Advertising Industry

Recent times have seen an upsurge in the use of the internet like never before. The most efficient way at the moment to promote any business at the moment through digital advertising. The United Arab Emirates, as well as the partners in the GCC group, have not been left behind. Several statistics place the Middle-East and Africa among the fastest-growing regions when it comes to digital marketing.

This article provides you with in-depth research on how advertising in the UAE has revolutionised over the years. We will give you an outline of trends in the past decade and where the country stands now. We will also assess future possibilities in terms of changes and growth rate in digital advertising in the UAE. By the completion of this article, you should have a clear picture of the industry in the Emirates and decide for yourself which advertising route to follow as we assess the effects of all these means.

Global Trends in Digital Advertising

Advertising has been the most significant factor in the sale of goods and services for many years now. Even if you have a great product with excellent quality, it has to reach the right kind of consumer, and advertising or marketing will help a company with it. Therefore the businesses today put lots of money on advertising than the production of a product. According to the eMarketer report in April 2017, paid media advertising outlays worldwide will increase to $583.9 billion.

Here is the Global Advertising Expenditure as of 2017.

The top players in this market are Google and Facebook, which are the big two in digital advertising. They are expected to take more than 50% of all revenue worldwide, and more than 60% in the United States, according to the study made by the firm eMarketer. Baidu is dominating the Chinese market while some local media networks are contending in display market share.

Digital Advertising in the Middle-East

In recent years, experts have predicted that the Middle East and North Africa will show strong growth in digital advertising. Let us take a look at the Digital Ad Spending in the MENA region.

The Middle East and Africa (MENA) are anticipated to register faster growth in the global programmatic advertising platform market.

Digital Advertising in the United Arab Emirates

The UAE, and Dubai, specifically, serves as the commercial centre for the region. Advertising plays a vital role in the campaign of selling product or services. By law, the National Media Council (NMC), which is appointed by the President, licenses all publications and issues press authorisations to editors.  Laws also govern press content and prohibited subjects.  The National Media Council reviews and cuts all imported media for content.  This comprises of establishments in free zones such as Dubai Media City (DMC), RAK Media City in Ras Al Khaimah, and twofour54 in Abu Dhabi.  These free zones are intended to attract marketing and media services, news media, business and information services, music companies, multimedia/Internet, broadcasters, and production firms.  In addition to tax benefits, firms functioning in these free zones have been guaranteed that the government will not censor their news and information content, provided specific relatively liberal guidelines of taste and propriety are met. The content should not criticise leadership in the region, disparage religion, foment religious or ethnic hatred or invade a person’s confidentiality. U.S. firms are strongly advised to consider cultural sensitivities in any promotional activity.

Online advertising is increasingly prevalent throughout the nation and serves as the second-largest advertising intermediate in terms of revenue after newspapers.  Social media is of particular importance to online advertising, UAE residents spend an estimated 3 hours and 11 minutes a day on social media; the highest average in the MENA region and 6th highest globally. This is mainly due to the UAE’s significant 173 per cent mobile penetration rate, which is the largest globally.

Here is the data of the advertising expenditure in the United Arab Emirates from 2004 to 2018 in U.S dollars

The United Arab Emirates has created a niche with many reforms in the advertising sector. With an introduction to the free zones dedicated primarily to the media and advertising industry, it has reinforced its position in the global market. It will continue to reach a higher target given the support of government and entrepreneurs is as tight as it is now.

Analysing the Digital Forms used in the UAE

The Emirates utilised different forms of digital advertising. They range from radio, television to SEO and SEM.

Social media has mainly taken over the market and being used by most advertisers due to their ease and reputation. The social media mania is as widespread as smartphones are – whoever owns one will most certainly be found holding one or several social media handles. Social media marketing involves several platforms. The most popular one's today are Facebook, Instagram, Pinterest, LinkedIn, among other video marketing forms. Yahoo and Twitter also have their die-hard fans. The popularity of these forms has augmented over the years as both the millennial and generation Z find themselves entangled in this unending web. Marketers have therefore seen this opportunity and maximised ads on these platforms. Seldom will you leave your social media platform without coming by several ads – even Google makes millions from this.

Email marketing is another form mostly used by B2B and reaching a record number of B2C. Whatever site you come by right now, you will suitably be given a choice to subscribe to their amenities for a chance to receive useful email updates or even download helpful eBooks. When it comes to email marketing, you can always be sure to have the clicks convert to sales if you go about it in the right manner.

Impact of Advertising and Social Media on Businesses in the UAE

Every year, it is estimated that the growth of internet users is 13% on an annual basis. With this sudden rise, it is only wise to start investing in the different advertising forms in the Emirates. Adopting pure social media marketing firms will give the companies full access to the global community. With almost 99% of the UAE’s population going online, it will be hard for your company not to effectively pry the markets, unless you fail to do it right.

Digital marketing in the UAE will also support you to focus on your targeted consumers. Whether you are using demographics to inspire a certain customer or geography, you are more expected to transform your marketing to sales once you reach your expected customer. This eliminates the need to spend dear amounts contacting to a generalised market with the traditional forms. Nonetheless, the market online is much more significant since ‘everyone’ has a smartphone or a means to access the internet.

National Media Council UAE

The National Media Council (NMC) is a federal body established by Federal Law (1) for 2006 following amendments to Federal Law (91) for 1972 regarding ministries and ministers’ mandates and specialisations.

NMC issues licenses to media institutions and follows up on all printed, published and broadcast media content in the UAE and those imported from abroad. As per the law, NMC is mandated to:

  • Develop the UAE’s media strategy
  • Draft media legislation and safeguard its execution
  • Co-ordinate the media policy between the Emirates in line with the UAE’s rural and foreign policy
  • Ensure support for the federation and project national unity

All media organisations in the Emirates must follow the guidelines and rules issued by NMC and provide information and figures as requested by it.

In the year 2018, the NMC provided an official guide for advertising which aims to explain guidelines for the advertisement sector in the UAE and to safeguard the public from advertising promotions that do not imitate to applicable standards.

All the specialised advertising such as that related to medicine, food, drugs, promotional campaigns, real estate, special offers, or universities and educational institutions must obtain prior approvals from the competent authorities. Apart from this, the advertisement content must –

  • Not endorse the acts of  astrological predictions or  black magic
  • Comply with the conditions and guidelines related to the UAE flag, national emblem and anthem
  • Respect IP rights of others
  • Not advertise alcoholic beverages, tobacco,  narcotic substances, smoking or any related goods and services
  • Be unclear, nor include any false or misleading or fraudulent material
  • Not add images that are fabricated or imitated or that violate IP rights
  • Not lead to misperception or ambiguity with other products or activities
  • Include the spoken Emirati vernacular or the classic Arabic language
  • Identify the advertiser

How to Start an Advertising Agency in the UAE?

Each business, regardless of the field in which it operates, should concentrate on the possibilities of promoting the business activities. There are many cases in which the marketing strategies and the advertising methods are made with the company’s resources. Advertising a product or service of the company is helpful to obtain the desired attention and reach as many audiences as possible. To set up an advertising agency in the UAE, the company must comply with the Advertising Standards published in the UAE official gazette. These standards are issued by the Knowledge and Human Development Authority (KHDA) in Dubai and require that all marketing agencies file their advertisements with the Regulations and Compliance Commission with the Authority.

Activities allowed under Advertising in the UAE

The KHDA provides the under-mentioned means for promoting advertisements –

  • Billboards
  • Printed advertisement
  • Radio and Television ads
  • Email
  • Multimedia ads
  • Posters

Before you set up an advertising agency in the UAE, KHDA provides certain conditions to be followed by the advertiser.

  • They must show respect for religious beliefs
  • They must respect the privacy of people
  • They must not be offensive
  • They must be impartial
  • They must present accurate information
  • They must include the name of the creative agency

Procedure to Set up an Advertising Business in the UAE

The steps to followed to register an advertising business is –

  1. Fill an application form and get initial approval from the Department of Economic Development
  2. Mention the activities the company is performing under advertising to get the advertising license
  3. Register a trading name of your agency
  4. Apply and submit necessary documents to register the business
  5. After you get all the documents and approvals, it will the  to DED, and you will get a license and business incorporation certificate after the final payment

Procedure to Obtain the Advertising License in the UAE

To set up an advertising business, one needs to obtain the license first. The process is smooth and straight-forward.

  1. Obtain the Certificate of Initial Approval. This can be obtained by submitting the relevant documents like copy of passport and ID to the Department of Economic Development.
  2. Get an Office on Rent/Lease. Minimum office requirement to set up any license under DED is 200 Sq. /Ft. It also depends on activity; some activity needs 500 Sq./Ft. Rent for the office also varies the location or Area
  3. Sign the Memorandum of Association with all the partners present at the court

The approvals for getting an advertisement license must be taken from the Chamber of Commerce and Industry, Emirati Municipality, National Media Council, the Department of Economic Development.

Once you obtain the license, you can officially start your advertising activities in the UAE.

Dubai Media City Free Zone

Dubai Media City free zone was established in the year 2001 of January as the region’s leading media hub. The free zone encompasses a media community of over 20,000 people working in over 2,000 regional and international media companies that are pushing the limits of creativity every day. After the launch of DMC, the free zone has developed quickly as a worldwide media centre. It is now a leading free zone committed to the facilitation and promotion of the media and advertising industries of the Middle East. It provides these industries with a business environment which enables industry players to network, collaborate, and operate freely with other companies through the entire value chain while taking benefits provided by free zones.

Benefits of Setting a Business in DMC Free Zone

  • 100% foreign ownership
  • 100% repatriation of profits and capital
  • Companies in DMC are global giants and well-known both regionally and internationally
  • One-stop-shop service for various government issues
  • Zero corporate tax for 50 years
  • Zero import duties and no currency restrictions

Procedure to Start a Business in DMC Free Zone

  1. Apply for initial approval to the free zone authority
  2. Send legal documents for business registration
  3. Sign and return the Customer Confirmation Letter and make the necessary payment
  4. Draft and sign the Memorandum of Association
  5. Deposit the share capital and sign lease and personnel sponsorship agreement

Dubai Media City Free Zone has more than 1,300 Dubai Freezone businesses. Every kind of media business is permitted in this place. This is why entrepreneurs who are looking to conduct a business formation in Dubai Free Zones choose this location if they are after starting a media-centric business.

RAK Media Free Zone

Another free zone dedicated to media and advertising is the Media free zone in Ras Al Khaimah. It was established in the year 2006. It is considered to be the direct competitor of Dubai Media City. Since Dubai is a costly city comparatively, they are making this zone as a beneficial choice for investors looking for a cheaper way to invest. Economically speaking, RAK Media City has been growing at an unprecedented pace in the past couple of years. Its business-friendly environment regulations, favourable towards media industries, have made it an excellent destination for the media and entertainment sector to develop. The media companies receive complete freedom for producing their films, radio, and television shows.

RAK Media City company incorporation, like any other free zone, has procedures that people should follow to have a business setup in UAE. Apart from the primary benefits provided by any free zone in the UAE, here are a few more advantages of business setup in this free zone includes –

  • Cost-effective and wide range of media activities
  • Easy and hassle-free company setup procedure
  • Premium value-added packages for SMEs and startups
  • Dedicated and friendly expert support team to assist you with the registration and provide continuous business support all the way

Conclusion and Insights of Digital Advertising in the UAE

Here are a few points to be noted in the advertising industry in the United Arab Emirates.

  • While TV advertising is still foremost traditional advertising to control the most significant share of advertising in the sector, digital ad spending marketplace will continue to develop in 2019 with a massive opportunity to catch-up with worldwide market rates in the coming years. The region cannot resist profitable advertising.
  • Customers have started asking for payment by results as well as increased consumer understandings and analytics. Even from innovative agencies, as well as media shoppers. This means the entire sector will shift into digital and sophisticated programmatic advertising which is more accountable.
  • YouTube Ads is one of the latest trends in the GCC region, which is going to attract a significant share of TV commercial spending in the coming years.
  • UAE is still leading digital advertising in the MENA region. The majority of local and international brands based in Dubai are massively spending on digital. However, the agencies are outsourcing a big mass of technical and creative work to Egypt, Lebanese and Jordanian startups.

Sadly, there is still a massive gap in digital advertising competence in the area due to the absence of advanced tracking, programmatic technology, and skills. Some of the highest brands are still relying on the UK’s assistance when it comes to search engine marketing. However, there are very advanced regional agencies that need to invest more in building dynamic capabilities in digital advertising technology.