Group M releases their mid-year report for the MENA region, which forecasts the future of spending in the region’s media industry for the remainder of 2020 as well as 2021. In 2019, MENA advertising spend declined by 5.8%. This year, the number is expected to reduce even further as the industry faces a dual-shock from Covid-19 and a drop in oil prices.

Retail and Hospitality sectors have been severely impacted by the disruption of Covid-19, while Lebanon’s economic crisis continues to worsen. Iraq continues to face civil unrest because of the inadequacy of state services and the lack of jobs. In North Africa, the currency faces a depreciation close to 30-40% against the dollar across Egypt and Tunisia. These conditions have forced the World Bank to slash the MENA region’s growth rate for 2020.

But not all industries are suffering from the economic impacts of Covid-19. Demand for video conferencing technologies and SVOD services have surged during the pandemic. A survey by Ipsos found that 70% of VOD users stated that their usage had increased on these platforms, and 40% expressed intent on subscribing to a new platform. The e-commerce sector continues to flourish as more and more people transition towards online shopping for almost everything. The UAE and Saudi Arabia (KSA) represent 60% of the e-commerce market in the region.

Below are the highlights of forecasted growth/decline for different marketing media channels –

Search

  • According to the report, Search will increase by 9% as consumers’ appetite for information grows.
  • Historically, MENA’s search share has been held back by the high proportion of investment behind social and video by regional and global advertisers. However, 2020 is seeing a change in sentiment toward search versus non-search ad spend.
  • According to the report, non-search accounted for 5.7% of internet spend in 2020 and will fall -22% in 2021 as traditional media recovers.
  • The report forecasts growth in search of +11.4% in 2020 slowing to +9% in 2021. There is also anticipation that search will account for 33% of total digital ad spend during 2021, according to the report.

Television

  • Across MENA, 2020 TV ad spend will be -29.5% versus 2019 with its proportion of media spend holding strong at 31%.
  • The report foresees an upward trend in spending across 2021, ascending to a 33% share, similar to what was seen pre- COVID-19 of 33-35%.
  • Despite the growth in consumption in various countries such as Egypt, KSA, Morocco, and Tunisia, during the holy month of Ramadan, investment fell by -30% versus 2019 levels, with declines particularly pronounced in Egypt.
  • The report’s longer-term view believes that the share of spend on TV will remain at 30-35%, as content banking has become an important reality. The average time spent on News and Movie channels has risen by 30% while Entertainment channels saw an increase of 20%-30%.

Outdoor Advertising

  • According to the report, Outdoor and cinema advertising continue to see declines of at least -40% in 2020 but are expected to recover in 2021, growing +50% next year. The reason being, post-crisis, much- anticipated movie releases will flood cinemas creating a worldwide rebound.
  • Across MENA, “stay at home directives” constrained outdoor and cinema ad spend. In KSA, cinema was the new growth medium but with these restrictions, forecasts have been downgraded.
  • Combined- outdoor and cinema advertising are expected to fall to 12% of spending in 2020 but should grow to 18% in the longer-term forecast, according to the report.

 

Print 

  • The pandemic has had grave impacts on the print industry but the report expects a rebound for the medium in 2021. According to the report, spending on print will fall to -66% in 2020 and +83% in 2021.
  • Print’s share of media should continue to decline as in previous years.

Future Expectations 

  • Experts in the report commented on the hopes of witnessing a rise in digital extensions, aided by the emergence of programmatic audio and digital outdoor advertising vehicles.
  • As stated earlier, the pandemic has given a big push to e-commerce in the region. E-commerce enters a new phase of growth and is now seen as an essential channel for the personal and home care categories, whilst electronics and retail are seeing a rapid uptake.