Report: Online ads revenues in the Middle East are minuscule
Less than a quarter of the viewers of general portal sites in the Arab World are females. The dearth of female viewers might be one reason why online advertising revenues remain dismal, according to the Arab Advisors Group.
Virtually all regional portals have been facing severe financial difficulties and quite a few have closed their doors, like Planetarabia. The strategically inclined portals have been trying to diversify revenues by developing new business models for additional revenue, such as Maktoob.com’s venture into the online e-commerce facilitation business through the Cash U card.
The online advertising market has shown that ad revenues alone are not enough to support the websites. The total online ads spending in the region ranges between eight and $10 million, according to a new report by Arab Advisors Group. The small market is concentrated in a few number of portals that still could not reach profitability. For example, reportedly, Arabia.com’s total revenues did not exceed $500,000 in 2003 while cumulative losses have exceeded the $22 million mark. The portal, which has a big share of the online spending, remains cash flow negative since its inception.
“Unlike online ads, Satellite TV advertisements have exceeded $250 million in 2003. This is due to the fact that the satellite audience is greater than Internet users. Equally important, Satellite TV ads mainly target the female audience who represent a bigger share of the audience for TV than the audience for Internet portals: Our research shows that the online audience is overwhelmingly male.” Arab Advisors media analysts, Abed Pharaon and Judeh Siwady wrote in the report.
“The average share of female Internet browsers is around 19 percent, while the percentage of male viewers is around 81 percent. Evidently, these figures indicate a strong gender gap in Internet usage in the Arab World between females and males,” they added. — (menareport.com)
© 2004 Mena Report (www.menareport.com)