Viewing figures key to Middle East advertisers



The lack of an accurate TV audience measurement system is one of the biggest barriers to transparency in the Middle East advertising industry, say media executives. Analysts say the introduction of a long-awaited "people-meters" viewer measurement system would allow advertisers to better gauge returns on investment and help to boost overall revenues. In the Arab world US$7 (Dh25.71) a head is spent on TV advertising, compared with $71 in Germany and $229 in the US.

But the introduction of an audience measurement system would boost spending in regional advertising by $2 billion within five years, said a report issued in June by the consultancy AT Kearney. "Auditing is very important. It would definitely boost [total ad spending] because clients would see some more accountability," said Satish Mayya, the chief operating officer of the media buying agency BPG Maxus.

Lance de Masi, the president of the UAE chapter of the International Advertising Association and the American University in Dubai, said measurement was crucial. "When are we going to learn that the whole business model needs re-engineering based on measurement of audience delivery and pricing commensurate with that?" said Mr de Masi. "We will get to true transparency when pricing is determined by accurate audience measurement … when media is priced according to delivery and when agencies are remunerated commensurate with the value they add. For all of that to happen, the long-term view of industry welfare must prevail and we must all be willing to suffer, in the short-term, the effects of tearing down the status quo."

Jayant Bhargava, a principal at the consultancy Booz & Company, said the lack of a measurement system was one of the reasons broadcasters outsourced sales operations. "Selling in the Middle East is not as simple as selling in the US: there are no people-meters here and that's why people don't do [sales] in-house," said Mr Bhargava. The experts say that along with a lack of TV measurement, most of the region's print publications are also not professionally audited. But the growth of digital media in the region will bring with it an inherent transparency.

"Everything in digital media is measured in real time," said Patou Nuytemans, the chief digital officer for Ogilvy Group in Europe, Asia and the Middle East. "As an industry, we're not necessarily ready to deal with that." bflanagan@thenational.ae

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Russia's Muslim Heartlands

Dominic Rubin, Oxford

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The specs: 2018 Maxus T60

Price, base / as tested: Dh48,000

Engine: 2.4-litre four-cylinder

Power: 136hp @ 1,600rpm

Torque: 360Nm @ 1,600 rpm

Transmission: Five-speed manual

Fuel consumption, combined: 9.1L / 100km

The biog

Favourite car: Ferrari

Likes the colour: Black

Best movie: Avatar

Academic qualifications: Bachelor’s degree in media production from the Higher Colleges of Technology and diploma in production from the New York Film Academy

Company%20profile
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COMPANY PROFILE
Name: Kumulus Water
 
Started: 2021
 
Founders: Iheb Triki and Mohamed Ali Abid
 
Based: Tunisia 
 
Sector: Water technology 
 
Number of staff: 22 
 
Investment raised: $4 million 
COMPANY%20PROFILE
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Election pledges on migration

CDU: "Now is the time to control the German borders and enforce strict border rejections" 

SPD: "Border closures and blanket rejections at internal borders contradict the spirit of a common area of freedom" 

Martin Sabbagh profile

Job: CEO JCDecaux Middle East

In the role: Since January 2015

Lives: In the UAE

Background: M&A, investment banking

Studied: Corporate finance

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