Research shows the disparity between smartphone users and advertising spend on mobile and digital in the Middle East and North Africa (MENA) region remains one of the highest in the world, offering huge potential for growth in the future.
The report by Deloitte, titled The Telecoms Media and Technology Predictions 2013, forecasts that mobile advertising spend will touch an estimated USD 8.3 billion this year, globally. Out of this total, about USD 4.9 billion will be directed towards smartphones, while USD 3.4 billion will be spent on tablets.
In the Middle East, advertising made up only 6 percent of the total digital advertising spend. Compared to other developed markets, such as the UK where it accounts for 32 percent of total spend, that figure is seen as “extremely low” with significant potential to increase in the coming years as consumers embrace the technology.
Last year, around 6 percent of global smartphones were shipped to the Middle East, but the spend on mobile advertising was less than 0.1 percent.
The UAE boasts about 3 million users of digital apps and 3.6 million internet users. However, the mobile advertising revenues were around USD 7 million, while internet advertising revenues totaled USD 280 million. The mobile advertising spend is expected to climb to USD 15 million this year. In comparison, the U.S.A. has about 220 million app users and 245 million internet users, with mobile advertising revenues soaring to USD 3.4 billion.
Although Middle East consumers spend on average two hours a day on the internet and three hours on TV, the advertising on television attracts about 40 percent of advertising budgets. The huge disparity may be explained by the UAE’s late start in the digital era. With the development of high quality telecom infrastructure and greater penetration of smartphones and tablets, the popularity of digital advertising is expected to increase in the coming years.
The digital advertising in region is still focusing on pushing brands — rather than creating a pull effect through high quality local content. As consumers change their mindset and buying preferences, the boom of e-commerce is likely to benefit digital advertising.