Dubai
We have witnessed significant growth in internet advertising across the Middle East and Africa (MEA) over recent years as companies increasingly look for alternatives to the traditional channels.
In 2013 alone, the amount spent on internet advertising across the region touched $1.46 billion. As an overall proportion of advertising spend, this only represents 4.6 per cent of the total sum, but this figure has been growing steadily year on year. In 2009, internet spending accounted for just 2.5 per cent of the total amount, but by 2018 we expect this figure to reach almost 10 per cent.
As consumers, we are increasingly turning our attention to the internet, and the digital economy is changing the very way we communicate on a daily basis. The adoption of mobile devices and tablets is growing, high-speed networks are becoming more prevalent, and the availability of WiFi access is increasing, as is its penetration within our communities. We are spending more time online and increasingly view the internet not just as a source of information, but as an entertainment and social networking hub. All of this is forcing advertisers to look at different ways and means for capturing our attention while we are online.
There is no denying the appeal of and preference for traditional advertising media channels such as television and radio. However, as consumer lifestyles become increasingly entwined with technology, and as enterprises continue to push ICT boundaries and adopt new working models, Internet advertising will continue to grow, slowly eroding the preference for traditional channels and consequently claiming a higher proportion of market share. This will spurn new advertising initiatives and methods that were simply not possible over traditional media, with targeted, location-based advertisements that are aligned to your particular preferences, likes, and dislikes becoming increasingly commonplace.
internet advertising will foster innovation and create significant opportunities for smaller, niche-based organisations to reach a much larger audience than ever before.
Multichannel solutions are becoming available with a broadening array of cost-effective opportunities that enable small and medium-sized businesses (SMBs) to advertise on a scale that was once only possible for larger organisations armed with huge advertising budgets. This is especially appealing in markets such as MEA, where SMBs make up more than 90 per cent of all private-sector entities and typically lack the financial resources to engage leading advertising agencies.
Internet advertising can come in a number of guises, so it is important that advertisers are fully cognisant of the optimum methods when considering an Internet-based approach. Campaigns can be targeted primarily just online or over a mobile device, or a combination of both. The data for the MEA region shows online searches expanding at a compound annual growth rate (CAGR) of 28.7 per cent over the 2013—18 period, while searches executed over a mobile device are forecast to show a CAGR of 59.5 per cent over the same timeframe.
Given these developments, we expect more mature markets such as the UAE to see a greater proportion spent on mobile internet advertising as the adoption and frequent usage of smart devices continues to play an increasingly prominent role in our daily lives.
Internet advertising is also not just about the standard devices that we now take for granted, such as laptops, tablets, and smart devices; we are also witnessing new experiences called multiscreen. Online TV, IPTV, and video on demand are all new forms of media consumption that are accessing the Internet and opening up potential new channels, as well as a greater range and diversity of customers for the advertisers to target.
A further driver of the shift in advertising spend in the UAE is the country’s relatively young population. The UAE’s mean average age of 20—28 years translates into a populace that exhibits a strong degree of acceptance toward technology and Internet use, and with that comes a growing penchant for online gaming. This sizeable community of gamers spend a considerable amount of time online with their friends and peers, opening up a further avenue for advertisers to push their products and services. Indeed, many free downloadable games are funded purely through advertising revenue.
The overall improvement in economic activity across the region has also resulted in many people seeing their disposable incomes rise.
With telecom operators continuing to invest throughout MEA, we are not only witnessing growth in fixed Internet access, but also in terms of mobile internet usage. Enterprises and consumers alike are enjoying access to cheaper and more competitive data plans, improved connectivity, and faster speeds, all of which are fuelling this growth.
It has long been established that as per capita income rises, so does spending on advertising. The UAE is fortunate, along with numerous other countries in MEA, to be experiencing rising per capita income, and organisations are inevitably reassessing the strategies they employ to push their products and services to consumers with greater purchasing power. So with a positive economic outlook and continuing growth in the high-speed internet access necessary for capturing this opportunity, overall spending on advertising has naturally been rising, and the Internet is increasingly is becoming the medium of choice.
The columnist is group vice-president and regional managing director for the Middle East, Africa, and Turkey at global ICT market intelligence and advisory firm International Data Corporation (IDC).
