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UAE internet advertising set for world’s fastest growth

PWC said internet advertising would grow at a compounded rate of 10.7 per cent a year to reach $195bn by 2018. Pawan Singh / The National

Internet advertising in the UAE is set to grow the fastest in the world, according to research from PWC.

The yearly Entertainment and Media Outlook report outlines the latest trends in the industry and was presented on the sidelines of the Dubai International Film Festival on Thursday.

PWC says the UAE’s internet advertising sector is worth $229m, but that is set to rise to $735m by 2018, for a compound annual growth rate of 34.6 per cent. PWC said that would be the highest rate in the world, with Nigeria in second place with 32.7 per cent growth followed by Egypt with 31.8 per cent.

Worldwide, it said internet advertising would grow at a compounded rate of 10.7 per cent a year to reach $195bn by 2018.

“Growth is now digital, there is no hiding from that and mobile advertising is really spearheading this migration,” said Philip Shepherd, a partner at PWC.

The growth is directly related to internet access and the number of internet subscribers. The UAE has the highest smartphone penetration rate in the world, expected to reach 85 per cent by next year, according to figures from the consultancy IDC.

The substantial growth rate is primarily a result of the low starting base, said Mr Shepherd.

Yousef Tuqan Tuqan, the chief innovation officer at the Leo Burnett advertising agency: “The fact the UAE will have the fastest growing internet advertising is not a surprise.”

“The gap between digital spend on social platforms and consumer time spent on those social channels is massively imbalanced,” he said. “We’ve been trying to make the shift from analogue to digital and digital to mobile now. Channels like YouTube and Facebook have done a great job of creating monetisable platforms.”

Separately, the PWC report also highlighted how a lack of Arabic content online was hampering the region’s entertainment industry.

One reason for this is the lack of structured funding for the Arabic entertainment sector. Ayman Jamal, the chief executive of Barajoun Entertainment, the region’s first animation and special effects house, said he found it very difficult and challenging starting up the company.

“I was depending on friends and relatives and personal networks to make it happen,” he said. “I think we lack experience in the investment in entertainment industry in general. Unfortunately we are depending a lot on watching movies and playing games, not developing it.”

Triska Hamid
December 11, 2014
Updated: December 13, 2014 01:10 PM
The National