President of the International Advertising Association – Jordan Chapter (IAA Jordan) Sharif Abukhadra announced during a press meeting held at the IAA Jordan headquarters that the year 2005 registered a record high in advertising expenditure of $162 million in 2005, up from $121 million in 2004, registering a 34% growth.
“The IAA Jordan believes that the upsurge in advertising expenditure comes as a result of true liberalization in many local market sectors, leading to increased competition. Companies operating in these key sectors are continuing to invest in marketing communications and indeed consider it to be mandatory to achieve long term success,” Abukhadra added.
According to a study conducted by marketing research company IPSOS, advertising expenditure for the past five years shows a steady growth percentage of 15-30%.
Abukhadra went on to point out that print, especially daily newspapers, remained as the dominant medium in 2005 in terms of advertising expenditure, achieving the highest growth from $97.9 million in 2004 to $129.5 million in 2005, a 31% increase. Coming second, outdoor expenditure increased by 21%, rising from $10.8 million in 2004 to $13.2 million in 2005. Television rose by 39%, registering 11.1 million in 2005 compared to 8 million in the previous year. The highest increase was in radio as it witnessed 130% growth, achieving $8.2 million and coming in fourth place.
An overview of the past five years (2001 – 2005) shows a steady pattern with print leading the expenditure trend, followed by TV, Outdoor, Radio (which grew due to the entry of three new stations in 2005), and finally Cinema.
IAA Jordan President also explained that the growth spurt in TV spend, which rose by 39% compared to last year, was due to the implementation of new strategies by Jordan TV reflecting a tangible and positive result with an increase of viewership. He also expected TV expenditure to increase due to renewing and updating Jordan TV’s 1st channel, Movie Channel and the entry of a new TV station ATV.
The Telecommunications’ sector took the lead in advertising expenditure, reaching $25 million in 2005 and rising by 79% over the previous year’s $14 million. The entry of a new mobile operator stimulated an increase in competition and thus more advertising. The Banks’ sector spent $15.5 million, a 40% growth over the $11 million achieved in 2004. The Auto sector rose from $4 million in 2004 to $5 million in the following year. The same study showed that the sectors of the Soft Drinks and the Public Sector dropped down the league table being replaced by two new entries, Restaurants and Educational Institutes. The newcomers’ invested some $4.5 million and $4.2 million respectively in advertising. Over all, advertising expenditure for the top 5 categories in 2005 rose by 54% compared to 2004.
The same study showed that for the past five years, the Telecommunications’ sector was the number one spender, followed by the Banks’ sector.
Research also showed that ‘seasonality’ does affect advertising spend, varying throughout a calendar year. “Advertising Expenditure increase in specific months and decrease in others. Summer season - a period where schools and universities are closed - constitutes a valuable opportunity for companies’ promotional activities. Also, the holy month of Ramadan is a very important ‘event’ for businesses as people find themselves with more free time. However, January could be seen as a ‘slow’ month for advertising spend as executives work on their financial budgeting and planning for the forthcoming year.”
Looking ahead, IAA Jordan President anticipated steady growth for 2006 in the advertising expenditure, and continuous development in the local advertising and marketing communications’ industry, saying that companies now view their spending in those fields as an investment yielding positive results rather than an expense.
Following the highly commended First Annual Advertising and Communications Conference “Outside the Box”, held in February 2005 under the patronage of His Majesty King Abdullah II, Abukhadra confirmed that IAA Jordan will again hold the industry focused conference, in May this year. “We are looking to attract the same caliber of international speakers and industry experts, again aiming to share international industry standards, latest best practices and successful activities that can be adopted for the benefit of the numerous communicators in our industry.”
IAA Jordan is a non-profit organization dedicated to the development of the local marketing and communications industry and the promotion of the critical role of advertising as a vital force in economic development as well as training and educating local professionals on marketing principles. IAA Jordan’s vision is to be the champion that advocates the freedom of commercial speech and the right to choose, promoting a positive culture of open communications and exchange of ideas and information.
