Advertisers and broadcasters in the Middle East are joining together to try to crack open the regional television advertising market by changing how ad rates are calculated, a move that could spur a sharp increase in spending by global firms such as General Motors Co., Unilever PLC and Ford Motor Co.
Big ad buyers, who are keen to reach wealthy citizens in Saudi Arabia, the United Arab Emirates and other countries in the region, say the Mideast market is stunted by the lack of transparency in the audience size of regional-TV broadcasters and by media-buying firms that charge high fees compared with other parts of the world.
Spending on TV ads in the Mideast — a region of 300 million people and 16 countries — is estimated at only $1.5 billion to $2 billion a year, equivalent to the total advertising spend in Turkey, which was a population of about 76 million.
Broadcasters, telecommunications operators and advertisers are now working together to create "people meters," or real-time audience measurement systems, that can accurately value TV advertising slots. Media consultants predict the market could grow by as much as 50% if people meters become widely used in the U.A.E. and Saudi Arabia.
The new people meters were set up in 850 homes last year in the U.A.E. — the test case for the region — by Emirates Media Measurement Co., known as Tview, a not-for-profit company backed by broadcasters Abu Dhabi Media, Sharjah Media and Rotana Group, as well as by Emirates Telecommunications Co., known as Etisalat, the country's biggest telecoms company and a major advertiser.
The devices use a pool of viewers to reflect the demographics of the country and offer next-day details such as what viewers are watching and when, according to the companies setting up the systems.
The people meters will provide a quantifiable rating, and negotiable currency, to advertisers and allow them to come up with much more targeted ad campaigns, some analysts, media-buying firms and advertisers say.
"The problem we have here is that one of the most important influences is knowing the audience and the truth is we do not know the audience," said David Porter, media director for the Middle East, North Africa, Russia and Turkey at consumer-products giant Unilever. "But data will attract more advertising dollars to the region because, at the moment, the money that could flow here doesn't."
Currently, the price of television ad spots in the Mideast tends to be based on rates set by the broadcaster, which in turn depend on the cost of producing the show and in-house research by media-buying companies on the most popular channels and shows, according to media-buying companies and consultants.
In the U.S. and Europe, audience measurement systems, organized by companies like Nielsen and Kantar, are correlated to the rates set by broadcasters for ad slots.
Advertisers in the Mideast say there is no direct correlation between the price they pay for an ad, and the audience they will reach.
The regional TV advertising spend per capita in the Mideast and North Africa is 3.5 times less than in Western markets, such as the U.S., and 2.5 times less than Asian markets such as China, India or Thailand, according to management consulting group Oliver Wyman.
If the push for people meters is successful, it will reduce the influence of advertising firms, such as the Lebanese-owned Choueiri Group, which has a large role in setting ad rates because it is the sales partner for Dubai-based Middle East Broadcasting Corp. and Dubai Media Inc., two of the region's biggest broadcasters.
MBC is believed to have a market share of between 60% and 80% of the ad spend among pan-Arab broadcasters, according to industry executives and analysts, making it the dominant player in the region. MBC doesn't release marker-share information.
The people meter plan could fall apart if the ad firms don't cooperate with the new system, say industry executives and consultants.
Ad firms deny that their fees are unduly high. Amer El Hajj, the exchange director for VivaKi MENA, says the fees are no different from other parts of the world. VivaKi is part of France's Publicis Groupe. Ad firms don't typically disclose their fees.
Tview is now trying to get ad firms and remaining broadcasters, most of which are based in Dubai, to use its data. Some, such as VivaKi MENA, have signed on. MBC, DMI, which is owned by government of Dubai, and Choueiri Group, haven't signed on.
Mazen Hayek, director of public relations and commercial, said the broadcaster supported the people meters projects in both the U.A.E. and Saudi Arabia but wanted to ensure that the data was accurate.
The Wall Street Journal
8 April
