By Taher Jawadwala, Research Manager, MEC MENA
The marketing industry in GCC is going through an interesting phase. At one end, the uncertain macro-economic climate is making it difficult to envision the path ahead. At the other end, the emergence & adoption of new technologies is fueling business engines for a better performance. Led by uncertainties, the advertisers are shifting to lower gears with a focus on generating maximum torque (performance) at lower speeds (spends). 2016, was the first year post 2009, where there was a drop in advertising investments in the region. (Fig 1)
Source: Ipsos Statex; OOX (estimated to gross); indicated figures are gross rate card spends.
While TV continues to dominate the media investment pie by capturing 60% of the share (Fig 2), there is increased focus on digital media where investments are increasing rapidly at a rate of 15-20% yearly. With outdoor & radio media maintaining their shares, print media is facing the heat with a consistent decline in its share of media investments.
Micro analysis of spending trends along with the highlights in the past couple of years clearly lays down some key trends that will impact the advertisers approach and media investments.
Surviving the VideoQuake; effectively and efficiently
Consumers in the region are spending 1/5th of their wake time watching video content on a daily basis. And this content is not only served to them on TV, they are increasingly accessing video content through Social Media and VOD platforms, which are flourishing in the region. We are not expecting, we are already experiencing a videoquake in the region.
While TV will continue to dominate this video heavy market, marketers need to adapt their TV planning approach to a Video planning approach. This approach tends to be – “effective” by resonating well with the audiences and “efficient” by reaching wider audiences at lower/similar costs.
However, marketers need to consider some crucial elements to win the Video Planning approach. First, the content needs to be adapted considering the platform dynamics to generate higher consumer engagement. And second, in the absence of an industry wide single data source that captures consumers offline + online media consumption behavior, marketers need to ensure that a proper measurement framework is in place that helps them plan, measure and optimize spending on this Video approach.
Striving in the digital evolution
Consumers in the region are more digital savvy than ever spending around 2 hours on the internet every day. However, the share of investments on Digital media is below its consumption levels (Fig 3). Hence in the near future, we will continue to witness an increasing focus on digital media investments.
Source: Ipsos Statex, E marketer, TGI PARC; *consumption is a function of reach and time spent
Numbers might not add up to 100 due to decimal rounding
Quick Fact: Digital Penetration in GCC is at 74% which is much higher than Global Average of 49% and equals to Europe.
Digital Media will continue to transform 3 key areas of marketing: Speed, Reach & Relevance. To benefit more from this continuing transformation, it’s essential for marketers to be equipped with the right tools and measures to overcome new challenges like view-ability, fraud impressions and brand safety.
Leveraging the big potential of small screens (smartphone)
While GCC has one of the hightest Smartphone penetration rates across the globe, mobile advertsing* spends in the region is below its actual potential. Investments on mobile advertising just accounts for 16% of the total digital spending. This is due to a weak mobile infrastructure – 1) lack of smart devices friendly sites 2) Lack in usage of Arabic language content on the mobile friendly sites.
As we move towards striving in the digital era, it’s crucial for advertisers to utilize the fullest potential of smartphones, which is today the consumer’s primary digital device (Fig 4) and also drives business results.
|% Primary device to access the Internet||KSA||UAE||Global|
Source: Global Web Index 2016
*Mobile Advertising excludes investments on Social Media
79% of the consumers in GCC used their Smartphones to learn more about the product they wanted to buy
Consumers in GCC are 6 times more likely to “click through” to advertisers’ websites on their smart device compared to US
E-commerce explosion to boost investments on performance marketing
GCC e-commerce is on the cusp of becoming the world’s fastest growing market. As per AT Kearney, e-commerce industry is set to grow from $5.4Bn in 2015 to $20Bn in 2020 (Fig 5).
There are exciting recent announcements in this sphere with Souq.com getting acquired by Amazon and the soon launching regional portal Noon.com.
This growth calls for a strong support from performance driven marketing that will help the e-tailers drive incremental traffic, optimize conversions and maximize revenues.
Hence investments are bound to increase on digital platforms using performance driven objectives like generating quality leads and conversions (buying on CPA, CPL etc) rather than traditional reach objectives (buying on CPM). Performance marketing is a specialty in itself and e-tailers along with their media partners will need to embrace it in order to survive and grow in this e-commerce explosion.
Use of new technologies to better understand & deliver immersive content
Today’s consumers are consuming content across multiple screens and demanding seamless and immersive experiences across these screens. 2016 was a breakthrough year for new technologies; right from Virtual Reality (Oculus Rift, HTC Vive and Playstation VR hitting the market place) to Augmented Reality (Pokemon Go that set App Store records) to Machine Artificial Intelligence (major breakthroughs & improvements in speech recognition, natural language processing and machine learning).
All these technologies led to creation of more immersive content that the consumers can consume on demand anywhere.
At the same time, application of AI started helping marketers make sense out of the available data to deliver more relevant communication to the audiences in a contextually relevant environment.
In the near future, marketers will be looking forward to capitalize on these technology trends by investing in the right tech, infrastructure and skills that helps them deliver clever data driven executions that drives higher business results.
To conclude, we are all set to witness more exciting and action packed path ahead. With strong fundamentals in place with government’s futuristic initiatives and a young optimistic population, we can expect a much stronger and opportunistic market in the future.
To take full advantage of the future opportunity, it’s essential for marketers to gear up right with a clear vision and ability to adapt in this ever-evolving marketing arena.
The views expressed by the author are his own and do not necessarily represent those of Gulf Marketing Review.