A new report, “An Analysis of FM Radio Advertising Rates in the Arab World” released by the Arab Advisors Group, shows that Saudi Arabia, UAE and Egypt have the highest FM Radio advertising rates in the region. However, their rates are minuscule compared to advertising rates in major capitals such as London. The Arab Advisors Group believes that the nascent state of the private FM radio stations market in the Arab world could be one reason for the relatively low rates.
For FM radio stations, commercial advertising is important because it plays a major role in revenue generation and eventual profitability. Stations strive to gain popularity among listeners in order to attract advertisers. To do this, they must provide compelling and relevant content by producing or buying interesting programs and music or sometimes by broadcasting content without paying royalties on it as happens with quite a few stations in the Arab world. They must also price their advertisements appropriately, taking into account factors such as time of day, cost and competition.
Although Egypt has the highest average peak rate for FM radio advertising rates compared to other Arab countries, its rates are still relatively low by international standards. A 30-second spot on the UK’s Virgin London 105.8 FM, for example, costs as much as 600 pounds ($1,146) during the peak hours of 6 a.m. to 10 a.m. (on a Tuesday). The contrast becomes even more marked when Virgin Radio’s peak rate is compared to the Arab world’s regional average peak of $88.
“FM radio advertising rates are set according to a number of factors that are mainly tied to the numbers of listeners. The most important factor is the time of day. Unlike in the case of TV, the radio can be listened to in the car, at work, or at home, giving advertisers different times in which to target audiences — for example, during traffic rush hours. The peak listening time can be defined as the time of day which has the largest audience and, therefore, is associated with the highest advertising rates,” said Nadine Usta, Arab Advisors research analyst and the author of the report. “Our analysis shows that the region’s FM radio advertising rates are highest during the morning hours of 8 a.m. to 9 a.m., followed by the evening hours of 6 p.m. to 7 p.m. This implies that generally accepted peak listening times in the region are in the mornings before the majority of people go to work and for some time in the evenings when they are at home or in the car.”
