A time of transition: Online and mobile segments have much potential, while print remains dominant for now

Print media, particularly daily newspapers, continues to dominate the Jordanian advertising market. Local television receives only a small share of total national advertising spend as a result of Jordanians’ preference for pan-Arab stations over local channels. Currently, online advertising is limited and faces a number of technical and cultural challenges, but industry figures believe that the segment will soon see rapid growth. International and regional agencies are stepping up their presence in Jordan through branch openings and purchasing stakes in local firms, often aiming to target the wider regional market as well as the domestic one. Although 2011 was a year of contraction in certain segments of the market, some sectors, like the travel industry, appear to be increasing purchases.

SECTOR PERFORMANCE & CLIENT INDUSTRIES: International market research firm Ipsos put total advertising spend for 2011 at $230m in 2011. This was down significant from the total revenue generated the previous year, which came in at $317m.

Despite the downturn in Jordan’s inbound tourism (see Tourism chapter), the tourism sector has been advertising heavily in 2012. “Over the past year, many travel agencies have been taking out ads on newspaper front pages,” said Samir Barhoum, the editor-in-chief of the Jordan Times. According to the Pan Arab Research Centre (PARC), the hotel, travel and tourism sector was in first place in terms of advertising spend in 2011, with 21% of total spend, followed by retail and then communications and public utilities, which had been number one for the three previous years.

However, Ipsos, which categorises advertising spend differently from PARC, found the leisure and entertainment sector to be first in ad spend with outlay of $40.7m (18% of the total market, up from 15% in 2010), followed by the services sector with $35m (15%, up from 11% in 2010 ), the information and communications technology (ICT) sector in third with $26m (12%, up from 11% the previous year), and banking and insurance in fourth with some $23m (10%, up from 7% in 2010).

Mobile network operators topped the list of the largest individual companies by advertising spend in 2011. According to data from PARC, Zain was the largest buyer, with an expenditure of $1.74m, followed by Orange ($1.31m), Umniah ($650,000), Housing Bank ($474,000) and Amman’s Samih Mall ($422,000).

Media and advertising industry players say that sectors most affected by the global and regional economic downturns have reined in spending the most. “Three years ago, we would see around 10 major adverts a month from real estate firms; now we usually see none,” Qais Elias, the managing director of magazine group JO Publishing told OBG. Figures back this up: advertising spend by insurance, real estate and properties companies declined from $8m in 2008 to $2m in 2011, according to PARC figures.

ADVERTISING PLATFORMS & MEDIA: Print media still dominates as an advertising platform. Ipsos figures put the segment’s share of combined advertising expenditure (not including online advertising, which is largely undocumented but believed to be small) at $159m in 2011, or 69% of total spend.According to figures published in Campaign magazine’s Middle East edition in early 2011, Al Rai newspaper leads with a market share of 26%, followed by Al Ghad (19%) and Al Doustour (16%). The print segment relies on advertising for its survival. “Magazines mainly depend on advertising rather than sales,” Elias said. Barhoum of the Jordan Times told OBG that the sales price of a copy of its sister paper Al Rai is well below its production cost, with advertising revenues making up the difference.

Mobile operators accounted for three of the top four purchasers of space in newspapers in 2011, according to PARC, with Orange in first place at $4.6m, followed by Zain in third ($3.3m) and Umniah in fourth ($2.9m). (PARC’s figures for the overall size of the market in 2011 are significantly lower than Ipsos’s.) Samih Mall was the second-largest buyer of newspaper ads with $4.2m, and fifth place was held by travel agency Dallas Travel. Four banks also featured in the top 15 firms.

In the magazine segment, luxury goods and jewellers accounted for two of the top three buyers of ad space in 2011, according to PARC. Rolex was the second-largest purchaser, spending $195,000, followed by Kurdi Jewellery in third place with $138,000. Several more watch and jewellery firms also ranked in the top 15 buyers of magazine advertising that year, including Swatch and Imseeh Jewellery.

“Luxury retailers are doing well and continuing to advertise heavily. Local jewellers even started their own magazine so they could advertise more,” Abdul Wahhab Kayyali, senior associate at JO Publishing’s business intelligence monthly Venture, told OBG.

TELEVISION: PARC and Ipsos both put television’s share of the Jordanian advertising market at 9% in 2011. State-owned network Jordan Television (JTV) accounts for about half of expenditure on TV commercials, according to figures cited by Campaign. Mobile content provider Takarub was the largest spender on TV commercials according to PARC data, with $1.7m, more than twice that of second-placed buyer Ramadan Mana Ahla at $760,000. Mobile content provider BeeCell was in third place with $679,000 of airtime purchases.

Print media’s dominance and television’s small market share make Jordan an unusual advertising scene by international standards. “In most countries the bulk of advertising spend goes to television, but here the TV market is small,” said Elias. Pan-Arab channels based outside of Jordan are responsible for this as they tend to be more popular than the state-owned local television network. This reduces the attractiveness of local television as a marketing platform, while the pan-Arab channels are expensive and not well-targeted given that Jordanians make up only a small part of their audience. “Television advertising in the region predominantly revolves around the major free-to-air pan-Arab channels,” Jawad J Abbassi, founder and general manager of Arab Advisers Group, told OBG. Television advertising’s market share has also been falling in recent years according to PARC data, from 18% of total ad spend on print media and TV in 2008 to 10% in 2011. Industry leaders say that a major reversal in the trend is unlikely, despite recent developments in the Jordanian television industry. Advertisers are reluctant to invest in major sponsorship deals until channels can demonstrate that they are clearly viable, which can create a chicken-and-egg-type problem. “Advertisers will hold back to see whether new local channels can survive before they start buying time on them,” Elias told OBG.

RADIO: Radio accounted for 13% of advertising spend in 2011, according to Ipsos figures, unchanged from 2010 and set to boost its share in the future. “FM radio is on the rise and is aggressive about gaining market share,” Abbassi told OBG. The most popular channel in terms of ad spend is Sawt Al Ghad (“voice of tomorrow”), with a radio advertising market share of approximately 15%, followed by Hayat and Rotana.

OUTDOOR: While Ipsos figures show spending on most advertising platforms falling significantly in 2011, revenues grew slightly in the outdoor segment, from $17m in 2010 to $20m in 2011, or 9% of total ad spend. However Abbassi believes that outdoor is unlikely to remain amongst the faster-growing markets in the longer term. “The billboard segment has plateaued; it’s good for brand messaging but its heyday has gone, and segment turnover is likely to grow at the same rate as national GDP at most,” he told OBG.

Mobile phone network operator Zain was the largest purchaser of outdoor advertising in 2011 at $1.2m, according to PARC figures. (Zain’s two biggest competitors do not feature among the top 15 buyers of outdoor space in 2011.) Other companies include: banks, with Al Etihad Bank placing number two at $736,000, and food/beverage companies and fast food restaurants, with Pepsi in third place at $730,000, and KFC, Burger King and McDonald’s all featured in the top 15.

DIGITAL ADVERTISING: Internet usage is booming in Jordan, and penetration stood at 50.5% by the end of 2011, according to the state’s Telecommunications Regulatory Commission (TRC), up from 30% in August 2010. Growth is largely being driven by the launch of 3G services in the country in 2010, a move which has made making internet access more widely available.

Despite the major opportunities in online advertising that go along with increased internet usage, “advertising in Jordan still revolves around the major daily newspapers,” Nadine Tadros, chief communication strategist at consulting firm TactiX, told OBG.

“Jordanian online advertising is still in its infancy,” Elias said. “The market and technology is still quite basic; many sites, for example, will sell an advert on their website for a fixed rate for six months, regardless of page hits.” Given such limitations, many Jordanian online media outlets rely on revenue from third-party international advertising providers rather than bespoke commercials. “Our website receives some local ads, but at the moment we rely mainly on Google AdSense,” said Barhoum, which launched a new website in December 2011, as did the Jordan Times’ sister paper Al Rai.

Jordan’s emergence as an IT and electronic content production hub means that online advertising should advance quickly. Industry figures say that the best opportunities for growth lie on the web and other forms of marketing made possible by communications technology. “Online advertising is the most promising niche in the Jordanian market, followed by mobile. The internet will eventually take more of the advertising pie, but print media is likely to remain dominant for the next five to six years,” Abbassi predicted.

Cultural factors and a lack of familiarity with new technologies constrain the growth of technology-driven advertising, but this is changing. “Some traditional companies in Jordan are reluctant to advertise online. Often, they are simply unfamiliar with online media. That said, advertising clients in Jordan are getting savvier and becoming more receptive to new forms of business promotion,” Tadros explained.

Technological advancements, such as a high rate of mobile penetration, are offering opportunities for targeting consumers. However, certain cultural practices, like the tendency for heads of households to register all family members’ phones in their names, represents a challenge to targeted mobile advertising by making it difficult to acquire data on subscribers, and limited information on customers makes it difficult for companies and media outlets to tailor their offerings to specific consumer groups. The lack of advertising research in the country remains a problem for local advertisers as well. Other issues, like high SIM card turnover due to low prices, also hinder marketing efforts. “People change SIM cards a lot given that you can get a new line for same cost as buying new phone credit,” said Bashar Hantouli, the CEO of Beecell.

Still, mobile advertising services are becoming more sophisticated, boosting options for feedback and research. In December 2011 Jordanian mobile operator Umniah concluded an agreement with Telecom Enterprise for the provision of targeted wireless application protocol-based mobile advertising services, which will allow companies to market products and services to Umniah clients and receive reports that enable measurement of results.

REGULATORY ISSUES: Industry figures point to a number of issues where they believe regulation and government policy could be more supportive. “One issue is that there are no tax exemptions for corporate social responsibility (CSR) initiatives. When companies engage in CSR, they want to advertise their good deeds, so this tax policy limits opportunities for advertisers,” Tadros told OBG. “The government’s outdoor advertising policies have become less generous because they have eliminated minimum guarantees,” added Al Bitar. “ The regulatory regime puts restrictions on some sectors; for example, pharmaceutical companies in Jordan cannot advertise. However industry players say that trying to heavily police advertising in the age of online media is a losing battle for the authorities. “Broadband internet has changed the rules,” Abbassi told OBG. “Media borders are porous and it is becoming meaningless to regulate media and advertising as advertisers can easily bypass local regulations. For example, retailers and restaurants often advertise on Facebook and Google, making local regulations largely irrelevant.”

AGENCIES: According to Abbassi, the advertising agency market is quite fragmented, with no firms controlling more than 25%. The biggest players are mostly affiliations between major international firms and local franchisees. “There are not many purely local players in the Jordanian market,” he told OBG.

In January 2012 global advertising firm JWT took a 51% stake in a new local company that would in turn acquire Jordanian marketing and communications agency IDEA, JWT’s Jordanian affiliate. Major accounts at IDEA, which is to be renamed JWT Jordan, include telecoms firm Zain and banking giant HSBC. The company employees 27 people and had a turnover of $1.35m in 2011. In another example of recent deal-making, Memac Ogilvy & Mather Jordan merged with local independent agency Advise in March 2011, giving rise to a new company, MemacOgilvyAdvise.

International and regional players are also increasingly entering Jordan by setting up local offices. Dubai-based marketing and events agency Entourage opened an office in Amman in February 2012. In November 2011 South Korean agency Cheil Worldwide announced plans for a Jordanian branch in the near future, and in May 2011 digital marketing firm Tribal Fusion said it would soon open an office in Jordan. The kingdom’s centrality makes it an attractive regional centre for many agencies seeking to enter the Middle Eastern market.

OUTLOOK: Future profits and possible increases in ad spend will depend on consumer behaviour and the performance of the wider economy. However, as internet penetration rates rise and the country’s ICT infrastructure becomes more advanced, online and mobile advertising will have more sophisticated options to offer, allowing advertisers and their clients to identify and target local customers with increasing accuracy.