tend to be more active on Twitter from iftar time until sunrise. Throughout the month, the volume of conversation increased steadily on a daily basis from the first day of Ramadan until Eid,” Benjamin Ampen, Twitter’s head of revenue Middle East and North Africa, told Salaam Gateway.
“In comparison to the year 2015, the overall conversations on Twitter related to Ramadan increased by 88 percent year-on-year, with the MENA region being home to more than 50 percent of the world’s Ramadan content,” Ampen added.
Overall usage and activities increased by 28 percent in Saudi Arabia, 27 percent in the UAE, and 24 percent in Egypt, said Ampen.
Campaigns held during the month also witness an increase in engagement. Beverage brand Vimto’s Twitter activation is highlighted as a successful one from last year.
“Vimto’s campaign using the hashtag خلنا_نجتمع# (Let’s get together) encouraged people to actively engage with the brand, and as a result delivered more than 40 million impressions and 3 million video views, reaching over 3 million people in the region,” said Ampen.
Advertising interest for online streaming channels is also on the rise.
Video-on-demand services such as Starz Play Arabia, ICFlix and iFlix – which host international and regional content – are increasing in popularity, and Netflix Middle East is even considering producing its own Arabic content.
MBC Group’s own portal, Shahid is also fast increasing its user base, said Hayek.
“There has been a 200 percent increase year-on-year during Ramadan, with a high viewership from the Gulf and Iraq. Advertisers are [also increasing their spend] on Shahid,” Hayek said.
The world’s biggest video sharing website, YouTube, also witnesses changing user behaviours during Ramadan, with notably significant increases in engagement, along with consumption of longer form content and higher video completion rates.
The average view duration during Ramadan last year increased by 11 percent, with searches for recipes spiking 50 percent over the annual average, according to a report by Think with Google.
YouTube cites last year’s Maggi Diaries, produced by owner Nestle, as an example of great content of a brand capitalising on an uptick in category-specific interest.
PLATFORM: MOBILE FIRST
With Facebook going as far as saying that Ramadan is a ‘mobile-first’ month for users, particularly those in the UAE, it’s little surprise that some advertising agencies are creating content for mobile before TV.
UAE has 78 percent smartphone penetration, placing the country in the top ranks globally, said a report by McKinsey & Company.
In Saudi Arabia, the Middle East’s largest economy, around 22 million of its 31 million population use a smart mobile device. This is equivalent to a penetration rate of 72.8 percent.
While the remainder of the Middle East is still playing catch-up with regards to smartphone use, it is predicted that by 2020, the region will reach 60 percent overall smartphone adoption, in line with the rest of the world.
The current trend is mostly “multi-screen planning” where TV is not sufficient by itself, said Riham El Sawy, managing director of Mindshare Cairo. Mindshare operates globally.
Starcom’s Metwally agreed, saying that “viewers want to watch content on their own schedules, with less advertising clutter, so there is a natural shift of viewers to second screens.”
DIGITAL: $1 BLN AND RISING
Increasing online activity in the MENA region—driven by social media, smartphone use, and streaming services—is pushing the growth in consumption of digital content.
“The rise of digital can't be called a trend anymore. It’s a reality,” said Metwally.
“As penetration increases, and advertising options become more readily available, it is only natural that more advertising investment will move to digital screens,” she said.
In recent years, some have gone a step further by separating the copy it creates for traditional media versus online. There are production agencies that have already launched departments for digital services. Omnicom Media Group, the holding company of OMD, PHD and M2M, being one of the most prominent.
Brands sometimes set a new trend. Last Ramadan, Coca-Cola ditched TV altogether, focusing on digital only. Experts hailed the move a success.
Taking note of digital is certainly a wise move, as the market could add $95 billion per year to the Middle East’s annual GDP by 2020.
Advertising revenues for the MENA region aren’t publicly disclosed by social media and other digital giants. On a global scale Google and Facebook attracted one-fifth of advertising spending in 2016, nearly double the figure compared to 2011.
Google brought in an estimated $79.4 billion in advertising revenues last year, three times more than Facebook, which made $26.9 billion.
Facebook’s managing director of MENA and Pakistan, Jonathan Labin estimated that overall spend on digital advertising in the region is now upwards of $1 billion per year.
In the battle of TV versus digital, print advertising is the victim, according to MBC’s Hayek. “Online advertising is growing in the region, but it’s not necessarily coming from TV. It’s coming from other media, mostly print.
“TV [advertising] has diminished this year due to cyclical wars and instability – [declining] TV revenues were linked to the market and not to the migration of advertising from TV to another platform,” added Hayek.
Hayek’s claim is backed up by research. According to a report by the media agency Zenith, advertising spend is shrinking at 4.9 percent a year in MENA amid conflict and low oil prices.
As for print advertising, it looks soon to be dead on arrival.
In a market update shared by Ramzi Raad, group chairman of the advertising company TBWA\RAAD Middle East, the total ad spend across UAE and pan-Arab media during the first nine months of 2016 dropped 1.05 percent from $8.04 billion to $7.96 billion, compared to the same period in 2015.
“Newspaper advertising suffered most as the drop between the same period of 2016 in comparison to the previous year amounted to $160.77 million, representing a 26.84 percent drop,” said Raad.
“Mostly print dropped across all media plans. Only a few sectors remain to spend on print, and for tactical reasons: real estate, banking and automotive,” said Mindshare’s El Sawy.
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