Adspend to fall due to price of oil

ZenithOptimedia has reduced its Middle East and North Africa adspend forecasts for this year.

The Publicis Groupe media agency has downgraded the region’s predicted performance for 2015, from 2.3 per cent growth in 2014 to a 4.5 per cent decline due to falling oil prices.

A further decline of 2.7 per cent is expected for the following year and growth of just 0.3 per cent in 2017.

The United Arab Emirates and Saudi Arabia are both expected to post negative growth with falls of 13.6 per cent and 8.1 per cent respectively. And despite playing host to the World Cup in 2022, Qatar is expected to see a decline of 2.1 per cent this year, from $359 million to $337 million. No recovery has been predicted until after 2017.

Following previous declines as a result of political turmoil, markets in Oman and Bahrain are expected to remain flat for the next two years, while adspend in Egypt is predicted to fall by 6.5 per cent in 2015, despite it seeing a growth of nearly 10 per cent the previous year.

Meanwhile in Lebanon, the pattern of decline from the last five years is expected to level off from 2016 and only see a small drop of 0.6 per cent for 2015. However, the report states the print and outdoor industries are still struggling following the ban on tobacco advertising, which was introduced in 2011.

“The drop in oil prices has had a much more severe effect on the economies in the region [than the conflict in Syria and Iraq], and has prompted advertisers to cut back their budgets in anticipation of lower consumer demand,” says the agency’s report on global adspend.

Political instability across the region and the reduction in oil prices has also affected pan-Arab television spending, which is expected to shrink by nearly 4 per cent from $2.3 billion to $2.2 billion in 2016.

Zenith records the MENA region as one of three no-growth areas for 2015, alongside eastern Europe and central Asia.