gcc online advertising market 2016 - · pdf filegcc online advertising market 2016 ......

MARKET RESEARCH REPORT

GCC OnlineAdvertising Market

2016

Orient PlanetRESEARCH

www.opresearch.me

© 2016 Orient Planet Research, an Orient Planet venture. All Rights Reserved.

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GCC OnlineAdvertising Market 2016

Co

nte

nt Gulf Cooperation Council 2016 Online

Ad spending on the rise: Internet

considered premiere marketing tool

2016 Online Advertising: e Currentand Future Market Size of Online Adsin the Gulf Cooperation Council (GCC)

and Globally

GCC Online Advertising Market Size

and Growth

Regional OnlineAdvertising Platforms

P. 5

P. 7

P. 9

P. 11

www.opresearch.me © Orient Planet Research


Gulf Cooperation Council2016 Online Ad spendingon the rise:Internet considered premieremarketing tool

e online advertising sector in the Gulf Cooperation Council is displaying strong positive indicators. e internet, being a global communications medium, provides advertisers with the ideal platform to reach a wide range of prospective customers. Considered one of the most inexpensive marketing tools utilized today, online advertising has become a necessityfor many businesses. Globally, internet advertising expenditure grows at the fastest rate, beating traditional media such as television and print advertising. It is a multi-billion dollar industry covering many sectors and targeting diverse groups of people online.

A number of industries in the world today have realized the importance of having online presence. Various sectors within the business landscape have poured financial investments towards developing an e ective online strategy. It is not surprising that ffthese industries have tapped the advantages of advertising their products and services through this medium. According to our research, global ad spending is estimated at USD531 billion in 2015 and online ad spending constitutes 27 per cent of the total amount. Applying this in the Gulf Cooperation Council (USD 4.725 billion ad spending) would bring online spending to over USD 1.27 billion or 2.4 times the actual expenditure.

For the Gulf countries, it is predicted that online advertising expenditure will grow faster than the

world average in the next five years. According to forecasts, it will register a growth of 25 per cent in

2016. Growth can also be attributed to the increased internet penetration in the Arab world.

Arab Knowledge Economy Report indicates that the number of Internet users in the Arab region is expected to increase to about 197 million by 2017. Online advertisingtakes advantage of the growing users in the Middle East spending more time with their mobile devices than any other traditional media. e growth of social media and mobile technology use make mobile advertising an ideal marketing approach.

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e economic slowdown in the region brought by lower oil revenues also helps in the growth of

online advertising. Seen as a cheaper alternative, advertisers expect an increase in reach but

decrease in spending for their companies. As the marketing budget jumps from traditional

media to online space, the region will soon take a large share in the global advertising

spending. is presents a big opportunity for advertisers and companies to develop the industry

and produce more profit. Increase in revenues contributes to economic development and

creates countless opportunities for technological and creative innovations.

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2016 Online Advertising:The Current and Future Market Sizeof Online Ads in the Gulf CooperationCouncil (GCC) and Globally

Internet advertising expenditure continues to grow globally at the fastest rate of any medium, at a compound annual growth rate (CAGR) of 17.69 between 2010 and 2015.

GLOBAL INTERNET ADVERTISING SPEND VS. TOTAL ADVERTISING SPEND

2011 2012 2013 2014 2015E

GLOBAL AD SPEND (US$ BILLIONS) 466 484 503 510 531

GROWTH RATE 3.56% 3.86% 3.93% 1.39% 4.12%

INTERNET AD SPEND (US$ BILLIONS) 72.5 87.9 104.2 123 143.8

GROWTH RATE 13.81% 21.24% 18.54% 18.04% 16.91%

INTERNET'S SHARE OF TOTAL AD SPEND 15.56% 18.16% 20.72% 24.12% 27.08%

Source: ZenithOptimedia & Orient Planet Research

As shown in the table above, global ad spending is estimated at USD 531 billion in 2015 and

online ad spending constituted about 27 percent of the total. Applying this ratio to the Gulf

Cooperation Council (USD 4.725 billion ad spending in total) would bring online ad spending to

over USD 1.27 billion or 2.4 times the actual spending. In other words, online ad spending in

the GCC constitutes only 42 percent of what it should be, according to this ratio.

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GCC INTERNET ADVERTISING SPEND VS. TOTAL ADVERTISING SPEND

2011 2012 2013 2014 2015E

GCC AD SPEND (US$ MILLIONS) 4,500 4,800 5,100 4,800 4,725

GROWTH RATE 6.67% 6.25% -5.88% -1.56%

INTERNET AD SPEND (US$ MILLIONS) 150 210.5 289.5 394 537

GROWTH RATE 40.33% 37.53% 36.10% 36.29%

INTERNET'S SHARE OF TOTAL AD SPEND 3.33% 4.39% 5.68% 8.21% 11.37%

Source: Orient Planet Research

Nevertheless, the gap presented by this comparison bears good news for the future of online

advertising in the GCC, as it underlines the great value of the achievable potential, as well as

indicating that online ad spending is bound to approach global levels in the next few years.

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GCC Online AdvertisingMarket Size and Growth

Factors that have encouraged the growth of

Internet advertising in the GCC include the rise

in the number of Internet users, the inexpen-sive

nature of Internet advertising compared to

traditional media, and the possibility of target-ing

specific segments and gleaning the results of

advertising campaigns more precisely than

when utilizing traditional media. ese have played

important roles in the rise of Internet advertising

in the oil rich countries of the GCC. Moreover,

GCC countries also benefit greatly from the

presence of foreign corporations, who are well-

versed in the use of Internet advertising and

increasingly interested in utilizing it to target

audiences in the region. Impeding factors

include the lack of computer and Internet skills

among older generations, who still prefer

traditional advertising.

GCC INTERNET AD SPENDING 2014-2015 - MILLION US DOLLAR

UAE KSA KUWAIT OMAN QATAR BAHRAINTOTAL

2014GCC

142 134 56 10 40 12 394

2015 190 188 75 13 55 16 537

GROWTH 33.80% 40.30% 33.93% 30.00% 37.50% 33.33% 36.29%2015 TOTAL AD SPEND

1,580 1,300 735 275 750 85 4,725(US$ MILLIONS)INTERNET'S SHARE

12.03% 14.46% 10.20% 4.73% 7.33% 18.82% 11.37%OF TOTAL AD SPEND


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Internet advertising expenditure is forecasted to grow globally at a CAGR of 11.9 percent till 2020.

GLOBAL INTERNET AD SPENDING 2011-2020 - BILLION US DOLLAR

YEAR

RA

TE

SIZ

E

GR

OW

TH

MA

RK

ET

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

89.90 104.22 119.77 125.82 140.79 157.55 176.29 197.27 220.38 246.61

41.15% 15.93% 14.92% 5.05% 11.90% 11.90% 11.89% 11.90% 11.71% 11.90%

Source: www.marketsandmarkets.com & Orient Planet Research

Based on a study conducted by our research department, online advertising expenditure inthe GCC will grow faster than the world average in the next five years.It is forecast to register growth at 25 percent in 2016. In the successive years, the GCC Internet ads market is forecast to grow at 20 per cent, 18 per cent,15 per cent, and 12 per cent in 2017,2018, 2019 and 2020 respectively, to reach about USD 1.2 billion in 2020.

GCC INTERNET AD SPENDING 2011-2020 - MILLION US DOLLAR

YEAR

RA

TE

SIZ

E

GR

OW

TH

MA

RK

ET

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

150 210.5 289.5 394 537 671.25 805.5 950 1,093 1,224

42.12% 40.33% 37.53% 36.10% 36.29% 25.00% 20.00% 18.00% 15.00% 12.00%


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Regional OnlineAdvertising Platforms

ere are several regional online advertising networks such as www.dms-cg.com, http://dotmena.com, www.ikoo.com, www.hsoub.com and www.netad-vantage.net, but none of them are auction-based systems.

www.dms-cg.comDigital Media Services is headquartered in Dubai, with presences in key regional markets.

http://dotmena.comdotmena is headquartered in Dubai, with presences in key regional markets

www.ikoo.comikoo ads network is an integrated digital marketing solution. ikoo's head o ce is located in Dubai.ffi

www.hsoub.comHsoub maintains country headquarters in the UK and the United Arab Emirates.

www.netad-vantage.nete Net AD Network head o ce is located in Dubai. It has branches in Riyadh, ffi

Manama, Beirut, and Amman, Tunisia and Jordan.

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Market Share

e previously mentioned five regionalad networks in addition to the rest of the regionalInternetad networks are

estimated to makeaboutUSD 100 billionannually ofad impressions. is is equalto 100 million cost per mille (CPM).

www.opresearch.me

e 2014 estimated revenue forall regionalad networksfrom selling onlineads is US

D 50million, representing 10 percent of total ad revenuesgenerated fromthe Arabregion (USD 500 million in2014). Itis worth mentioning that part of this revenue goesto publishers.

Orient Planet

RESEARCH

P.O.Box : 500266, Dubai, UAE Tel : +971 4 4562888

Fax : +971 4 4549528Email: [email protected]

Website: www.orientplanet.com

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