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2016, a Ma­jor Shift to Dig­i­tal

We are liv­ing in a re­gion that has the best recipe for cri­sis, be it war zones, fluc­tu­at­ing oil prices, and po­lit­i­cal un­rest. 2016 was def­i­nitely a tough year, the tough­est since the cri­sis of 2008, if not even tougher. And in tough times and be­cause most com­pa­nies are man­aged by ac­coun­tants and fi­nan­cial peo­ple, the first de­ci­sions are al­ways the eas­i­est ones, cut the ex­penses and start sav­ing. As a re­sult, the first vic­tim is al­ways the ad­ver­tis­ing bud­get and the em­ploy­ees.

Those fac­tors are big con­trib­u­tors to the ad­ver­tis­ing bud­get cuts and I would per­son­ally add an­other im­por­tant fac­tor, which is the shift from Off­line to On­line. This mat­ter is fur­ther com­pounded by the lack of in­for­ma­tion and knowl­edge in our mar­ket, which is con­fus­ing peo­ple about deal­ing with this sit­u­a­tion.

For many years, we have been hear­ing about peo­ple mourn­ing Off­line me­dia, and pay­ing praise to On­line as the suc­ces­sor. How many times have we heard that Print is dead, TV is dead, etc… We have been hear­ing talk that peo­ple are no longer con­sum­ing TV, read­ing a News­pa­per, or lis­ten­ing to the Ra­dio. They are not even look­ing at Out­door pan­els ei­ther. Ev­ery­body’s at­ten­tion has shifted to the elec­tronic screens, so if you want to ad­ver­tise and reach peo­ple, say good bye to TV and other ve­hi­cles, be­cause Dig­i­tal is your new best friend.

Due to a lack of knowl­edge, or even fear of com­ing across as old-fash­ioned, many fol­lowed the trend blindly. As a re­sult, talk about the death of Off­line has been cir­cu­lat­ing. In con­trast, Dig­i­tal is be­ing hailed, es­pe­cially since it can eas­ily be mea­sured and the ROI is clear…

The cur­rent trend shows that no­body is con­sum­ing Off­line me­dia and bud­gets should shift to Dig­i­tal. The weak­est link was Print, where we started see­ing bud­gets shift­ing from Print to dig­i­tal. All eyes were mainly on the fat­test cow, namely TV.

Sud­denly, Video on Dig­i­tal and So­cial Me­dia be­came the new thing. The chal­lenge now is to prove that a Video cam­paign on Dig­i­tal and So­cial Me­dia, is way more ef­fec­tive than TV, or can add more in­cre­men­tal each if added to any TV cam­paign. Of course, this had to be proven by Dig­i­tal or So­cial Me­dia pub­lish­ers them­selves. Ev­ery­body had to be­lieve that and never dared to ques­tion this. As a re­sult, we started hear­ing peo­ple mourn­ing even TV and pledg­ing their loy­alty to Dig­i­tal.

How­ever, many fac­tors came into play and the game started to sta­bilise: 1- Peo­ple be­came more ed­u­cated and

knowl­edge­able. 2- Peo­ple started to un­der­stand that Dig­i­tal is a chan­nel sim­i­lar to any other me­dia and can­not work alone. 3- Peo­ple started to un­der­stand that dig­i­tal giants can­not be the play­ers and the ref­er­ees at the same time and for the first time, we started to hear this com­ing from big in­dus­try play­ers.

So the need for 3rd party mea­sure­ment com­pa­nies in­creased and ev­ery sin­gle study done by Ip­sos or any other mea­sure­ment com­pany, showed the big ef­fect of tra­di­tional me­dia in a mar­ket­ing mix. It also showed that Dig­i­tal, sim­i­lar to any other me­dia, can­not work alone. Peo­ple just needed to un­der­stand more about dig­i­tal ad ef­fec­tive­ness com­pared to cam­paign ef­fec­tive­ness on TV and other me­dia. Peo­ple want to un­der­stand the ef­fects of ‘likes, clicks’, and most im­por­tantly about video viewa­bil­ity.

Peo­ple fi­nally re­alised that Dig­i­tal is a chan­nel to be used with dif­fer­ent me­dia. None­the­less, what also be­came clear is that at times Dig­i­tal could be used on its own, de­pend­ing on the prod­uct, the strat­egy, or even the sales plat­form. So, for the first time this year, we started to hear that Dig­i­tal in our re­gion needs to be or­gan­ised. As a re­sult, there is a very im­por­tant ini­tia­tive hap­pen­ing now, with the IAB in MENA plan­ning to or­gan­ise this dig­i­tal in­dus­try. We also started to hear peo­ple learn­ing when to use Dig­i­tal and when to use Off­line.

Look­ing at the num­bers of 2016, ex­clud­ing On­line, our num­bers, as most of you know, are based on rate cards, which means those num­bers are in­flated and con­tinue to be so as long as the mar­ket is not trans­par­ent and me­dia of­fer­ing com­pet­i­tive prices. How­ever, and de­spite all the in­flated num­bers, the to­tal ad­ver­tis­ing ex­pen­di­tures in the re­gion (ex­clud­ing On­line) de­creased in most coun­tries ex­cept for Egypt, who de­spite all its prob­lems wit­nessed a growth of 25%. The Pan-arab mar­ket is sta­ble, but all the other mar­kets who rely mainly on Print, have dropped heav­ily. KSA went down by 18%, Kuwait by 20% and UAE by 9%.

Analysing the num­bers by Me­dia, TV got the lion’s share with 75% of the to­tal ex­pen­di­tures in the MENA re­gion. Egypt grew by 9%, while News­pa­pers wit­nessed an ex­tremely bad year fall­ing 23%. Mag­a­zines de­clined by 19% and Out­door me­dia grew by 4% and Ra­dio by 2%.

Look­ing at the num­bers by brand, Det­tol was num­ber one in the MENA re­gion in terms of Adex, fol­lowed by Saudi Tele­com and Etisalat in 2nd and 3rd place. Dabur came in 4th, Pepsi in 5th, Coca Cola in 6th, and Sam­sung 7th. The 8-10th po­si­tions be­longed to Voda­fone, Al Marai and Zain. What is in­ter­est­ing to note is that of the top 10 brands, 4 are tele­com, which means that in terms of cat­e­gories, the telecom­mu­ni­ca­tion cat­e­gory is in 1st place, Real Es­tate in 2nd, Cars in 3rd, fol­lowed by bank­ing and Restau­rant.

I am happy to re­port that this is the first year we pub­lish on­line ad­ver­tis­ing ex­pen­di­tures sep­a­rately, not within the to­tal. Saudi Tele­com is the num­ber one brand on­line, fol­lowed by Zain and Mo­bily in 3rd po­si­tion, Sam­sung came in 4th place, Toy­ota 5th and Mcdon­ald’s in 7th. The 8-10 places be­longed to Ford, Nes­tle, and Chevro­let. The num­ber 1 web­site at­tract­ing the big­gest num­ber of Ads is Youtube, MBC is 2nd, fol­lowed by Koora, Du­biz­zle in 4th, and Ya­hoo in 5th place. The re­main­ing 6-10 spots be­longed to Al Riyadh, Khaleej Times, Al Ara­biya, Time­out Dubai, and Gulf News.

In 2017, based on my dis­cus­sions with many agencies and ad­ver­tis­ers, bud­gets

shifted from Off­line to On­line and will reach a max­i­mum ceil­ing of 20-25% of the to­tal bud­get, which is very re­al­is­tic and op­ti­mistic. Some clients have shifted from Print and to a lower de­gree from TV. On a more pos­i­tive note, some clients will be in­creas­ing their bud­gets in 2017 by us­ing Dig­i­tal. On a more pes­simistic front, some clients in­formed me that they will con­tinue cut­ting bud­gets in 2017 and will mainly use dig­i­tal. Not sur­pris­ingly, those clients have one thing in com­mon, their mar­ket­ing bud­gets are con­trolled by fi­nan­cial of­fi­cers, not me­dia spe­cial­ists.

In con­clu­sion, 2017 looks to also be a very chal­leng­ing year, and some­thing should be done to in­ject more trans­parency and ed­u­ca­tion for the peo­ple work­ing and man­ag­ing the ad­ver­tis­ing and me­dia busi­ness in our re­gion. We should not jump to con­clu­sion at the first sign of a cri­sis. We should bet­ter un­der­stand the link be­tween On­line and Off­line, and deal with the lat­ter as a chan­nel sim­i­lar to other me­dia. In ad­di­tion, we should also make sure that de­ci­sions are taken by the peo­ple

who make the money not the peo­ple who count the money.

In clos­ing I ex­tend a big thank you to the en­tire Ip­sos team for work­ing hard through­out the en­tire year to gather the num­bers pre­sented.

BY: ELIE AOUN CEO of Ip­sos Con­nect in MEAP re­gion

This year we will pub­lish the rank­ing for the on­line ad­ver­tis­ing mon­i­tor­ing (Cov­er­ing KSA, UAE & KUWAIT). The be­low 5 ta­bles are cov­er­ing KSA-UAE-KUWAIT in 2016(All top 10 ex­cept Brands is for top 20 to cover all mar­kets).

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