Saudi Arabia Marketing and Advertising Agency Market Size and Share Analysis - Growth Trends and Forecasts (2024-2029)

Saudi Arabia Marketing and Advertising Agency Market Size and Share Analysis - Growth Trends and Forecasts (2024-2029)

The Saudi Arabia Marketing And Advertising Agency Market size is estimated at USD 2.26 billion in 2024, and is expected to reach USD 3.18 billion by 2029, growing at a CAGR of 5.61% during the forecast period (2024-2029).

Key Highlights

• The advertising and marketing agency landscape in Saudi Arabia has evolved rapidly in the past few years, characterized mainly by the government's digital transformation initiatives, the country's young and tech-savvy population, and increasing advertising spending among businesses. The Saudi Vision 2030 initiative propels KSA toward using innovative marketing and communication strategies. Moreover, this approach creates a demand for specialized and diverse advertising and marketing services.
• In addition, the diversification of the country's economy in line with Saudi Vision 2030 coupled with growth in digitization activities across business sectors to concentrate more on digital marketing tactics, thus positively impacting the market's growth. In addition, the country's government frequently spends money on marketing to encourage investment, trade, and tourism.
• For instance, Saudi Arabia's Vision 2030 has spurred a boom in marketing and advertising initiatives to attract foreign companies. Advertising and marketing firms must adapt their campaigns to the needs and traditions of the local community while being culturally aware. Effective advertising efforts typically speak to the target audience's cultural values.
• However, a lack of awareness of the possible advantages of outsourcing marketing and advertising to agencies to handle their marketing and promotion in smaller companies challenges the market's growth. This inadequate understanding and lack of awareness contribute to under-investment in promotional activities, hampering the growth of the marketing and advertising agency market in the Kingdom of Saudi Arabia.
• Moreover, the Kingdom has one of the most significant economies in the Middle East and a technologically-educated society shifting toward digitalization. A growing number of businesses in the country are implementing digital marketing and advertising tactics, resulting in a swift digital transition.
• Furthermore, the digital transformation in industries across the Kingdom has driven the demand for marketing agencies to help businesses reach customers across multiple channels and devices, such as social media, websites, mobile apps, email, chatbots, voice assistants, and more.

Saudi Arabia Marketing And Advertising Agency Market Trends

Consumer Goods to be the Largest End-user Industry

• As the consumer goods sector expands, competition among brands intensifies. Companies in sectors like FMCG (Fast-moving Consumer Goods), retail, and e-commerce need to differentiate themselves and capture market share. Marketing and advertising agencies are crucial in helping brands develop effective strategies to stand out in a crowded marketplace.
• Full-service marketing involves services like forming a marketing strategy. Strategies often involve digital marketing to reach a border audience; consumer goods companies can utilize social media platforms, influencer marketing, and targeted online advertising to create brand awareness, drive engagement, and generate online and offline sales. Utilizing localized content and collaborating with popular local influencers can enhance the effectiveness of activations in the Kingdom of Saudi Arabia.
• In addition, the Center of Digital Entrepreneurship (CODE) plays a crucial role in fostering digital entrepreneurship and knowledge development. Over the past decade, startups in Saudi Arabia have experienced significant growth, attracting USD 3.3 billion in venture capital funding, as reported by MAGNiTT. Furthermore, there's observable growth in the FMCG and clothing brands sector, driven by the expanding consumer goods market. For example, according to Inditex, the number of outlets for the clothing brand Zara has grown from 30 in 2016 to 51 in 2024.
• As Saudi Arabia moves toward a more diversified economy, the influx of other businesses will increase consumerism in the region. As new stores and brands emerge in the region, marketing and advertising efforts will be essential for promotion and consumer acquisition, indicating that the growing consumer goods sector will propel the studied market in the region.

Riyadh to Witness Major Growth

• Riyadh, influencers significantly impact customer preferences, making influencer marketing successful. Influencers from various industries, including fashion, tourism, technology, and lifestyle, are in Riyadh. Brands use these influencers to connect with target markets.
• Moreover, the Technology and Telecom sector has witnessed a growing demand for a full-service marketing and advertising agency by the end-user industry as the technology and telecom sector is experiencing rapid growth, fueled by digital transformation, increasing internet penetration, and the increasing importance of brand identity and customer engagement.
• Again, in November 2023, the international Ad Tech audience platform iCubesWire announced that it is entering the Saudi Arabian market and has opened a new office in Riyadh. The platform announced in a new statement that the company, which has six locations worldwide, more than 350 digital specialists on staff, and partnerships with over 500 companies, is poised to expand its global footprint in various sectors.
• Moreover, by organization size, the demand for marketing and advertising agencies competitiveness, and expanding their market share, they increasingly recognize the critical role that marketing and advertising play in achieving their business objectives. Marketing and advertising agencies bring experience and knowledge in such strategies, helping large enterprises develop comprehensive strategies tailored to their unique needs and objectives.
• Furthermore, the country's advertising and marketing agency market witnessed a significant shift in the past few years, primarily characterized by smartphone and internet usage growth. For instance, according to the data from The Communications Space and Technology Commission's Saudi Internet Report 2023, the internet penetration in Saudi Arabia reached 99% in 2023. According to the report, the internet penetration rate in Saudi Arabia increased from 97.1% in 2020 to 99% in 2023.

Saudi Arabia Marketing And Advertising Agency Industry Overview

The Saudi Arabia Marketing and Advertising Agency Market is fragmented, comprising small and major players. Some include Creative Waves, Extend the Ad Network, WOW Marketing Agency, Advertising Ways Company, and The Interpublic Group of Companies Inc.

• February 2024 - Accenture Song collaborated with Droga5 to launch a global brand platform and campaign called ‘Play Life’ in Saudi Arabia. The campaign’s executions are a marked break from gigacity marketing and communications convention, which typically favor glossy ads and CGI. In contrast, ‘Play Life’ sets out to be human, relatable, and fun.
• October 2023 - VMLY&R merged with Wunderman Thompson; the combined entity is VML, a creative company. The company is equipped to support clients on creative brand growth strategies and transformation initiatives.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
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