Both PARC and Ipsos agree that there has been a significant drop in UAE advertising expenditures for the 2nd quarter of 2009, compared to the same period in 2008. A report in Khaleej Times quotes Ipsos who have announced a 39 per cent drop, while The National quotes PARC who have announced a 26% drop.

 

According to the data collated by Ipsos, money spent on advertising in the Emirates, excluding spending on outdoor campaigns, declined by 39 per cent in the second quarter compared to the same period in 2008.

 

However, the pace of decline might have slowed down as total ad spend during the April-June period fell by just 3 per cent to about $354 million, compared with the $363.7 million spent in the first three months. Ipsos had started monitoring outdoor ad spending only since June last year.

 

Print media -- newspapers and magazines -- appeared to be the hardest hit due to the virtual absence of ad flow from real estate developers. Ipsos data showed that newspaper ad spend had fallen by 50 per cent in the second quarter compared to the same period in 2008. The money spent on advertising in magazines dropped by 10 per cent during the same period.

 

"The most affected are the newspapers," said Elie Auon, chief operating officer of Ipsos. "The main reason is the real estate sector." 

 

Outdoor advertising too has been severely affected by the lack of real estate advertisements.

 

Advertising spend in newspaper dropped by more than $330 million in the first six months of 2009 to $480 million, while magazines saw a drop of 3.5 per cent from $140 million to $135 million.

 

Historically, newspapers have dominated the market, followed by outdoor and magazines. However, the downturn appeared to have helped the local radio and television stations as advertisers hunted down cheaper avenues to maintain their brand visibility. The measured ad spending on radio increased by 23 per cent to $61 million in the first half of this year, and local television increased by 41 per cent to $31 million.

 

"Some advertisers are trying to maintain a presence using cheaper options," said Jaikumar Menon, vice-president of MCN Media, another media buying and planning firm. "Radio is a well-placed beneficiary. A lot of tactical promotions (given the current economic climate) should also benefit radio," he said.

 

Ipsos does not monitor online ad spending even though anecdotal evidences suggest a small but growing market. "Some of the spending might have shifted to online media but we don't have exact figures," Auon said.

 

According to Pan Arab Research Center (PARC), spending last month was US$116 million (Dh426m), down $2m from May.

 

"The decrease is mainly because the first half of the year in 2008 was a peak time for advertising," said Elie Jichi, a production manager at PARC. "There were so many spots, especially in the property sector.

 

"That's why whatever you have in advertising this year, I don't think it will cover the huge advertising that happened in 2008 from the property sector."

 

The property and financial advertising sectors were particularly badly hit, falling 75 per cent and 43 per cent respectively, during the first half of this year compared with the first two quarters of last year.

 

But weak advertising spending has spread to the household appliances, clothing and jewellery, business equipment, toiletries, cars and government advertising.

 

Worst hit were English-language newspapers, which saw a 39 per cent drop in advertising, compared with a 27 per cent fall in Arabic-language newspapers.

 

Newspapers were especially hurt after advertising in supplements, a favourite of property companies, dropped 84 per cent in the first half of the year, compared with the same period last year. Magazines lost 7 per cent of advertising spending in the same period.

 

Last quarter, the UAE stood out as the Middle East country worst hit by the advertising downturn, with only Egypt and Bahrain also experiencing drops.

 

But the second-quarter results show the pain seems to be spreading, with Saudi Arabia seeing a 5 per cent fall and Oman a 2 per cent drop in the first half of the year, compared with the same period last year.