Business | Media and Marketing

Video ads on digital media to queer pitch more

Social media giants home in on video ads and could prove costly for marketers

  • By Manoj Nair Associate Editor
  • Published: 13:05 December 31, 2013
  • Gulf News

Dubai: It has all the makings to be a year of plenty for UAE’s advertisers as their digital advertising options multiply. A new front is opening up for them as social media giants finetune their video ad platforms to go along with the already prominent static displays.

What it means is that brand marketers have to come up with a viable digital video gameplan even as they still work their way through the broader digital adscape. While they go about it, prospects are they will be paying more for a digital presence this year. (Facebook will be debuting its video ads in coming weeks and local ad agency sources believe it will have an immediate sync with brand marketing campaigns.)

“On average, the year-on-year [increase in tariffs] is around 35 per cent for the dominant portals in the region — campaigns at the moment is around $10,000-$15,000” said Wisam Edgheim, director for video and premium reach at ikoo, one of the region’s bigger online advertising networks. “As Internet penetration increases throughout Mena, digital ad spend will increase due to an expansion/shift in audiences.

“Dollar spend will increase gradually as agencies and ad networks continue to set up their ‘real-time bidding’ systems. On this front, charges will be lower than usual because the bidding concept will be adopted on a larger scale.

“On the other hand, video advertising and premium reach will continue to grow separately.”

Significant premium

Even though still in its initial phase, video ads on popular social media platforms will carry a significant premium. It is unlikely that price differentials will occur between what they cost in the US, for instance, and what it might be in the UAE.

As such, social media advertising (worldwide) is growing at 28 per cent a year, according to ZenithOptimedia estimates. “Advertisers are now recognising the value of social media for brand building and purchase consideration purposes,” the media agency said in a recent report. “Measurement agencies are investing in research that should measure consumers’ exposure to traditional display ads more accurately, and track their exposure to video ads across desktop computers, tablets and television screens.”

But there are market sources who believe superimposing digital ad rates in the West to these markets could be counterproductive. “By and large, rates are lower compared to the UK and US and rate comparisons at this point might not be a fair judgment of regional digital growth,” said Rajeev Khanna, member of the board at IAA UAE, the industry grouping.

“It is necessary to take into account the scale of traffic in Western countries compared to some of the developing economies in the region. Besides, most western ad markets have had a head start in the digital field.

“This is why rates for digital platforms this year will be more of corrections — this media is still in a nascent stage in the region and therefore some existing rates are not quite relevant. I expect some clean-up wherein media buying companies are going to pose some serious questions on issues like authenticity of sites and the quality of traffic they garner, i.e., are they quality news providers or are they general aggregators of content.”

Guess there won’t be any easy solutions when it comes to deciding what an optimum digital strategy should be.

Digital advertising stretches the possibilities

* The Internet’s share of global advertising increased by 17 percentage points between 2003 to 2013, according to ZenithOptimedia.

* It will have grown 15.8 per cent by end 2013 and the forecast is for an average of 15 per cent annual growth between 2014 to 2016.

* Mobile advertising is growing seven times faster than desktop Internet. ZenithOptimedia forecasts mobile ads to grow an average of 50 per cent a year between 2013 and 2016. At the same time, desktop Internet advertising would grow an average of 7 per cent annually.

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