Online advertising expenditure in the Middle East could reach as much as $170 million (Dh624m) this year as web marketing makes headway and regional internet usage sees rapid growth, a Dubai-based advertising executive has predicted.
Isam Bayazidi, Chief Executive Officer of advertising network
ikoo, said the budget allocated to digital ad spending in the region has been growing at a considerable rate of about 50 per cent annually, reflecting the web’s increasing significance as a marketing tool.
Internet users in the Middle East were estimated to be over 72.5m as of the second quarter of 2011, representing a modest 3.4 per cent of the global online population, according to
InternetWorldStats.com.
Despite this measly figure, the Middle East has recorded the second highest internet usage growth rate in the world at 1,648 per cent between 2000 and 2011, next only to Africa which saw its online penetration soaring by 2,527 per cent during the period, the statistics website mentioned.
While the digital space appears to be a promising platform for Middle East advertisers, Bayazidi said it offers a massive room for expansion as it currently accounts for a meager portion of the total advertising industry.
“Online still [represents] a very small share of about two to three per cent or $150m of the overall ad spending in the region. By the end of 2011, online ad spending is expected to reach between $150m and $170m,” he said.
Advertisers in the region, however, can take solace in the fact that the Middle East online ad spending has been relatively strong compared to other regions in the world.
“The region is showing one of the strongest growth all over the world when it comes to digital. This is probably driven by [advanced telecom] infrastructure, the increase in internet users, and to an extent the attention that the internet has received in recent months [following the Arab Spring] as an effective communication tool. There are now more marketing people looking at the web seriously as a platform to promote their brands,” Bayazidi said.
Arabic content in short supply
ikoo’s chief executive believes the scarce volume of Arabic content on the web is one of the challenges facing the regional advertising sector.
“The lack of Arabic content is curbing the growth in digital advertising in the region. It is also a well-known fact that Arabic content represents a much lesser percentage of the overall internet content, versus other languages. This is something we hope will improve in the next few years,” Bayazidi said.
A noticeable trend, he added, is the increasing number of video content from this region that is being posted on the net.
“We have seen more Arabic video content, more professionally done content [on the web], and this will definitely drive growth in the [advertising sector] in the region,” he said.
Asked why online advertising remains a minute representation of the greater advertising sector, especially here in the Middle East, Bayazidi said the leading factor could be education.
“Online advertising in the Middle East is just about two to three per cent, but in Western Europe and the United States, the segment represents more than 30 per cent of the industry. The small figure could be brought about by education. There is a need for people to learn about the advantages of advertising online,” he said.
Currently, television advertisements – particularly those in Arabic – account for the lion’s share of the advertising expenditure in the region, followed by the print media, Bayazidi said.
Attracting over 35m unique internet users
With a network of over 120 websites across the region, ikoo boasts of having audience with over 35m online users in the region every month, generating a traffic that results to about 1.4 billion ad impressions, the company said on its website.
Ikoo, which is part of the Jordan-headquartered and e-commerce-focused Jabbar Internet Group, claims to be the largest online advertising network in the Middle East and North Africa region.
Bayazidi said ikoo, which has expanded across the region with its main office in the UAE, focuses on two advertising products: the brand-and-reach type, which allows advertisers to reach customers through ikoo’s network of 120 websites; and the other is performance-driven type, a tracking platform that generates direct leads and sales to industries such as e-commerce, travel and financial services, among others.
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