Time and again, history has proved that the greater the uncertainty in the global politico-economic system, the greater the apprehension that consumers and businesses feel about the future. The globalised world, as we know it, is changing. And it is moving towards a new world order where protectionism seems to be coming back to rule the roost.
With the global economy becoming more and more unpredictable with each passing day, economists, foreign policy gurus and marketers worldwide are scratching their heads to make sense of what’s happening.
Just until the first half of 2016 and the year before, what kept most analysts baffled was the crude oil price movement and whether OPEC would cut back on oil production. Fast-forward to the second half of 2016 and two unprecedented, landmark events changed the focus of the dialogue – the UK’s decision to exit the European Union and the rise of Donald Trump from an unlikely Republican presidential candidate to actually becoming the President-Elect – now President – of the USA.
Of course, this doesn’t mean oil isn’t a talking point any more: it still very much is, but now the concern over oil prices has been largely subsumed, so to say, by even bigger uncertainties that will have global ramifications. Coupled with Brexit and Trump’s victory is a third factor – China’s slowdown – that has accentuated uncertainties in the global economy.
So what does all of this mean for brands and marketers in the Middle East? Will 2017 will be another complicated, challenging year for the Middle East and GCC marketers, forcing them to mercilessly slash their advertising spend? If so, how will regional marketers face this ‘new normal’? Can marketers in the region hold steady despite global and regional headwinds?
According to a report titled This Year Next Year: Worldwide Media And Marketing Forecast, by the global media investment management company, GroupM, “The Trump victory has raised uncertainty. This means more hesitation in important decisions in the short-term, by people, governments and corporates. Advertising spend will likely be negatively impacted until there is clarity on policy. Brexit, or more accurately, the process leading to this, has had a discernible effect on what CFOs and financial markets think about the future, but, as yet, no discernible effect on advertising investment.”
In order to get a clearer picture, Gulf Marketing Review asked marketers and officials questions such as: what are the biggest challenges for marketers in the GCC and the Middle East in 2017? How are they preparing themselves to face these challenges? Are they going to change their marketing strategy in 2017 from what it was in 2016? If yes, what would be their focus going forward?
We present their insights below, categorised according to the industry they are in and arranged in alphabetical order.
Category: Agencies & PR
Shying away from bold moves. Uncertainty is never a positive phase and marketers are venturing into 2017 with a lot of apprehension. Budgets are being kept floating, with a large portion held for potential cuts, while many marketers are betting on safe and guaranteed revenues.
We have seen a lot of marketers shying away from bold launches and they are being conservative in their revenue projections, as well as in their media spend. Everyone seems to be in an observation phase, planning for [something] evil. The first quarter will be very pivotal and would be affecting the remaining months.
Oil revenue drop is the main challenge. Although the numerous events of 2016 had a large impact on the GCC market, the main challenge remains the drop in the oil export revenue. To see the glass as half-full, these tighter economies are forcing governments to become more efficient and more diversified. The same applies to marketers. Optimising processes and structures and generating productivity are the name of the game.
A challenging year, again. The overall projections seem to be pessimistic, even more with OPEC’s pressure for production cuts and the downward trend in oil revenues. The dollar peg, the surrounding instability, the contribution of the war, as well as the subsidies, are becoming more and more expensive for GCC governments. They are heading in the right direction, working more with the private sector to create jobs and working to empower women and youth. It would definitely be a challenging year that would teach us lessons about optimising budgets and resources.
Category: Agencies & PR
Get comfortable with emotion. What marketers have learnt last year through Brexit and Trump’s victory is that we need to devise strategies with human emotion at their core. Looking at these two winning campaigns, what linked the shock victories together was emotion, not facts and stats. Both campaigns played into the emotion of society and marketers need to get a lot more comfortable with this, in order to approach tactics from the perspective of: what do we want our audience to feel?
Keeping this front of mind, along with the wider business objectives, will help to adjust marketing strategies in a way that recognises the human factor in communications for brands.
Blend human touch with automated insight. With the proliferation of analytics tools and insights dictating the way campaigns should be done, a real challenge will be to avoid over-reliance on automated research. Brands forgetting to blend the human touch with automated insight will sometimes be led down the wrong path and fail.
At the same time, readership, views and even engagement statistics will fade into the background as communications programmes start and finish with one question in mind: what emotion are we generating with this campaign? Emotive and behavioural technological advances will help feed that information back to brands. Therefore, we can expect to see more micro-campaigns launched by brands looking to trigger specific emotive responses to their content. Short, sharp bursts of creative activity in response to changes in mood and behaviour will become the norm.
Agencies with traditional thinking will struggle. As marketers, we need to align our offering to what clients need today and evolve the way marketing professionals think about their role and their profession, to ensure we stay ahead of the curve. Agencies that still think very traditionally will struggle to survive in the next one or two years.
Our focus in the coming year is to further strengthen our digital strategy and capabilities, to be able to enhance the support we deliver for our clients’ business objectives and offer them integrated communication campaigns.
Technology is our priority. Marketers in the GCC will find promoting their brands an increasingly competitive sport, as reduced opportunities will call for ever more targeted and confidence-building tactics among customers.
Providing excellent and reliable service and continuing to market effectively will be of utmost importance, as securing loyal customers is a key strategy for surviving economic uncertainty. Maintaining the strength of our brand and taking a long-term view is a key strategy for Arabian Automobiles in 2017.
Oil price fluctuation is a challenge. One of the main challenges faced is the fluctuation of oil prices that continues to have impact on various sectors of the GCC economies and influences government spending. Combined with this is the more prudent approach of GCC businesses to regional expansion.
On the consumer front, this has resulted in a shift towards more conservative spending behaviours, with customers less willing to commit to large purchases and monthly instalments. On the business front, it has led to a number of changes.
Arabian Automobiles plans to remain ahead of the curve, embracing innovation and technological advancements to enhance their presence on multiple social media platforms and cater to each accordingly – for example, conversations on Twitter, while engaging live with audiences on Facebook.
The focus going forward will be on keeping up with the speed at which digital media is changing and progressing to make sure we have the right campaigns, communication plans and value propositions to meet customers’ expectations while communicating through the effective mix.
Embracing technology. Our marketing strategy has to evolve to address the changes in consumers’ behaviours and media consumption, specifically digital media. The priorities of our marketing strategy in 2017 are on technology, while integrating the company’s ERP, CRM and software interface with our sales team to establish a seamless experience for our customers.
Category: Online and Money Transfer
Shift in focus to more accountable media. The challenges for 2017 are now more understood, so marketers can plan accordingly. We will see a shift in focus to more accountable and measurable media, which will benefit digital and particularly mobile media, where the link between brand metrics, sales and activity can be more readily measured and understood.
More immersive brand experiences. Budgetary constraints will drive a new wave of innovation. Increasingly, analytics will drive more insightful and bespoke targeted communications.
This will drive more immersive and engaging brand experiences. Innovations in measurement will give marketers the correlation between activity and brand effect or between activity and combined online or offline sales.
A new wave of innovation. Many marketers are now adding technology solution providers to their communication agency roster to assist with analysing and automating actions for increased efficiency. Marketers are increasingly looking to digital channels to direct more relevant and targeted messages to consumers throughout their purchase decision journey.
Marketers are starting to actively look at link their marketing investments to customer value and store visits, online and offline. Many of them are looking at more immersive and engaging formats, such as 360 video, Canvas-style immersive ads and even VR or AR (virtual or augmented reality).
Category: Online and Money Transfer
Mobile is the primary channel. One of the main challenges currently facing marketers in the region is the shift to mobile app-first marketing. Not only are larger brands focusing on promoting their apps over websites or mobile websites, there has also been exciting growth in local entrepreneurship and app only start-ups.
This has left marketers with a new set of challenges in acquiring app users and communicating with their users, primarily via mobile devices.
Focus to remain on mobile. Increasingly over the past two years, our efforts and budgets have shifted towards mobile, as nearly 60 per cent of our traffic comes through our mobile site and apps. In 2017, our focus remains heavily on mobile – both in promoting our mobile app, as well as using mobile as the main platform to communicate with our audiences.
Because the mobile device is the primary channel for the consumption of content, we are adapting the content we create for our users into bite-size, digestible snippets. Also, we are finding that static content, such as infographics, is losing traction and so we are focusing more on infotainment (information and entertainment combined). This includes video, animation and, more recently, virtual reality (VR).
VR gives the edge. VR’s experiential way of telling stories is definitely giving brands an edge; it stands out above the noise in terms of capturing an audience’s attention. If predictions are correct, we are looking at 200 million VR headsets being sold worldwide by 2020. So, we expect VR to become a standard way of consuming content.
Category: Online and Money Transfer
Shift from TV to social media. The uncertainties in the global economy could certainly affect marketing budgets and, thereby, impact spends. With the ever-increasing focus on marketing RoI, it will be a tightrope walk to balance the spend required to steadily grow business.
This also means that there could be more focus on or a shift to earned and owned channels. In addition to cost efficiencies, the necessary reach and impact can be attained with a shift from TV to a content-led social media approach.
There are always emerging trends in the market. Traditional advertising formats are no longer the best options. What we see today is a blended approach involving content, technology and experiences. Brands also need to understand what works for them in terms of the impact of the new tools and accordingly choose their approach. Consumers today are more aware, better informed and better networked than ever before.
One of the biggest developments today is the integral role played by a mobile phone in a consumer’s everyday life. The challenge for brands is to effectively utilise newer tools to reach out to customers and communicate with them. With new digital technologies, marketers can now specifically target their existing and potential customer base.
Data usage is a challenge. Customers leave a trail online, which can be used to analyse their purchasing behaviour, which can prove extremely beneficial while targeting them. One of the biggest challenges in this will be the use of data and analytics. Data has multiple uses, not just to serve a MIS (management information system). Insights derived from data can be used for predictive modelling, in addition to in-depth analysis of customers, micro segmentations, retention and future acquisitions.
The customer’s attention span is constantly shrinking. What got us their attention earlier does not necessarily work anymore. Brands need to be sure of what is most effective for them. One of the strengths that we as a company have is a flexible and scalable marketing strategy.
Category: Real Estate
Find innovative ways to engage youth. Dubai has always functioned as an open economy and the global changes of significance will no doubt influence the marketing outreach of companies here too. However, we do not see any remarkable shift in our marketing strategy for 2017 due to extraneous factors.
We continue to gain significant international investor interest in our properties, while our malls and hospitality assets record significant growth, led by the robust performance of Dubai’s economy, especially its aviation and tourism sectors.
The significant challenge before regional marketers is to find innovative ways to engage the tech-savvy youth population. That is why Emaar is focusing heavily on our digital strategy to strengthen our customer service across all touchpoints.
Strengthen digital outreach. We will continue to use traditional marketing channels, but will further strengthen our digital outreach initiatives. We are now moving into the next era of growth, centred on the new digital ecosystem that is shaping customer outlook and preferences.
We believe that in today’s fast-evolving world, organisations that lead are the ones that can automate at scale and are agile and highly responsive to the needs of customers. Our strategy is to create long-term value through tech-driven business and enterprise systems.
We will continue to create premium real estate assets, such as our launches in Dubai Creek Harbour, one of the largest developments in the world. We will also strengthen our hospitality business with new hotel openings and the malls business through the ongoing expansion of The Dubai Mall.
Positive outlook for 2017. The decision of OPEC and non-OPEC members to cut production has reflected gains in oil price.
This will further drive local economies, which will reflect positively on businesses. Our outlook for 2017 is positive, especially with the brisk economic activity associated with the preparations for Expo 2020.
Category: Real Estate
Focus on new opportunities. Perspective is very important when planning for the long run. When faced with uncertain times, marketers need to focus on the new opportunities that are available to them. On the one hand, people are losing jobs, but, at the same time, the need for safety and security goes up. In Dubai, this has positively impacted the sale of affordable housing projects.
Similarly, recent advancements in technology have opened up many new communication channels with clients, by way of devices, applications and networks, and it is the duty of the savvy marketer to be abreast of the changes and take maximum advantage of the opportunities available.
Tough task ahead. In cautious times, marketing budgets shrink rapidly. However, emerging media has an ever-increasing array of options available. Marketers have a tough task ahead if they need to be on top of all of the various media available to them nowadays. Choosing the right communication platform today has become almost as important as the message itself.
Mass media options no longer work in the age of hyper targeting. Marketers are having to revisit the basics again every few months as a new platform gains prominence and captures everyone’s interest, before waning and giving way to the next new thing.
The marketer needs to move swiftly, assess the new media as they emerge and place their bets early on in order to maximise returns on their expenditure.
We will be focusing on improving our visibility and customer touchpoints. This year could see the recovery of the property and oil sectors, and this year will be marked by a higher level of hiring, construction and marketing activity.
Category: Retail & Consumer Goods
Retaining consumer loyalty is a huge challenge. In times of economic uncertainty, we expect the commoditisation of certain categories and with it comes the shift in consumer attention from brand to product. In these times, it’s important to continue to invest in and deliver brands of the highest quality, as well as to ensure the brand proposition continues to connect with it’s consumers in the most engaging way.
Therefore, the biggest challenge will be building and retaining consumer loyalty that reaches the consumer in the right way through the new media channels, i.e., digital, as our consumers are expecting continuous, up-to-date news and engagement through social media. In preparation for these challenges, there has been a clear and significant focus by all on increasing digital capabilities within and across other industries, as well as continuous consumer connects to ensure the plans are built on consumer needs.
Consumer habits are changing. With the slowdown we are seeing in the economy, we have seen a clear change in consumer habits when it comes to both purchasing and consumption; from the value spent across different sectors, as well as a change in pack-size purchases within commodities and FMCG products.
Shoppers are therefore much more likely to think before they buy and look for better value offers, both in-store and through online channels. With that in mind, we still do not expect people to compromise on the quality of their personal care products – they will continue to buy the brands they know and trust. In 2017, our key focus will continue to be providing our consumers with high-quality products, which are clearly differentiated and relevant to our consumers. We will continue to build our brands, starting with the consumer insight, and will ensure we deliver an engaging consumer journey through digital channels as well as the well-known traditional channels.
Category: Retail & Consumer Goods
‘One-size-fits-all’ approach won’t work. I would add the recent demonetisation drive of India to these events, apart from the regional turmoil caused by the civil wars, which has also affected the sentiment of the local population. The consequence is the region witnessing a slowdown in spending across industries and segments, and this poses challenges to marketers. The key is to look beyond data and analytics and understand the current drivers of behaviour – specifically, purchase – and tailor marketing strategies accordingly. The ‘one-size-fits-all’ approach will not work, as the need of the hour will be personalised marketing.
Understanding customer psychographics is key. The single biggest challenge is to understand the changes in customer psychographics and purchase patterns. In a multi-cultural market such as the UAE, segmentation and stratification of communication will be complex. The other challenge in this buyer’s market is to create reasons to spend that matter in today’s climate. Old methods and incentives are not working anymore.
Data science and business analytics are some of the best ways to face these multi-layered challenges. It is important for marketers to activate the digital suite of tools available and create integrated programmes that will inspire customers to make the purchase decision in one’s brand favour. CRM and CVM (customer value management) will be key drivers, which will bring maximum ROI in these times.
Category: Retail & Consumer Goods
We have to stay relevant to our customers. All brands aim to grow and, in order to do that, we have to stay relevant to our customers. We at Carrefour monitor customers’ behaviour and their buying patterns by looking at different variables, including consumption, average basket size, average transaction size, and the size of the store footfall and the queues, to be able to tailor future promotions that are meaningful to our customers and, ultimately, optimise the store’s performance and organise it to fulfil our customers’ demand.
Hard to acquire customers. Different brands have different marketing calendars, which include offers and promotions for their diversified clientele. For example, in addition to our daily offers and deals, we at Carrefour carry out special promotions on special calendar events, such as National Day, Ramadan and others.
Another thing we do is to constantly improve our customer service to drive and inspire loyalty. This is achieved by training our staff to engage with customers in a friendly and pleasant manner, give them more information on the products and have a better understanding of their needs.
We strive to present value for money and the quality our customers are looking for. This is our main focus at Carrefour throughout the year, not only during special promotions or events. One of the most important aspects for businesses is to build customers’ loyalty. With the competitive environment, it is becoming very hard to acquire customers and it can be harder to retain them. Also, with the advancement in technology, customers have more information and more choices. At Carrefour, we have introduced the MyClub loyalty card for our UAE customers, which enables customers to benefit from a points scheme by offering personalised offers and additional rewards for high spenders. In return, this also helps us in the evaluation process and increases our awareness of trends and behaviours, so we are able to satisfy them.
UAE initiatives to attract more investors. Economic forecasts, most recently a report by IMF, predicted a 2.5 per cent GDP growth in the GCC. Despite the economic challenges, the decline in oil price and the global slowdown, we see that GCC governments are implementing strategies and launching initiatives to diversify the economy.
Category: Retail & Consumer Goods
GCC consumers seek value for money. We believe that, in the current climate, ‘value for money’ is increasingly what today’s GCC consumer will be looking for and we are well-placed to meet that demand.
So, while our media mix may change, what we say when communicating with our customers will, in essence, remain the same. We will continue to re-emphasise our value credentials and to remind our customers of our incredible fashionability and affordability.
Marketing budgets to face scrutiny. For many, marketing budgets will inevitably face greater scrutiny in 2017 as businesses feel more pressure. So, they will need to focus even more sharply on where and on what money is invested. The biggest challenge for marketers is how they can help to underpin sales and grow traffic under these circumstances.
The different channels we use, and how we use them, will be critical. Marketers should expect to be regularly challenged on the marketing and media mixes they choose. ‘More of the same’ will not be good enough in 2017.
Shift towards digital marketing. We believe that we should concentrate more on specific customer types for specific promotions and therefore, we will spend more time working on the segmentation and clustering of our customer database, to better-engage the more than seven million members we have in our RT Rewards loyalty scheme.
The emphasis is likely to shift more towards direct and digital marketing, but larger mass media campaigns will still be part of our armoury. We are not about to try and predict what will happen to oil prices and we all face the same macro-economics, so we would prefer to approach the rest of the new year with cautious optimism and a mindset that is still looking for slower, but positive, overall growth.
Category: Retail & Consumer Goods
Tweak communication for a glocal audience. With the UAE becoming an integral part of the global economy, events in other parts of the world do have an effect here. Marketers have to be well aware of these global waves and plan their strategies keeping it all in mind. Also, with one of the most diverse expatriate populations in the world, marketers must tweak their communications to suit a ‘glocal’ (global local) audience. Each brand has to review the plan from its viewpoint, because, while one brand might receive a negative impact from the external waves, another would greatly benefit.
Embrace video. The biggest challenge is the continuous evolution of social media. Video content will be one of the key drivers in 2017 and beyond. Marketers need to embrace this medium and use the various channels available to communicate with their audiences. There is an abundance of production studios in the UAE with a hub like Studio City and we should see the development of a lot more content locally and regionally.
While traditional media will hold sway, we have taken a stronger move towards digital and social media. With a focus on developing video content both locally and in close coordination with our brand partners, we intend to strongly communicate with audiences on the digital and mobile mediums more aggressively in 2017. This will be a year of consolidation for all. Oil prices, we hope, will see an upswing, but it would take some time. Till then, organisations have to dig in and only the best and the fittest will survive. That is the only silver lining to the recent economic issues.
Category: Tourism & Hospitality
Global challenges to drive creativity of regional marketers. The tourism industry continually faces a number of challenges as various source markets adapt their travel decisions due to external factors, whether it be currency, politics or turmoil. It is how we as marketers recognise these changes and adapt our own strategy that is important.
At RAKTDA, we regularly analyse arrival figures and [undertake] various marketing activities to ensure we are targeting the right markets, at the right time, to gain maximum results for the destination and our tourism partners.
If we look at Brexit as an example, [the UK] is a market that traditionally books quite far in advance and, to date, we have not experienced a vast change in arrivals. The Russian rouble crisis is a prime example of how we have managed to effectively position Ras Al Khaimah as an all-round tourism destination, while other tourism hotspots faced a decline in travellers from Russia.
Global challenges will continue to drive the creativity of regional marketers throughout this year and with them come various opportunities. Over the coming years, the region is set to host a number of key events and exhibitions, which present significant benefits should we be positioned correctly to capitalise on them.
Three-dimensional marketing approach. As part of RAKTDA’s Destination 2019 Tourism Strategy, we have adopted a three-dimensional approach towards our marketing activities. Through this, we are promoting the destination to three core tourism segments beyond the traditional sun-and-sand leisure market: active adventurers, cultural explorers, and wellness and luxury seekers. These not only outline a clear product differentiation, but have allowed RAKTDA to strategically position the emirate, promoting its USPs and attractions. RAKTDA will continue its drive for strong tourism partnerships and participation at key trade exhibitions globally and through trade road-shows.
– By Sunil Kumar Singh
A detailed version of this article appeared in the Feb 2017 issue of Gulf Marketing Review. To subscribe please call: +971 4 369 7573