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'Balancing content, ads biggest challenge'

Discussing the challenges facing advertising today, the panelists said that the GCC market was underinvested in terms of advertisement. As an investor, I want to know my Return of Investment (RoI), said Mohammed Al Mulhem, Group Director for Marketing Commercial and PR.

Other panelists included Prince Faisal bin Salman bin AbdulAziz Al Saud, Chairman, Saudi Research and Publishing, Mike Gillam, Chief Media Buyer, Unilever Middle East, Zafar Siddiqi, Chairman and CEO, CNBC Arabiya and Tom Gardner, President, Readers' Digest International who was also the moderator.

Expressing his views on RoI, Gillam said that the main reason for underinvestment in the ad sector in the AGCC market was due to the absence of a 'people's metre'. "There is no public metre that can gauge who is watching what channel at what time, he explained.

He also said that in other parts of the world, such print audits have already been established and that is very important for advertisements. If I do not have information about the customers, I will not spend, he added.

Prince Saud said that there were two issues challenging advertising today. In print media, there is market segmentation. Newspapers are not for everybody and there is no room for a Pan-Arab newspaper, he said. He also argued that local newspapers were more profitable than Pan-Arab ones.

Ad revenue versus content is another issue. Earlier, 40 percent revenue was generated from sales and 60 per cent from advertisement. Now the stress is on subscription. Sales revenues are down and subscription is up, he said.

"Now it is the power of ad money revenue against the power of journalism standards," he added.

Zafar Siddiqi said that in the Middle East only 0.9 per cent per capita was spent on advertisement. If oil prices remain as low as expected, we will see a growth in ad revenue, he added.

Talking about Internet journalism, all panelists agreed that it was not a threat. In fact, it is complimentary service provided by newspapers while it complements TV, they said.

They also saw the rapid growth of TV channels in the Middle East as major revenue generators. At present, there are over 200 channels in the Middle East that have an annual spending of $300 million, the panelists said.

GCC advert association delayed

THE establishment of an GCC Association for Advertisement to implement a people's metre on television has been delayed till the first quarter of next year because the Dubai Chamber of Commerce and Industry (DCCI) has not yet granted it a legal status due to administrative problems, said Mike Gillam.

He said that the delay in establishing a body to gauge who was watching what on TV was in the process of being established in the UAE except for the administrative glitch at the DCCI. "We have the financing and backing of big organisations, but we do not have a legal status due to which we cannot open a bank account and proceed with our activities," he said.

Gillam also said that this delay by the DCCI was very frustrating for him, and would also be the same for others as well. At present, we do not know the audience we are reaching. This metre will help advertisers know their target market.

• UAE