Middle East TV Advertising potential to grow by more than USD 2 billion

The launch of reliable audience measurement systems will spark a boom in Middle East Media and impact the competitive landscape of regional media companies, according to A.T. Kearney

 Dubai (2 June 2010) —  The recent launch of the UAE's TV Audience Measurement Project (TAM), through the signing of a Memorandum of Understanding between key government and private players in the media community, is a significant step for the UAE TV and entertainment sector and the broader pan-Arab media industry. This move by the UAE will lead to increased transparency of viewing habits in the population, which will influence TV channels’ attractiveness to advertisers, according to A.T. Kearney, a world leading management consulting company.

Overall Pan-Arab advertising spend increased by approximately 20 percent annually from 2002 until 2009. Last year advertising spend declined by 14 percent, according to the Dubai Press Club. As the economic recovery progresses, 2010 has seen a growth in spend again, but to spark a boom in this sector A.T. Kearney highlights the need for transparency. This transparency will enable media companies to charge according to factual measures of viewership. A.T. Kearney research of international benchmarks and best practices in the media sector finds that if audience measurement is rolled out on a pan-Arab scale it represents a potential of additional TV advertisement revenue for media companies worth more than USD 2 billion.

According to A.T. Kearney, television is by far the most important advertisement channel in the Middle East (almost half of advertising revenues and 90 percent of pan-Arab campaigns), and therefore also the most important channel for pan Arab advertising revenue growth. However, the research highlights that absence of reliable TV audience measurement systems is a barrier to growth, and is a key reason why per-capita advertising spend in the Middle East is up to 30 times lower than in markets with such systems. The round-the-clock monitoring and measurement of TV viewing habits through people meters is going to prove invaluable to TV channels and advertisers alike.

“Robust audience measurement is important for the media sector as a whole. It will not only help advertisers and channels optimize value, but also attract investment from non-regional companies by improving transparency and reducing risks. Eventually audience measurement will drive significant changes in the media landscape and initiate a shake-out of winners and losers,” said Dr. Martin Fabel, newly joined Partner and senior media expert, A.T. Kearney Middle East.

TV audience measurement alongside other channel audience measurement is especially relevant in the GCC, where differences exist in the population in terms of nationality, lifestyle and consumer demand. Effective TV audience measurement will additionally allow the targeting of fast-growth demographic groups, such as the fast growing base of young and wealthy Arabs. A.T. Kearney’s regional media study highlights the rapidly growing appeal of the GCC media sector. Evidence of the regional commitment to the growing media sector is apparent in the number of new media cities being launched, as well as recent international partnerships within the media industry which were related to the Middle East such as Fox & Rotana and Yahoo & Maktoob.

“What we have seen in the UAE with the signing of a MoU to initiate TV audience measurement is just the beginning. We see a booming GCC media sector ahead for those who take steps to prepare for increased transparency by strategically managing their inventory, scoping their internal processes and engaging with advertiser based on objective measures. The Middle East media sector is a lucrative market for local and international media players and investors.” concluded Dr. Fabel.

About A.T. Kearney

A.T. Kearney is a global management consulting firm that uses strategic insight, tailored solutions and a collaborative working style to help clients achieve sustainable results. Since 1926, we have been trusted advisors on CEO-agenda issues to the world’s leading corporations across all major industries. A.T. Kearney’s offices are located in major business centers in 37 countries. From our fast growing Middle East offices in Abu Dhabi, Bahrain, Dubai and Riyadh, A.T. Kearney actively contributes to the operational excellence and profitable growth of the private sector industries and services in the region as well as the agility of governments. For more information, visit www.atkearney.com or follow A.T. Kearney Middle East on Twitter profile: AT_Kearney_ME.

About Our Expert

Dr. Martin Fabel 
Partner
Experienced in strategic developement especially in the media/telecommunication and consumer goods sectors. He is one of A.T. Kearney’s global experts around topics like convergence and cross-industry eBusiness and eCRM.