Market Trends of Middle East Industrying And Advertising Agency Market
Small and Medium Enterprises to Witness Significant Growth
- SMEs are enterprises that have an employee size of less than 250 employees and annual revenue of less than SAR 200 million (~USD 53.31 million). Increased advertisement spending across end-use industry verticals is expected to drive the demand for the marketing and advertising agencies market in Saudi Arabia. An increase in ad investment owing to the rising trends of video and mobile ads is a significant contributor to the development of marketing and advertising agencies in Saudi Arabia.
- The rise in social media platforms is essential in shaping consumer behavior in the country. Consumers engage with brands and influencers across social media platforms for product research, reviews, and recommendations. As a result, adapting to evolving consumer preferences is essential for market players to gain a competitive edge and meet customers' changing needs.
- Small- and medium-sized enterprises (SMEs) in Saudi Arabia are embracing digital transformation and innovative technology. Emerging technologies such as AI, blockchain, and the Internet of Things (IoT) enhance the SME's business operations. Further, digital technologies have revolutionized the advertising landscape in the country.
- According to the Small and Medium Enterprises General Authority (Monsha'at) report, Small- and medium-sized enterprises in the Kingdom of Saudi Arabia reflected a 4.8% surge in 2023 compared to the final quarter of 2022. The report further revealed that 88,858 new businesses were launched across the country in the first quarter of 2023. Riyadh was home to 41.4%, followed by Makkah at 18.1%, the Eastern Province at 11.1%, and the other cities for 28.6% of the total SMEs in Saudi Arabia. This is anticipated to spur new growth across critical sectors such as tourism, e-commerce, retail, food and beverage, and fintech. The growing e-commerce sales are expected to boost the market studied.
- The SME sector aims to contribute 35% of the gross domestic product by 2030 as part of the Vision 2030 goals. Vision 2030 elevates the country's advertising sector, making it a vital component of the cultural, economic, and social transformation through a unique partnership between public and private investments and agencies. The advertising sector in Saudi Arabia is witnessing an exponential rise in growth and demand within both local and global agencies to converge and invest in expanding their capacity. This surge has also led to the emergence of numerous independent marketing and advertising agencies in the country.
- Vision 2030 also aims to reduce Saudi Arabia's over-dependence on oil as the main economic driver. As a result of these reforms, Saudi Arabia boasts the highest annual economic growth rate and possesses a young demographic that prefers digital technology and social media. Therefore, marketing and advertising enterprises and startups have access to limitless opportunities and growth potential. Additionally, to boost entrepreneurship, the Saudi Arabian Ministry of Commerce issued 314,500 commercial registrations for firms and establishments in 2022. Riyadh led the most commercial registrations, making it the city with the most emerging entrepreneurs in the business landscape, most of whom operate within the advertising sector.
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Riyadh to Witness Major Growth
- Saudi Arabia's capital and largest city, Riyadh, is leading the nation's digital revolution. The marketing and advertising industry will be greatly impacted by Crown Prince Mohammed bin Salman's Saudi Vision 2030 plan, which intends to diversify the economy.
- Moreover, Saudi Arabia, which includes Riyadh, has one of the highest rates of social media adoption worldwide. Because of their enormous popularity, platforms like Snapchat, Instagram, Twitter, and YouTube are essential for marketing campaigns.
- In Riyadh, influencers have a big impact on customer preferences, making influencer marketing quite successful. Influencers from a variety of industries, including fashion, tourism, technology, and lifestyle, may be found in Riyadh. These influencers are used by brands to establish a connection with particular target markets. For instance, influencers such as Abdulaziz Baz have become quite well-known in Riyadh. Brands work with him on promotional initiatives, particularly in the fashion and lifestyle domains. For example, a fashion firm with headquarters in Riyadh elaborates with Abdulaziz Baz to present its most recent collection, which would reach a large number of prospective buyers.
- Due to the diverse population in Riyadh, marketing agencies must take cultural sensitivity into account while creating campaigns. In order to connect with the intended audience, advertisements frequently incorporate regional traditions, values, and rituals. Companies that are cognizant of in respectful of Saudi culture have a greater chance of establishing a strong rapport with Riyadh consumers. For instance, UNDP indicate that by 2030, the population of Riyadh will reach 7.9 million residents.
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