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Local websites face uphill struggle to secure advertising

Most money spent on online ads goes toward advertising with Internet giants like Facebook and Google.

BEIRUT: A sluggish economy and stiff competition from international ad serving platforms will make it difficult for local websites to boost their advertising revenues this year, and there is very little they can do about it, industry experts have told The Daily Star.

Lebanon’s slowing economic growth is expected to weigh on overall advertising expenditures, including online ad spending, in 2013, said Karim Saikaly, founder of E-comLebanon.com, one of the country’s first online marketing and advertising firms established in 2000.

Online ad spending stood at $4.5 million in 2012, some 2.5 percent of $182 million in total estimated real advertising expenditures, according to a joint report by Ipsos MediaCT and ArabAd magazine.

Of the $4.5 million, only $1.5 to $2 million is channeled directly into ads streamed by local websites, while the remaining two third is spent on platforms such as Google and Facebook, Saikaly told The Daily Star.

While local websites still earn a commission for running Google ads, for instance, the returns are negligible when compared to revenues generated from selling ad space directly to clients or local ad agencies.

According to the ArabAd report, total online advertising in Lebanon posted a 29 percent growth in 2012, although experts have been unable to confirm the accuracy of these statistics.

E-comLebanon.com, which oversees nearly one third of locally served ads, recorded a 15-20 percent growth in spending in 2012, Saikaly said.

However, he paints a less rosy picture for 2013:

“The market has been stagnant in the first two months of 2013 and online ad spending is expected to record flat growth in 2013, in line with a slowdown in overall advertising expenditures due to the country’s deteriorating economic situation,” he explained.

Elie Achkouty, regional sales manager at Digital Media Services, said the most popular local websites – mainly political news portals – had seen their local ad revenue decline by 10 percent in 2012.

Achkouty adds that local websites can do little to fend off competition from international ad platforms, which attract advertisers using a small budget seeking to target a large audience.

Nevertheless, Achkouty believes growth in online ad spending will still outpace that of the overall sector in the coming year.

Despite double-digit growth over the past few years, online advertising remains far from reaching its true potential in Lebanon, experts say.

They believe the sector has been hampered by the country’s low-speed Internet and a lack of professionalism and expertise within the majority of advertising agencies.

Further, local websites aren’t investing enough to offer innovative or creative platforms to run rich media ads that lure advertisers who are turning to Facebook and Google, experts add.

Yet, Georges Slim, COO of Lowe Pimo advertising agency, told The Daily Star that despite all the difficulties, online advertising would “definitely” continue to grow, though the growth rate could not be accurately estimated.

Slim added that online advertising had now become a must in any marketing campaign.

“Online advertising is now part of any marketing campaign, therefore it will continue to gain market share,” Slim said.

The ability to target the right audience, interact with customers, receive feedback and communicate with clients through social media networks is supporting the growth trend, Slim added.

Compared to 29 percent growth in online advertising spending, ArabAd reported that radio and TV advertising gained 11 and 8 percent respectively while newspaper and magazine ads grew 5 percent.

Billboard ad spending fell 4.4 percent but maintained its second place in the market.

In terms of market share, television adverts accounted for 39 percent of expenditures at $71 million, followed by outdoor billboards with 23.6 percent at $43 million, and newspapers with an 18 percent share at $33 million.

Magazines and radio attracted 8.8 percent and 7.4 percent respectively.

 
A version of this article appeared in the print edition of The Daily Star on March 07, 2013, on page 5.

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