Middle East and North Africa Digital Advertising Market to Surpass Valuation of USD 44,827.0 Million by 2032 | Astute Analytica

Key markets include the UAE, Saudi Arabia, Qatar, and South Africa. Social media advertising dominates, accounting for $1.73 billion in ad spend. Mobile is expected to generate highest digital ad revenue in the region.

New Delhi, May 28, 2024 (GLOBE NEWSWIRE) — The digital advertising market in the Middle East and North Africa is experiencing robust growth, with the market valued at US$ 6,636.5 million in 2023 and projected to reach US$ 44,827.0 Million by 2032, growing at a CAGR of 23.9% during the forecast period 2024–2032.

Mobile advertising leads the market with a 28.1% share in 2023, driven by the widespread use of smartphones in countries like Saudi Arabia, UAE, and Egypt. Internet advertisement expenditure in MENA is expected to rise from $4.4 billion in 2020 to $7.9 billion by 2024. Social media advertising is significant, with 78% of shoppers in the Middle East using social media for purchase inspiration, compared to the global average of 37%. Video on Demand (AVOD) revenue in MENA has also seen substantial growth, reflecting the increasing consumption of digital content. The average cost-per-click (CPC) in Google Ads search advertising varies significantly across MENA countries, highlighting diverse market dynamics.

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In Q2 2023, social media users in the Middle East digital advertising market spent nearly four hours per day on platforms like Instagram and TikTok, almost double the consumption levels in Europe. The programmatic advertising market in MENA is expected to grow at a CAGR of 7.89% from 2024 to 2032. The retail, hospitality, and aviation sectors are major contributors to digital ad demand due to the region’s status as an international trade and tourism hub. Government initiatives, such as the UAE Strategy for the Fourth Industrial Revolution, are propelling digital infrastructure investments, further boosting the digital ad market. Influencer marketing is highly effective, with every dollar spent yielding an average return of $5.20. The degree of digital penetration among Middle Eastern consumers is now comparable to leading European and North American countries.

Internet advertising in the MENA digital advertising market is projected to increase by about $500 million to $3.6 billion in 2023. However, the region faces challenges, including a lack of qualified talent and agencies capable of delivering cost-effective results in paid search and display advertising. Brands are increasingly demanding enhanced consumer insights and analytics to improve ROI and ROAS. While TV advertising remains flat at nearly $1.4 billion, newspaper advertising is expected to decline from $331 million in 2022 to $313 million in 2023. Radio attracted $178 million in 2022 and is predicted to reach $192 million in 2023. Major e-commerce platforms like Souq, Noon, and Jumia are significant players in the digital ad space. The high levels of digital engagement in the Middle East offer brands opportunities to develop cutting-edge features tailored to local consumers. The UAE’s hosting of COP 28 in 2023 presents significant opportunities for digital advertising in sectors exploring sustainable solutions. Finally, the planned phase-out of third-party cookies by Google has been postponed to the second half of 2024, impacting digital advertising strategies.

Key Findings in Middle East and North Africa Digital Advertising Market

Market Forecast (2032) US$ 44,827.0 Million
CAGR 24.09%
By Platform Mobile Ad (28.1%)
By Ad Format Digital Display Ad (24.4%)
By End Users Media and Entertainment Industry (22.6%)
Top Trends
  • Social Video Advertising: Social video ad spending is expected to grow by 21.2% in 2023.
  • Connected TV (CTV) Advertising: CTV ad spending is projected to grow by 27.2% this year.
  • Programmatic Advertising is expanding rapidly
Top Drivers
  • Shift to Privacy-First Advertising (e.g., Cookie Removal)
  • Growth of Retail Media Networks (e.g., Amazon)
Top Challenges
  • Ad Blocking and Media Fragmentation
  • High Costs of Paid Advertising
  • Poor Data Quality and Low-Data Era in North Africa

Unlocking MENA’s Digital Advertising Market Potential: Overcoming Fragmentation and Complexity

The bountiful MENA region crackles with opportunity for the digital advertising market, but navigating its markets is a labyrinthine challenge. The area lacks uniformity, with significant differences in digital maturity, consumer behavior, and regulatory landscapes between countries and even within sub-regions. Although smartphone penetration is projected to hit 60% in 2024 across MENA, there are huge gaps between richer GCC countries and North African ones. For instance, while the UAE boasts nearly universal internet coverage at 99%, Egypt still has 31 million people without access. Saudi Arabia’s booming e-commerce market is on track to reach $88.2 billion in revenue by 2025, but less developed regions are just taking their first steps, with countries like Algeria only beginning to establish a stable e-commerce infrastructure.

Consumer behavior is equally diverse in the digital advertising market: MENA audiences are spread across different social media platforms. YouTube is dominant overall, with 85% of internet users in the UAE accessing it regularly, whereas Facebook reigns supreme in Egypt with 44 million users. Snapchat is making significant strides among young Saudis, with a 20% year-on-year increase in daily active users. Language choice is crucial — Arabic dialects mix with Hebrew, Farsi, and other tongues in a region hungry for culturally sensitive, linguistically varied content. For example, localized content in Moroccan Arabic versus Gulf Arabic can result in a 30% higher engagement rate.

Regulation is another complex layer in the growth of the digital advertising market across MENA region. Data privacy laws vary widely across MENA — the UAE takes a stringent stance with its Personal Data Protection Law, while others, like Algeria, still lack comprehensive data privacy regulations. Content that’s allowed practically everywhere can also be prohibited strictly anywhere else. In Saudi Arabia, certain types of advertisements can lead to severe penalties, whereas, in Lebanon, the same content might not face any restrictions. Taxation policies differ too, adding another variable that can move budgets and strategy significantly across various countries. For example, digital ad taxes in Egypt can reach up to 10%, whereas in the UAE, it’s capped at 5%.

Media and Entertainment Industry Leads Digital Advertising Market in MENA by Generating More than 22% Market Revenue

The media and entertainment industry in the MENA region is at the forefront of digital advertising, propelled by several key statistics and trends. In 2023, mobile internet users in MENA surpassed 610 million, with penetration expected to reach 57% of the population by the end of 2024. This widespread internet access has driven digital platform growth, with people in the region spending an average of 3.5 hours daily on social media. Consequently, social media has become the largest segment of digital advertising expenditure, surpassing search and display ads. As per Astute Analytica, digital advertising in MENA is projected to grow significantly, with internet ad expenditure expected to rise by 20% by 2024, while newspaper ad spend is forecasted to decline by 13%. The UAE exemplifies this trend, with digital ad spending anticipated to reach $1,134 million by the end of 2024. The country also boasts over 100% active social media penetration, highlighting its digital prowess.

The overall advertising expenditure in MENA digital advertising market is set to exceed $12 billion by 2024, up from $9.2 billion in 2021. This surge is supported by the increasing allocation of marketing budgets to digital channels, with 72% of marketing budgets now devoted to digital marketing and an estimated 60% of marketing expected to be digital by the end of 2024. Government initiatives, like the UAE Strategy for the Fourth Industrial Revolution, are further accelerating this growth by enhancing digital infrastructure and promoting advanced technologies.

Additionally, the rise of video-on-demand services, digital music, and video games in the region is attracting substantial advertising investments. High engagement on platforms like YouTube, especially in Saudi Arabia and Egypt, underscores the lucrative opportunities for digital advertising in the MENA media and entertainment industry.

Heavy Spending on Digital Display Ads in MENA Makes it the Largest Revenue Generating Segment of Digital Advertising Market, Controls Over 24.4% Market Share

In 2023, the MENA region has seen a significant surge in digital display ad spending, driven by several key factors. Internet penetration has grown from 35.3% in 2010 to 70.3% in 2023, providing advertisers with a larger online audience to target. The COVID-19 pandemic accelerated the shift to digital channels, with consumers spending more time online for work, entertainment, and socializing. This increased online presence has made digital display ads more effective and attractive to advertisers. Technological advancements have also played a crucial role. Improved targeting capabilities allow advertisers to deliver highly personalized ads, enhancing engagement and conversion rates. Real-time tracking of campaigns further boosts the appeal of digital display ads.

The MENA digital advertising market mirrors this global trend. Internet ad spend in MENA is expected to increase from $4.4 billion in 2020 to $7.9 billion by 2024. Social media ad spending alone is projected to reach $268 billion in 2023, with social video advertising expected to hit $79.28 billion by 2024. In Q3 2022, there was a 12% increase in social spending compared to Q3 2021. Consumer behavior in MENA is diverse, with YouTube being the dominant platform, accessed by 85% of internet users in the UAE, while Facebook has 44 million users in Egypt. Snapchat is gaining popularity among young Saudis, with a 20% year-on-year increase in daily active users. This diversity necessitates tailored campaigns and localized content, which can result in a 30% higher engagement rate.

Regulatory landscapes also influence ad spending in digital advertising market. The UAE’s stringent data privacy laws contrast with the lack of comprehensive regulations in countries like Algeria. Taxation policies vary, with digital ad taxes in Egypt reaching up to 10%, compared to 5% in the UAE. The programmatic advertising market in MENA is expected to grow at a CAGR of 7.89% from 2022 to 2027. Government initiatives, such as the UAE Strategy for the Fourth Industrial Revolution, are propelling digital infrastructure investments. Influencer marketing is also highly effective, with every dollar spent yielding an average return of $5.20.

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UAE and Saudi Arabia Are Leader in MENA Digital Advertising Market

In 2023, Saudi Arabia and the UAE have emerged as the leading consumers and spenders in digital advertising within the MENA region, propelled by a blend of technological adoption, economic development, and demographic trends. The high mobile penetration rates are a significant driver, with Saudi Arabia’s smartphone penetration expected to hit 97.1% by 2028, while the UAE boasts an impressive social media penetration rate of over 100%. Internet usage in these countries is among the highest globally, with the UAE covering 99% of its population and Saudi Arabia closely following with a 99.0% internet penetration rate.

Digital engagement in these nations is robust, with Saudi consumers engaging at a rate of 78%, and UAE consumers interacting with an average of 4.5 industries through digital channels. Both countries are also investing heavily in AI and ML technologies, with 72% of companies in the region planning to invest in these areas within the next three years. This technological investment is mirrored in the e-commerce sector, which is experiencing rapid growth, further fueling digital ad spend in the digital advertising market. Social media usage is another critical factor, with the UAE having 10.00 million social media users as of January 2023, and Saudi Arabia having a strong Twitter presence, with 38% of its population using the platform. Video advertising is also on the rise, with projections indicating that video ad spend in MENA will reach $2.8 billion by 2025, with Saudi Arabia at the forefront of this trend.

Government initiatives such as Saudi Vision 2030, which includes significant investment in expanding 4G and 5G networks, are enhancing digital infrastructure and, by extension, digital advertising opportunities. The UAE’s cultural diversity makes it an attractive market for international brands, necessitating tailored advertising strategies that can effectively engage a multicultural audience.

In terms of spending, Saudi Arabia had the highest digital advertising expenditure in the MENA region in 2021, with the UAE close behind. Influencer marketing is also significant, with Saudi Arabia’s “Mawthooq” program ensuring that influencer marketing aligns with cultural norms. Data protection laws in both countries impact how advertisers collect and use consumer data, emphasizing the need for compliance and security in digital advertising strategies.

 Middle East & North Africa Digital Advertising Market Key Players

  • 7G Media
  • Alibaba Group Holding Limited
  • Amazon
  • Amplify Dubai
  • Apple Inc.
  • Applovin Corporation
  • Backlite Media
  • Baidu
  • Boopin
  • Dentsu Inc.
  • Digital Gravity
  • ELAN Group
  • Facebook Inc.
  • Google, Inc.
  • Grey Group
  • Havas SA
  • HyperMedia FZ LLC
  • Microsoft Corporation
  • MiQ Digital
  • Mr Creative Social
  • Nokia Corporation
  • Tencent
  • The Interpublic Group of Companies, Inc.
  • Twitter Inc.
  • Verizon Communications Inc.
  • Yahoo! Inc
  • Other Prominent Players

Key Segmentation Overview:

By Platform

  • Mobile Ad
  • In-App
  • Mobile Web
  • Desktop Ad
  • Digital TV
  • Others

By Ad Format

  • Digital Display Ad
  • Programmatic Transactions
  • Non-programmatic Transactions
  • Internet Paid Search
  • Social Media
  • Online Video
  • Others

By End User

  • Media and Entertainment
  • Consumer Goods & Retail Industry
  • Banking, Financial Service & Insurance
  • Telecommunication IT Sector
  • Travel Industry
  • Healthcare Sector
  • Manufacturing & Supply Chain
  • Transportation and Logistics
  • Energy, Power, and Utilities
  • Others

By Country

  • UAE
  • Saudi Arabia
  • Qatar
  • Algeria
  • Morocco
  • Libya
  • Rest of MENA

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