Kuwait Financial Centre (Markaz) recently published the executive summary of their GCC Media report. In this research note, Markaz analyses the GCC media industry dynamics, identifies its revenue components and ad-spending trends.
The report also discusses the key drivers of demand, identifies emerging trends and characterizes the challenges in the GCC media industry.
With the onset of financial and economic crisis in the later part of 2008, the media and advertising industry faced many challenges and recorded declining revenues.
However, the GCC region was not as badly hurt by the economic downturn as the western economies.
Since the latter half of 2010, the media industry in the region started to show promising signs again.
Presently, the companies in the region have begun to increase their media spending budget as economies seem to come out of its hiatus.
In 2012, the advertising revenues in the GCC grew by 5% Y-O-Y to reach $4.8bn. The UAE and Saudi Arabia have the largest share of ad spending with 33% and 30% respectively; followed by Kuwait with 20% share.
At the same time, the media industry landscape is also changing rapidly as a consequence of technological advancements and changing consumers' habits.
The digital media is growing in influence and effectiveness. Presently, the digital media captures 18% of global media share of ad spending, which is expected to grow to 20% by 2014.
However, in the GCC, print media is still going strong with 71% share of overall ad-spending. The digital media is still in its infancy in the region but growing at a brisk pace. Social networking and use of social media sites have been on the rise in the GCC.
Of all the social media sites, Facebook has the highest penetration in the GCC (about 40% in the UAE and 35% in Kuwait), distantly followed by LinkedIn and Twitter. Kuwait has the highest Twitter penetration of 13% in the Arab world, compared to 3% each in Saudi Arabia, UAE and Qatar.
Globally, the print media is struggling as a result of dwindling circulation figures - especially in American and European regions.
In 2011, the N. America recorded 4.3% decline in newspaper circulation and in Europe it declined by 3.4%. On the contrary, in the MENA region the newspaper circulation clocked the highest worldwide growth rate of 4.8% and it grew by 3.5% in Asia.
The changing media consumption habits of consumers are driving ad-spending away from traditional print and towards the digital platforms. In the GCC, the print media is still considered more trustworthy and hence grew at a CAGR of about 3.5% between 2007 and 2011.
However, in the GCC, the readers' preferences are gradually shifting towards the digital media.
The television market in the Middle East has undergone radical changes in the recent past. The free-to-air market continues to be a dominant segment in the region.
The ad-revenues from Television media stood at $693m accounting for 14% of total ad-revenues in 2012 in the GCC.
The media industry in the GCC has brighter prospects because of improving literacy rates, favorable young demographics, higher income levels and technological advancements.