Posts Tagged ‘spending’

The Myth of Monitored Advertising Spend

October 29, 2010 1 comment

It is very common, when meeting with someone from a non-MENA media company, to hear them discuss the billions of dollars spent on advertising in the region. Based on these statistics, the uninitiated build unrealistic business plans or expect to license their content and channels at astronomical prices.

Businessmen from abroad are not the only ones to make the mistake of over-estimating the advertising spend in the region. Frequently, local newspapers will happily print articles about advertising spend and deduce quarterly or annual growth rates from them.

I wish these figures were true. The publishers of these articles fail to explain  that they calculate these figures by simply multiplying forms of advertising by the rate card of the media in which they appear. What they also don’t mention is that in some media, rate cards could be discounted as much as 80%. These figures then fail to take into account advertising inventory that is given away for free to sister companies or as incentives on media buys. These figures finally fail to mention that they do not include all forms of media.

While it is useful, at a very broad level, to look at monitored levels of advertising spend, it would be wrong to make any substantial business decisions based on them. Instead, researchers and companies should rely on knowledge gained from local partners to help them navigate the maze of advertising data before they can trust the numbers. It is the responsibility of the parties issuing these numbers to ensure they provide the proper disclaimers and explanations so as to avoid misleading readers.

Categories: Media Economics Tags: ,