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MARKET RESEARCH REPORT
GCC OnlineAdvertising Market
2016
Orient PlanetRESEARCH
www.opresearch.me
© 2016 Orient Planet Research, an Orient Planet venture. All Rights Reserved.
No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certainother non-commercial uses permitted by copyright law. For permission requests, write to the publisher, addressed “Attention: Permis-sions Coordinator,” at the address below.
Orient Planet research
P.O.Box : 500266, Dubai, UAETel : +971 4 4562888Fax : +971 4 4549528Email: [email protected]
GCC OnlineAdvertising Market 2016
MARKET RESEARCH REPORT
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
MARKET RESEARCH REPORT
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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Orient Planet
RESEARCH
www.opresearch.me © Orient Planet Research
MARKET RESEARCH REPORT
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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Orient Planet
RESEARCH
www.opresearch.me © Orient Planet Research
MARKET RESEARCH REPORT
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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Orient Planet
RESEARCH
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MARKET RESEARCH REPORT
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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Orient Planet
RESEARCH
www.opresearch.me © Orient Planet Research
MARKET RESEARCH REPORT
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
Source: Orient Planet Research
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Orient Planet
RESEARCH
www.opresearch.me © Orient Planet Research
MARKET RESEARCH REPORT
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%
Source: Orient Planet Research
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Orient PlanetRESEARCH
www.opresearch.me © Orient Planet Research
MARKET RESEARCH REPORT
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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Orient Planet
RESEARCH
www.opresearch.me © Orient Planet Research
MARKET RESEARCH REPORT
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.
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Orient PlanetRESEARCH
© Orient PlanetResearch
Orient Planet
RESEARCH
P.O.Box : 500266, Dubai, UAE Tel : +971 4 4562888
Fax : +971 4 4549528Email: [email protected]
Website: www.orientplanet.com