Onlineadvertising july2015

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bq | INDUSTRIES | ONLINE ADVERTISING

QATAR

G N I S NETI

A I D E M

MO

Brands and companies are gradually getting their heads around the opportunities presented by online and digital advertising in the region

By Shereen D’Souza, Doha

Delivering promotional marketing content is something the GCC is gradually familiarising itself with.

Internet or online advertising has set its precedents in various parts of the world and what is worthy of mention is the immense revenue streams it has roped in over the last few years.

Compared to print, digital media consumption in the GCC is far behind. Online advertising is slowly picking pace in the region despite being in the low-spend category. Brands and several agencies are now slowly acknowledging the benefits of interactive advertising and the experiences and opportunities it presents. “Online advertising is becoming more popular every day in this region as advertisers recognise its value and its return on investment versus traditional advertising like in malls for instance besides outdoor and print,” Avraam Georgakarakos, online marketing manager at Vodafone Qatar, tells BQ magazine.

Bilal Randeree, managing director of popular web portal Qatarliving.com, feels currently, online advertising might be the most popular mode of advertising in the region.

“It is a lot more popular than it was

just a few years ago and it is constantly increasing,” he says.

“This is because they (Google AdSense) don’t take into account that this is a small market and whether your site fills a niche. Their rates are typically more appropriate for more developed markets like the US” Learning from the West The West is far more developed and proactive in terms of online and digital advertising. In the third quarter of 2014, internet advertising revenues hit a record high of USD 12.4 bn in the US, according to IAB Internet Advertising Revenue Report figures. The recent shift to digital media corrects what analysts have called the “online advertising gap”, referring to the lower share of ad money flowing to those channels despite consumers spending a higher percentage of their time there.

Many marketers still view legacy media, such as print and television, as more influential. This is especially

true of this region. According to Randeree, the advertising budgets of most Qatar companies are still heavily directed towards print and newspapers specifically. “But we are seeing a gradual switch over to online advertising,” he admits.

Online advertising in the region is quite different from the US in terms of choice of channels, types of advertisements and choice of ad servers. Countries like Dubai and the US have taken great leaps in HTML ads, rich media ads and interactive video ads. “Qatar has fallen behind but is quickly gaining ground,” says the general manager of media buying agency Action Digital (part of Action Global Communications) Dimitris Loannides.

Qatar may have fallen behind but is quickly gaining ground as advertisers become more educated in the domain and ask for more action based ads, according to Loannides.

There was a big increase in social ads spending in 2014. “With the average Qatari spending almost four hours every day on social media, it is no surprise,” he says. With such statistics in front, it is evident that companies are now turning increasingly towards online advertising JULY 2015

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and including it into their marketing plans and budget, especially for this year, presenting an irresistible space and business opportunity in the advertising world.

The proof of the pudding is in Khalifa Haroon’s testament. The founder of iloveqatar.net, a highly popular go-to website for anything and everything about Qatar, clearly notices an increase in online advertising. “People are starting to understand the benefits. Also, we try to educate advertisers on the importance of targeting as well as conversion,” says Haroon making a very valid point: “Is it better to have a million likes or views and one customer or 100 views and 50 customers?” A regular stream of viewers will not necessarily result in a conversion to sale while a targeted audience has more potential to actually go and purchase the product or service promoted through the ad in question. That is the segment advertisers should be looking at tapping.

PERCENTAGE OF AD SPEND IN ARABIC COUNTRIES WITHIN THE TOTAL GCC AD SPEND

MENA ONLINE ADVERTISING IS GROWING AT AN UNPRECEDENTED RATE OF 37% PER YEAR

Bilal Randeree, managing director of popular web portal Qatarliving.com

Ad world of AdWords While several companies follow mixed strategies, websites claim to usually run direct ads. A combination of going through local websites and using Google ad delivery systems seems to be the standard formula companies are effecting. “Until 2012, most of our banner ad sales were done through Google AdSense, but since 2013, we have been increasing our direct sales and now we are selling a majority of our inventory directly to advertisers and agencies,” reveals Randeree while explaining his website model.

“Once the advertiser realises that online adver33.3% tising can offer precise Saudi Arabia numbers on the reach and 19.6% engagement of banners, Other they prefer to book on a CPM basis. For those that The UAE accounts for 47% of GCC online ad spend, followed by Saudi Arabia at 33.3% are new to it, they prefer to go with fixed spots over certain periods”

The total digital advertising spend in the Middle East is currently 8 to 10% of the total global ad spend

ESTIMATED SHARE OF AD SPEND IN THE MIDDLE EAST WITHIN THE GLOBAL AD SPEND

47.1%

UAE

Saudi Arabia

UAE

$31.40

$7.80

Average online ad spend per internet user in the UAE and Saudi Arabia Infographic: Rana Selo

www.bqdoha.com

Loannides, from a media buying agency’s point of view, believes that companies ultimately prefer both, for the reach and targeting options available. “They key decisive factor is budget in this case. Companies opt for larger reach and therefore mainly use Google AdSense,” he says. Further endorsing his opinion, Vodafone Qatar confirms their use

3.7% 2013

4.6% 2014

5.7% 2015

7.2% 2016

8.9% 2017

Infographic: Rana Selo

of mixed strategies. “Each medium serves different audiences and business needs. Usually we use the Google network to build quick awareness on a massive scale and on the other hand we go directly to local websites for more targeted advertising,” Georgakarakos explains.

The more popular websites like iloveqatar.net run direct ads since the average revenue they can generate off Google AdSense

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is rather low. Haroon breaks it down: “This is because they don’t take into account that this is a small market and whether your site fills a niche. Their rates are typically more appropriate for more developed markets like the US.” Pricing models From traditional payment calculation methods, advertisers and publishers in the region are now moving towards a wider range of options. As the cost of advertising on Google Display and AdWords were relatively low, advertisers flocked to Google to advertise. Publishers were forced to implement a Fixed Monthly Rate system to compete with the lower pricing by Google.

But as more and more advertisers started using Google, the prices steadily grew higher giving publishers the opportunity to finally compete, especially when introducing CPM models.

CPM or Cost per Mille means that advertisers have to pay for every thousand displays of their message or advertisement to customers, or potential customers. “Most Qatari publishers still use AdSense and Fixed Monthly rates,” reveals Loannides and goes on to say: “But with new ad servers on the market and increased prices on Google and social media, they will be more interested in moving towards a CPM model.”

Randeree says qatarliving.com’s main pricing model is CPM, but they

Avraam Georgakarakos, online marketing manager at Vodafone Qatar

do have fixed products and CPC options as well. CPC or cost per click means advertisers pay every time a user clicks on that particular ad.

“Since we have a wide user base and many different sections on our site, we try to customise each campaign to best fit the needs of the advertiser,” he explains. “The local market has not been familiar with how online banners work and the CPM model, which means we have had to educate them quite a bit first. Once the advertiser realises that online advertising can offer precise numbers on the reach and engagement of banners, they prefer to book on a CPM basis. For those that are new to it, they prefer to go with fixed spots over certain periods,” he details.

“People need to realise that it is not about choosing online or print. It is about creating a campaign that utilises multiple touch points and follows targeted users/ potential customers, in order to tell a story and hopefully, make a sale” iloveqatar.net offers different types of ads – sponsored content, one off banners that are on newsletters; time-based banners on their website and sponsored posts. Their timebased banners are at a weekly rate and for a minimum of two weeks.

“We have found that for proper impact, you need at least two weeks,” Haroon enlightens. Typically advertisers prefer CPM or CPC, however, according to him, most advertisers are happy with their model of a weekly banner - not limited by impressions or by a specific section of the site. “Basically the banner has the chance of being shown on any page of the site,” he adds.

Long way to go The regional markets are still very immature, although there is a visible and strong increase in the growth

General Manager of media buying agency Action Digital (part of Action Global Communications) Dimitris Loannides

of this industry. The region is characterised by unique features, for instance, the ultra-high frequency of visits to malls that keep the offline advertising as a must-have to the media buying mix. “Qatar has the second highest internet penetration in the world and one of the highest smart phone usage rates so there is no doubt that people are turning to digital for all their content and service needs. As advertisers catch-up to their customers’ behaviour and media buying becomes more sophisticated in terms of tools and targeting, we expect to see a balancing of the advertising market,” predicts Georgakarakos.

People are used to traditional ads. “The market simply does not know the benefits of advertising online, namely, geo-targeting, interest-targeting, tracking a user's conversion and so on. I could go to someone and ask them to pay QR 4,000 for a banner per month and they might consider it expensive but once I break down the cost per impression, they realise how cheap it is,” Haroon illustrates.

Loannides adds a different perspective while explaining why online advertising is not so popular in this region. “Executives and top level managers need to embrace the digital word and not fear the changes it has brought,” he says. “Most highlevel managers in large industries do not understand the fast paced digital world and are concerned about JULY 2015

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Khalifa Haroon, founder of iloveqatar.net

investing in online advertising. It is a major roadblock and an ironic one.

Digital advertising has evolved so well that we can now reach our niche customers anywhere in the world, but it is such a fast paced industry that some are very cautious about moving into it. Decision makers must understand and integrate their marketing efforts online.”

Local websites prove that there is growth as they confirm an increase in direct ads. “As the biggest publisher in the country, we have a huge inventory base, and we are constantly increasing the level of direct sales,” affirms Randeree. Haroon adds: “People need to realise that it is not about choosing online or print.

It is about creating a campaign that utilises multiple touch points and follows targeted users/potential customers, in order to tell a story and hopefully, make a sale.”

Get on the bandwagon As digital advertising is a less mature medium, a lot of advertisers buy media in a similar way to print.

More sophisticated measurement and learning can help improve the quality of ads and the overall results according to Georgakarakos who strongly believes there is a lot of space for improvement, especially on the design and user experience of local websites that will result in new types of ads, for instance, engagement ads, light boxes, hover to play etc.

He adds: “Switching gears to a CPC approach will push advertisers www.bqdoha.com

bq | INDUSTRIES | ONLINE ADVERTISING

to invest more in online advertising as they will see better performance and cost. As the online ecosystem matures in the region and new types of ads like push-notifications ads through apps are becoming available, advertisers will start spending more on online advertising rather than traditional media. In addition, advertisers should pay close attention to content, creative and context.”

Companies should have easier access to tools and online advertisers in their region. “The growth and maturity of the market is continuing at a good pace, and the more professional publishers that enter the market, the better for everyone,” Randeree comments. To contribute to the evolution of this industry, it is about time even small and medium sized businesses begin to look at online advertising as an important and effective tool for promotion.

Qatar has the second highest internet penetration in the world and one of the highest smart phone usage rates so there is no doubt that people are turning to digital for all their content and service needs Not ignoring the remarkable improvement in the online space and digital advertising, as several industry sources claim, the online advertising industry is bound to see fast paced growth in the coming years. “We are seeing that already with an average increase of revenue by 23 percent year on year,” says the optimistic founder of iloveqatar. net. Speaking specifically about Qatar Georgakarakos concludes: “We will see a boom in the next few years in the region, specifically in the Qatar online market. As we are moving ahead, new and fresh ideas are being implemented, content creation is playing a significant role and users are getting fully accustomed to the online advertising and sales environment.”

SWISS PHARMA COMPANY OPENS IN UAE

UAE - The UAE is now positioned as a strategic and highly attractive investment destination for international pharmaceutical companies as demonstrated by the recent set-up of more than 15 new pharmaceutical factories, according to Dr Amin Alamiri, assistant undersecretary for Public Health Policy and License Sector, Ministry of Health (MoH). The MoH senior official further stressed that the presence of these international pharmaceutical companies adds value to the UAE healthcare system.

Alamir’s statement was given during the recent opening of the first Middle East office in Sheikh Zayed road, Dubai of Vifor Pharma, a Swiss pharmaceutical company under the Galenica Group that focuses on the discovery, development, manufacturing and marketing of pharmaceutical products for the treatment of iron deficiency. The company is into development, production and marketing of innovative products for the treatment of iron deficiency - with or without anaemia.

The opening of the new office falls in line with Vifor Pharma’s move to expand and reinforce its presence in the Middle East region’s thriving pharmaceutical industry. Industry analysts have cited the move as a timely and strategic one as the pharmaceutical firm is expected to play a significant role in the Middle East’s battle against iron deficiency. Vifor Pharma has expressed its full support in the recovery of patients with iron deficiency anaemia by developing innovative medicines that are aimed at improving their lives.

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