Mobile Advertising Calls For Profits

With many GCC consumers now owning two handsets, mobile advertising represents a golden untapped opportunity.

By
Ryan Harrison
June 29, 2013

Mobile advertising is destined for big things in the Middle East but most campaigns are still too boring or uninspiring, the region’s top marketing professionals have warned.

The Middle East has 77 million internet users, 45 per cent of which access the web from their mobile.

By 2016, the Middle East and Africa will have the strongest mobile data traffic growth of any region at 104 per cent CAGR. All this represents a stellar opportunity for brands to reach their consumers.

But, so far, there has been more talk than action over generating truly unique and relevant mobile marketing strategies.

Yousef Tuqan Tuqan, CEO of leading digital agency Flip Media, said: “Everyone has been surprised by the speed with which consumers have shifted not only their internet consumption but also their consumption of offline media towards tablets and smartphones. The challenge now is to create interesting new ways to engage with consumers.

“Just making a smaller banner ad for a smaller screen is not innovation, it’s compromise. The best brands are the ones that create meaningful reasons for consumers to keep coming back to you — whether that is content, entertainment or functionality.”

He said advertisers and brands are still “stuck in the 20th century”, and most apps and mobile sites that have been built mostly disappointing. “I think that once brands start offering their customers better user interfaces and experiences, you will see far more business done on the small screen.”

The MENA region is witnessing remarkable growth in smartphone uptake, with around a 45 per cent migration rate from feature phones to smartphones.
The latest stats show that on average over a third of smartphone users have at least two smartphones, with almost all downloading and accessing apps daily.

According to the latest figures from mobile agency AdFalcon, its campaigns primarily target the UAE, followed by Saudi Arabia, Kuwait, Qatar and Oman.

Qatar and Oman have the region’s highest mobile click-through rates (CTR), a measure of how well a campaign has done.

On average an internet campaign will receive a CTR of 0.2 per cent, compared to 0.5 per cent on mobile.

Adrian Veliche, creative director at Isobar Mena, a digital communications agency, joins the chorus of concern though about advertising’s current effectiveness on mobile.

“Does it work in its current form? Not really. Advertising needs to be part of the experience, by complementing the content and context the user is interested in.

“In MENA, mobile is still an afterthought, and not given the right attention from the initial stages of the campaign.”

The rise of the mobile has been driven by the increased availability of cheaper data packages and devices to a mass audience.

Previously internet-enabled devices were mainly the domain of those who could afford the data costs involved with browsing the web on the move.
This growth has seen three mobile ad networks launch in the last 12 months — AdFalcon, Plus7 and Maddict.

AdFalcon has more than 1.2 billion monthly ad requests in the Middle East. Ad requests occur each time an internet user’s browser request information from an ad server.

There are currently 250 million mobile subscribers in the Middle East. Globally, this number is six billion, about 88 per cent of the global population.

Mobile advertising spend is forecast to hit $20.6 billion in 2015, up from $3.3 billion 2011.

Yet, according to advertising group Cheil Worldwide, there is work to do to persuade companies about the benefits of mobile ad investment.

“Here in the Middle East we still face certain challenges especially when it comes to education about the benefits of this channel,” said Wael Abdulhad, digital director at Cheil Worldwide Mena.

“Class one brands have recognised the ROI from this channel and have fully integrated it into their mix, but some smaller brands still need some convincing.

“With this in mind, recently we have started to see shifts in budgets towards this channel indicating that the power of smartphones and tablets is starting to become a force to be reckoned with.”

Spurred by interest in formats like branded apps, mobile special executions and mobile video, 82 per cent of brands, agencies and other companies plan to boost mobile ad budgets in the next 12 months, according to a recent study by MediaPost’s Center For Media Research and digital researcher InsightExpress. Four in 10 plan to increase spending by up to 30 per cent and three in 10 by 31 per cent or more in the next year.

Meanwhile, 15 per cent expect no change, and another three per cent plan to cut mobile ad spend.

Karim Khalifa, CEO of Digital Republic, said: “There is a major trend towards smartphone and tablet usage while watching TV, which represents a huge opportunity in Social TV, and consequently mobile advertising.

“We see an increased uptake in spend on mobile ad networks following on from the launch of several ad networks in our region, all of which offer reach on apps and mobile sites, ads serving millions of impressions daily. In fact, there is a 50 per cent quarter on quarter growth of mobile ad impressions in the region, so inventory is plentiful.”

According to MediaPost’s study, half of mobile ad dollars currently come from online budgets, 35 per cent from cross- platform buys, 27 per cent from funds specifically earmarked for mobile and 8 per cent from TV budgets.

The study projected that 43 per cent of mobile spending globally in the future will come from designated mobile budgets as the sector matures.

Increasingly, tablets are discussed in the same conversation over mobile advertising because of their fast popularity in the Middle East.

Experts say that tablet apps or tablet- optimised sites should be a big part of any modern marketing mix, especially given the number of recent high-profile device launches.

The arrival of Windows 8 operating system caused quite a stir last year, but has there been any effect on the industry?

Alexander Rauser, CEO of Prototype Interactive, said: “It is probably too early to tell and we have to wait until Microsoft gives us an update on actual sales figures.

“However, considering that within two months of Windows 8 being released it hit 60 million PCs and began enabling users to buy applications from the Windows Store. This should be enough indication that it should become serious competition.”

Rauser said considering that tablets are meant to be the replacement for newspapers and magazines, some outlets are already offering similar advertising avenues (like Flipboard, for example) to show that there is potential to create truly integrated experiences for tablets and potential for more interactive ad formats and touch optimization.

“Regionally we need more infrastructure across different screens. Mobile and tablet-optimised sites or content are rare. Brands don’t care yet about responsive design, (websites that scale to each device perfectly) and underestimate the traffic generated by mobile phones and tablet devices,” he added.

Daily search on mobile and tablets is now ubiquitous, with almost all users accessing the internet on-the-go every day. As a result, ad penetration on handheld devices in the MENA region is amongst the highest in the world.

There is, therefore, little concern about the fundamental demand drivers for the ad industry, and the potential for companies to reach their audience.

After all, consumers rarely leave the house without their mobile or mobiles.

But brands are facing increasing pressure to up their game if they are to cash in on this golden opportunity. In this fast-moving market place, acting first could make all the difference.

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