Mobile ads in ME only 8% of total advertising - Deloitte
We are stepping into a world where smartphones and tablets outsell PCs. While regional advertisers are aware that the industry is going 'mobile’, spend on digital advertising is still low, according to a recent report by global consulting firm Deloitte.
“Digital advertising spend in the Middle East represents approximately eight per cent of the total advertising spend [this year],” said Emmanuel Durou, Deloitte’s director of strategy consulting.
The report, entitled âMiddle East Technology, Media and Telecommunications Predictions 2013’, shows that digital advertising in the region accounted for 6 per cent of the total advertising spend last year. This creates a disparity between digital ad spend and the consumption of mobile devices, considering that the Middle East made up 6 per cent of global smartphone shipments last year, but has less than 0.1 per cent of mobile advertising.
In addition, the gap between digital and television advertising spend in the region is still glaringly large, with the latter accounting for 40 to 41 per cent of total advertising spend, said Durou.
The region has many opportunities for mobile
advertising, a term that considers smartphones and tablets. The UAE, for instance, has a strong telecoms infrastructure, with two major telecom service providers, a high smartphone penetration, as well as a predominantly young population with a big appetite for smartphones and tablets.
The tablet market in the Middle East and Africa was up 90 per cent year on year, closing with 1.36 million units in the fourth quarter of last year, stated the report.
The demand for tablets was fuelled by low-cost options and the Millenials’ (the population below 25) engagement with social network sites and online videos on these devices, among other factors.
There are a number of factors that hamper the creation of digital content on mobile devices.
One factor is the ownership structure of brands. Licensees that manage a number of international brands are less likely to engage creatively with customers through advertising. Instead they “focus on sales and volumes,” Bolle said.
Another challenge is the late arrival of some of the regional brands to digital platforms.
ome brands “have only three or four years of online existence,” Bolle said.
Meanwhile, advertisers in the region are still reliant on push strategies to communicate their brands to consumers. One way they can achieve that is through direct messaging or SMS, Bolle said.
Companies in the UAE allocate their advertising budget on display ads, such as banners on websites, which make up 60 per cent. The rest of the budget is spent on direct messaging or SMS, which accounts for 30 per cent, and search 20 per cent.
Digital advertising spend in the region is expected to grow at a compound annual growth rate of 35 per cent and make up 10 per cent of the total advertising spend by 2015, according to the report.