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Bahrain - Advertisers looking to bounce back

Friday, 30 April 2010 14:59

Having ridden out the worst of the global financial crisis, Bahrain's advertisers are looking to bounce back with solid growth this year, and early results suggest their optimism is well placed.

Last year saw around $103m spent on advertising in the Kingdom, down from the $109m of 2008, according to data from the local chapter of the International Advertising Association (IAA). This is just over a 5% fall off in expenditure that came against the backdrop of a global economic slowdown.

However, while GDP may have remained almost flat in 2008, advertising is one of the first expenses many firms look to reduce when seeking to cut costs. In Bahrain, it was industries most affected by the economic crisis that went furthest in lowering their expenditure on promotional activities in 2009, with spending by the real estate sector down 44%, compared to its outlays in the preceding year. Spend levels by the financial sector, one of the largest contributors to the Bahraini economy, were down about 18%, while hotel-and-tourism and vehicle advertising were each down 13%, according to IAA Bahrain Chapter figures released in late January.

While the year-end figure was down, there were strong indicators in the last quarter of 2009 that Bahrain's advertising sector was on the way back, with client spending starting to creep up back towards pre-crisis levels.

This trend has accelerated into the new year. In mid-April, the Pan Arab Research Centre (PARC) released its latest study into the region's advertising industry, with the results showing a sharp turnaround for the industry locally and throughout the Middle East and North African.

With the exception of the UAE, all of the markets covered in the report recorded positive growth, placing Bahrain as one of the best performers. According to PARC, having contracted by 9% in the opening three months of 2009, the Kingdom's advertising spending shot up by 43% in first quarter of this year, second only to Egypt in terms of expansion.

With spending on the rise, confidence is also growing, with industry leaders positive for the future after having shrugged off the worst of the immediate past.

Announcing a new tie up with regional advertising giant BPG in late February, Metaphor Communications chairman Premal Patel said that while the local sector had been impacted by the recession, the effects had not been as drastic as for some.

"Of course Bahrain has felt the impact of the global downturn. However, it has held firm and is not as bruised as some of our regional neighbours," Patel said.

Describing the country, and its economy, as being in "an energetic mode", the Metaphor chairman said his company was looking to play a role in driving economic growth.

Khamis Al Muqla, president of the Bahrain Chapter of the IAA and the chairman of the Gulf Marcom Group, the Kingdom's first independent advertising agency, also foresees a positive outlook.

"Clearly we have been affected by the economic crisis but brands have to stay and advertising is a long-term investment," he told local media earlier this year.

In order to play that role to the full, local industry has to raise its game so as to reach its true earnings potential and contribute to the country's economic recovery, said Al Muqla. The sector has to be more creative, not just in designing advertising materials for clients but in showing clients how advertising is a useful tool and can add value for them, he added.

"The industry has to start thinking out of the box and encourage clients to invest in sales," Al Muqla said. "We have to be much smarter in the current economic situation. In Bahrain we should be looking at an annual spend of around $150m to drive the economy forward."

It may be some time before that target is achieved, despite the fact that Bahrain's advertising sector is again moving forward. Expenditure has wavered around the $110m mark for the past few years, but the industry should continue its gradual and methodical development in the years to come.

Global Arab Network

This article is published in partnership with Oxford Business Group

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