Digital Ad Spending in Iran Accounts for More Than $53M

Iran’s online advertising landscape has seen tremendous changes in the recent years. Adro, an Iranian ad exchange platform recently proclaimed that the digital ad spending in Iran is speculated to be more than $53 million.

Back in 1994, there were only about 30 million people using the internet and at that time Wired magazine ran the world’s first banner ad on its website. Years later digital advertisement took the world by the storm and became an effective medium for advertising compared to television, radio and billboards. The recent developments in digital advertising have shifted the focus from simple displaying ads to new multimedia and social media platforms, and as a result, it has brought more revenue to this sector. Today with 45%, digital advertising has the major share in the global time spent on ads.

Adapting to new technologies

Despite the limits, Iranians are known to be fast adopters of new technologies and innovative services. In 1993 Iran became the second country in the Middle East to get connected to the Internet. In 2002, Persianblog and Blogsky became the first free blog services for the Persian speaking community and started a revolution in web content creation by Iranian bloggers. Through these blog platforms, many Iranians found a voice for themselves and some started to make revenue off their blogs. It was during those years that Iranians started to realize the potential of the online world and eventually started to discover new business ideas. As a result, many Iranian companies started to shape over the years and thrived from the revenue they made from online advertisements.

In the past years even though many Iranian websites and blogs started to emerge, a large portion of them failed due to a lack of a proper business model, marketing schemes and effective advertisements. But with the recent developments in Iran’s internet and mobile infrastructure, a new wave of online businesses started to appear again.

Today Internet penetration in Iran has reached to 52% thanks to the new developments by mobile operating networks. A recent study by the Statistical Center of Iran also indicates that 13.5 million households (55.5%) have access to the internet. There are around 40 million smartphones in the country and statistics show that mobile operators have 28 million users who access the internet through these operators.

As a result, online platforms and services have become more highlighted in the lives of Iranians which would eventually have a positive impact on the digital advertising ecosystem.

Search engine advertising and social media ads

Despite the financial sanctions, many Iranian online businesses find their ways to use Google Adwords to promote themselves. Of course this does not happen easily and officially, but there are third party companies that take care of this matter. Not to mention that websites with .IR domain names still can’t register themselves on Google Adwords for advertisements.

It’s pretty common these days to see banner ads from Iranian companies that are using Google’s platform for advertisements. Even though Iranians have to use VPN services to bypass websites that are blocked inside the country, they’re still able to see targeted ads with Persian letters on websites such as YouTube. In the past two years, a few of Iranian companies spent heavy budgets to advertise on Google Adwords.

In terms of Social media platforms, the situation is much different in Iran. According to eMarketer, Facebook and Twitter are predicted to take 33% of the global display ad spending market share by 2017. In Iran, these two services are blocked so users are guided to other platforms such as Instagram and Telegram.

Although Instagram brought in advertising to its platform a couple of months ago, we still haven’t witnessed any targeted ads by an Iranian company. These companies still prefer to work with Instagram influencers and celebrities to promote their business.

Despite Telegram’s main objective as a messaging app, it’s now playing the role of a social media platform for Iranians. Thousands of groups and channels on Telegram are providing various types of content for their users and have been able to monetize their work. We predict that Telegram channels have generated $23.3 million in revenue in 2016. This could be a challenge for Iran’s AdTech industry since there’s no reference price, analytics or measurements for the ad’s effectiveness and accuracy. You can read more about Telegram channel’s revenue in Iran on this post.

Digital Ad Spending in Iran

In 2015 total digital ad spending in Iran was $1.57 billion with 2.15% digital. In 2016, digital advertising’s share is expected to increase from 2.15% to 3.5% of the total advertising, which indicates 62% growth. Also, spending on digital advertising accounts for more than $53 millions. By 2020, Digital Advertising in the country will account for more than 20% of the overall advertising share. Note that these numbers are for banner and display ads.

The AdTech industry in Iran still has a long road ahead, but it’s progressing with a fast pace. You can download Iran AdTech Overview white paper with sponsorship & data partnership of Adro AdExchange from this link. Adro is Iran’s first AdExchange platform, opening Iran’s online advertising landscape to the world.