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Pakistan Digital Media Advertising Growth Among World's Fastest

Rapid growth of broadband access in Pakistan is changing the country's media landscape. Digital advertising revenue is forecast to grow by 32% in 2019 to Rs. 10.8 billion ($103 million), 12% of total national advertising revenue (NAR), according to Magna Advertising. Digital marketing expert Lars Anthonisen believes Pakistan is quickly becoming a "digital first country". Anthonisen sees "new opportunities for brands to reach and engage with consumers who may have previously been overlooked". Overall ad spend in Pakistan is expected to rise by 15% in 2019 to Rs. 88.3 billion ($840 million) following a steep decline (-11%) in 2018, according to a Branding in Asia report. Growing availability of smartphones, tablets and mobile broadband is extending the reach of advertisers to digital media where it is possible to precisely target prospective customers.

Return to Media Growth in 2019: 

Magna expects to see a return to growth in Pakistani media revenue in 2019, with television, which makes up two-thirds of total NAR, benefitting from the 2019 Cricket World Cup (+15%), according to a Branding in Asia report.

In 2018, Pakistan media industry went through a major shakeout after a long period of rapid double-digit growth since the turn of the century. Hundreds of journalists and other staff lost their jobs last year.  It was a horrible year for Pakistani media industry which saw steep 11% decline in revenue during the year.

2019 Advertising Growth Forecast. Source: Magna

Digital Advertising Growth: 

Digital advertising is forecast to grow by 32% to Rs. 10.8 billion ($103 million), 12% of total national advertising revenue (NAR), according to Magna Advertising. Digital marketing expert Lars Anthonisen believes Pakistan is quickly becoming a "digital first country". Anthonisen sees "new opportunities for brands to reach and engage with consumers who may have previously been overlooked".

Growing availability of smartphones, tablets and mobile broadband is extending the reach of advertisers to digital media where it is possible to precisely target prospective customers. As of May 2019, there are over 70 million broadband subscriptions in Pakistan and more than a million new subscribers are are being added every month, according to data from Pakistan Telecommunication Authority  (PTA).

Pakistan Telecom Indicators. Source: PTA

Overall Media Market: 

Print and radio are likely to grow as well, now that the initial shock of the government’s strict reforms has worn off and a preliminary IMF bailout agreement has been reached. Digital formats, particularly social (+39%) and video (+31%), will continue to see the strongest growth, +32% to Rs. 10.8 billion ($103 million), 12% of total NAR.

The ad spend in Pakistan is expected to grow by 15% in 2019 to Rs. 88.3 billion ($840 million) following a steep decline (-11%) in 2018.   In 2018, Pakistan media industry went through a major shakeout after a long period of rapid double-digit growth since the turn of the century. Hundreds of journalists and other staff lost their jobs. At least one TV channel, Waqt News, was closed while several others downsized. While such consolidation was long overdue after nearly two-decade long period of explosive growth, the PTI government's decision to reduce advertising budget, which constitutes nearly a quarter of all ad spending in the country, appears to have been the main trigger. Those affected by consolidation are accused the government of exercising press censorship by cutting its ad spending.

Pakistan Broadband Growth:


As of May 2019, there are over 70 million broadband subscriptions in Pakistan and more than a million new subscribers are are being added every month, according to data from Pakistan Telecommunication Authority  (PTA).

China is aggressively pursuing its plans to build a global digital superhighway that runs through Pakistan. This "Digital Silk Road" involves laying fiber optic cables in Pakistan which connect with China to the north and link with Africa and the Arab World via undersea cable to be laid from Gwadar Deep Sea Port built as part of China-Pakistan Economic Corridor (CPEC).

A 820-kilometer long China-Pakistan fiber optic cable has already been laid between the city of Rawalpindi, Pakistan in the south and the Khunjerab Pass, China in the north  and operational since July, 2018.

By 2020, the 6,299 kilometers of underwater cables will extend to Djibouti from Gwadar and form the Digital Silk Route between Asia and Africa. At the same time, a space-based Silk Road will provide satellite navigation support to all BRI (Belt Road Initiative) countries. The first Beidou base station of the Space Silk Road is already operational in Pakistan since 2017.  BeiDou is making rapid progress with 30 BRI countries already linked up.

When completed, the ambitious global initiative would use an exclusive satellite navigation system, BeiDou, fiber networks and 5G on land and submarine cables to create a multi-dimensional digital mega-project across land, sea and space.

Summary:

Rapid growth of broadband access in Pakistan is changing the country's media landscape. Digital advertising is forecast to grow by 32% to Rs. 10.8 billion ($103 million), 12% of total national advertising revenue (NAR), according to Magna Advertising.  Digital marketing expert Lars Anthonisen believes Pakistan is quickly becoming a "digital first country". Anthonisen sees "new opportunities for brands to reach and engage with consumers who may have previously been overlooked". Magna expects to see a return to media market growth in 2019, with television, which makes up two-thirds of total NAR, benefitting from the 2019 Cricket World Cup (+15%), according to a Branding in Asia report. Growing availability of smartphones, tablets and mobile broadband is extending the reach of advertisers to digital media where it is possible to precisely target prospective customers.

Related Links:

Haq's Musings

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Pakistan Media Industry Shakeout

Digital BRI: China and Pakistan Building CPEC Info Expressway

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Pakistan Retail Sales Growth

Advertising Revenue in Pakistan

Pakistan FMCG Market

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Mobile Broadband Speed in Pakistan

Views: 36

Comment by Riaz Haq on August 7, 2019 at 8:04pm

The world of advertising – An overview
BY TAYYAB TARIQ NARULA 

https://www.pakistantoday.com.pk/2017/05/28/the-world-of-advertisin...

Overall, the brands’ budgets are shifting towards digital media at a fast pace and according to Magna Global, an affiliate of the global conglomerate IPG group, it is expected that the digital media spending will surpass TV media spending by 2018

The history of advertising can be traced back to the lost city of Pompeii in 79 AD wherein the advertising messages were found in its ruins. The history of modern advertising starts with the advent of the mediums of mass communication and the first one among them was the printing press. Printing press is said to be the beginning of the European renaissance and enlightenment period due to which people were exposed to the thoughts of the new age philosophers e.g. John Locke, Voltaire, etc. Along with bringing new ideas to the public for enlightenment, it also paved the way for capitalism. In 1472, the first paper bill ads was published by William Caxton for a book and he tacked them to church dooRsSince then, advertising grew with the invention of every new medium of mass communication i.e. Newspaper, TV, Out of Home and Digital.

In 1704, first newspaper ad was published in USA while in 1941 the first TV ad was broadcasted, again in USA. With the advent of cars, out of home advertising became an important medium of advertising. People with a high entrepreneurial spirit found a great opportunity in out of home advertising and even when the government stopped their way, they found creative ways to expand their business. In 1963, the French government put a ban on bill boards, so Jeans Claude Decaux, then a budding entrepreneur, made a deal with the city of Lyons, proposing that he would build bus shelters and keep them clean in exchange for advertising space there. This lead him to create one of the biggest companies in the world in out of home advertising sector having a revenue of more than $6 billion in 2016 and making him a billionaire worth more than $6 billion.

Nowadays, advertising is a huge business because of the rise of transcontinental capitalism. The global spending on advertising for the year 2016 was worth $500 billion, which is more than Pakistan’s total GDP. And if marketing expense is added i.e. market research, public relations, direct marketing, etc, then it makes a total industry of worth $965 billion. Among them, $214 billion were spent on TV and $160.2 billionwere spent on digital, being the two largest mediums. The annual revenue of the Facebook in 2016, which started in 2004 and for the google, the search engine giant, was $27 billion and $89.5 billion respectively. And the revenue model of both of these digital giants only consists of advertising. Among the world’s biggest advertisers are Procter and Gamble, Unilever, L’oreal, Toyota Motor Corporation and Volkswagen.

The world’s biggest advertising markets are US, China and Japan. In US, the multinational companies spend a whopping $180 billion on advertising. The closest market, China is not even half of that. In China, the companies spend 85 billion on Advertising while the next biggest advertising market Japan is again not even half of that with a combined spending of only $38 billion. The other big markets are UK, Brazil, Germany, France, Italy, Australia and South Korea with a combined spending of $140 billion. Interestingly, US spending in advertising is more than the combined spending of the eight countries among the world’s top 10 largest spenders, excluding China. This also represents the strength of the US economy and its high per capita spending as advertising is directly a function of the economy. Whenever the economy performs better, the advertising spending of the companies increases and whenever there is a slump, the advertising sector also faces a downturn.

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