Last year, the number of Internet users in the Middle East and North Africa reached 72 million, according to Arab Net, with 49 million Arab users on Facebook. ComScore estimates that, after Google, the most visited website in the region is Facebook, with 101.2 million unique visits per month.
As a consequence, the proportion of advertising budgets spent on online marketing is forecast to double this year, compared to 2011. The figures, compiled by the McCann World Group advertising agency, predict an increase from 4 to 8 percent.
These developments have powerful implications for the marketing and advertising firms active in the virtual Arab world, online or otherwise. However, despite growing internet use, their target audience is still significantly smaller than that of traditional TV, print, radio and outdoor advertisements, making companies reluctant to make investments in the online sector on a larger scale.
“I have a suspicion that some of the both the global and local companies in the Middle East are concerned, particularly with social media, [such as] YouTube and Facebook, because they don’t control it,” explained Luca Lindner, president of the Americas, Middle East, and Africa division of McCann WorldGroup, in an interview with Arabian Business.
In the same interview, he also blamed poor infrastructure and the lure of the familiar for the low level of spending online, compared to other world regions like Europe and North America.
“TV is a very important part of the life of Middle East people and now that there’s a lot of local production and an industry of entertainment . . . the big investors still prefer the safety and big numbers of TV rather than the question mark and the fragmentation of digital,” he said.
Advertising is a large business in the Middle East and Africa, with a regional expenditure USD 17.79 billion in 2012, and a projected spending of USD 19.02 billion USD. Nonetheless, digital platforms remain largely underrepresented. According to the forecasts from ZenithOptimedia, digital and online ads lost out to conventional mediums, and account for less than USD 143 million, or 3.4% of total advertisement expenditure in the Middle East and North Africa last year.
But the television industry has its own qualms regarding advertising, as MBC’s commercial director, Mazen Hayek, explained in an interview with DTVE (Digital TV Europe): “The top 15 channels in the region account for something like 70 percent viewing share and audience share and commercial revenue share. If you take the top 50 channels, you’ll get to something like 90 or 95 percent audience and commercial revenue share. Which leaves you with 650 free-to-air channels struggling for 5 or 10 percent max of the market. This leads to the need for greater consolidation, and probably mergers and acquisitions.”
Fewer TV channels means fewer ads, in other words.
While the direction of the trend towards the migration of consumers online is clear, its force and speed remains an unknown quantity in the eyes of local media firms. While caution is often a healthy quality, in the fast-moving world of online commerce which the Middle East is steadily joining, some industry figures warn that this may prove to be a dangerous attitude. In particular, they point to the huge numbers of young people in the populations of many Arab states, many of whom are online and far more engaged with social media than the older generation.
Luca Lindner, for one, warns that the face of the advertising industry itself is growing more youthful, in parallel with society itself. “I guess in five years all the CEOs and top people of advertising agencies will be in their late 20s or early 30s.”
“It’s basically impossible for any brand or any company or particular group or anybody who has to deal with consumers to stay out of the social media,” he added.
“Basically, it’s suicidal.”