MidEast digital advertising spend to double this year

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(Bloomberg)

(Bloomberg)

The proportion of money spent on digital advertising in the Middle East is forecast to double this year compared to 2011, as the region finally moves in the direction of Western markets, according to leading international advertising agency McCann WorldGroup.

About 8 percent of advertising budgets are expected to be spent on digital platforms in 2013, compared to 4 percent in 2011, McCann WorldGroup President Americas, Middle East and Africa, Luca Lindner, told Arabian Business.

“Such a move from 4 percent to 8 percent in one-and-a-half years only is clearly saying that it’s very possible that over the next five years the proportion of investment in digital will reach [the levels of] Western countries such as Australia and Asia, which [spend] 20 percent,” he said.

The digitisation of advertising is also causing the industry to become younger and younger to the point that Lindner believes it will be dominated by under-35s within five years.

“Advertising people over 35 years old, we just don’t get digital,” he said.

“The people who are joining McCann or other agencies are now in their early 20s, they don’t even know a newspaper, they don’t even use email, they use Google+ or Facebook [to communicate].

“I guess in five years all the CEOs and top people of advertising agencies will be in their late 20s or early 30s. I would not be surprised.”

The Middle East is expected to see the largest growth in digital advertising spending this year, with a global average of 3-4 percent, according to McCann WorldGroup, whose clients include Coca Cola, L’Oreal, MasterCard, Kingdom Holding and Dubai Duty Free.

The strong growth is a positive sign for the global economy, with advertising and marketing budgets having long been used as a barometer for the health of a company finances.

“I don’t think we’re back to pre-crisis levels [of advertising spending] but we’re back on a growth path, which is important to us,” Lindner said.

Lindner said the region’s poor internet facilities and passion for television made companies reluctant to advertise on the less traditional platforms including computers and smart phones.

“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 [viewer] numbers of TV rather than the question mark and the fragmentation of digital,” he said.

“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] You Tube and Facebook because they don’t control it.

“In order to be successful in the social media space you need to take risks otherwise nobody’s going to get interested and maybe they are conservative and prefer the safe path of TV than the adventurous, risky path of digital.

“But this, I think, will change. 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. Basically, it’s suicidal.

“Collectively, [the Middle East] needs to be more brave and daring because we need to get used to the fact we will make mistakes and make mistakes in digital particularly in social media is part of the game, which is not the way we were working in the world of TV and print advertising.”

Digital also has dramatically sped up the advertising world. Where a campaign used to take at least six months to formulate and would run for an average of two years, today’s market demands new concepts within two days and their lifespan is significantly shorter.

“In the traditional system, the process was very linear and very slow,” Lindner said. “[Now] the whole process is significantly faster.”

But that also means brands can determine whether their campaign is working virtually in real time.

“You know your campaign or innovation is working basically in real time, that’s a big change.”

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Posted by: Julia Bryan

Great article and I have been keeping up with this as well. The Middle East is now recognizing the abundance of money that could be made from the US. Russia is also becoming huge they are now buying alot of US property and companies compared to the Japanese. Getting into the Middle East market is huge due the the wealth in alot of those countries. Thank you for the article.

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