JEDDAH: The price of advertising on billboards on top of buildings has increased dramatically in the past few weeks. While such spots used to be available for around SR80,000, the price has now increased to SR250,000.
Advertisement companies attribute the increase to the Ministry of Municipal and Rural Affairs’ decision not to issue licenses for new advertising billboards on top of rooftops. This has led to advertisers competing with each other to book existing billboards, thus raising overall prices.
Omar Al-Abdali, an account manager at Jeddah’s Full Stop Advertising Agency, said advertising is like other markets in the Kingdom. “It gets affected by supply and demand,” he said.
“I don’t believe there is a massive increase in prices. However, with the ministry’s decision not to allow new billboards on buildings, the demand for existing ones has increased,” he said. Al-Abdali believes that the increase is reasonable, as many companies are competing to advertise on a limited number of billboards.
“The high demand to place adverts on rooftops has led to competition. Demand increases when supply increases,” he added.
Nabil Attiya, the executive director of Mirrors Advertising Company, told Al-Madinah newspaper recently that the current prices fixed by the municipality are illogical. He added that the decision to ban advertisements at specific locations and on rooftops is illogical and have caused problems.
“This decision has only led to price increases. Places where advertising used to cost SR25,000 per year have now increased to SR100,000 to SR250,000. This is due to increasing competition,” said Attiya.
Hattan Hamouda, director of planning and investment at Jeddah Municipality, said that Jeddah is a tourist hub and that there is a considerable demand for advertising here. “There are new companies seeking to enter the advertising market in different areas of Jeddah. This increase in prices have had a negative impact on the market,” said Hamouda.
He added that the Ministry of Municipal and Rural Affairs’ decision to stop advertising on rooftops has contributed to increased competition.
Hamouda believes there are several reasons for this decision, the most important being safety following several accidents.
With inflation rates in the Kingdom increasing substantially, the price of actual banners have also increased.
Mustafa Farsi, director of Farsi Advertising Agency, told Al-Madinah newspaper that there is a connection between the inflation that the Kingdom is currently experiencing and increases in the price of advertising.
“I believe the economic change and global economic growth are major reasons for advertising rates to increase, and the rise in prices,” said Farsi, adding that the new regulations and decisions by the ministry have contributed in rising prices.
