Is mobile advertising destined to pick up in the region?
Nadim Khouri, director of mobile and web at Resolution Media, discusses why mobile advertising in the MENA region will gain momentum sooner than expected
February 27, 2014 4:55 by kippreport
When Steve Jobs introduced the first tablet, most people were critics. They could not fathom the need for an additional device. They believed that, in terms of “portable devices”, a smartphone and laptop were more than sufficient for an individual. Now, however, not only is the tablet market growing at a very fast pace, but there is the emergence of a new window for the “phablet” (a phone-tablet hybrid). For most phablet owners, the need for tablets has become redundant. Personally, I do not agree, but I do think there is a mobile product out there for everyone. Furthermore, the role of the laptop is quickly changing to that of an office accessory, with other devices becoming a better fit for people’s casual environments.
According to Ken Wieland from MWC Mobile World Daily, although still the smallest segment when compared to smartphones and laptops, tablets were the fastest growing segment within the portable devices category in the first quarter of 2013, with 41.9 million units sold globally, which represents a 106 percent increase over the previous year. Conversely, the laptop segment, which shipped 50.5 million units over the same period, has declined by 13 percent. Smartphone sales grew by 48 percent, boasting a whopping 216 million units. Often coined the most personal device, smartphones are leading the way on this frontier and will continue to see year-on-year growth. A chart from a Business Insider Intelligence Report helps to visualize the expected change of the portable devices category over the next few years.
Now is the time for organizations to step out of the shadows of indecision and fear, and face the sun shining directly in their faces. I recall the words of Winston Churchill: “A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.”
So what does this mean to us in the MENA region? Unlike other trends, this region has not lagged when it comes to the smartphone movement. According to Google’s Mobile Playbook, the UAE is leading the world’s smartphone penetration at 73.8 percent; Saudi Arabia is third at 72.8 percent. Other reports have positioned Qatar even higher than the UAE at 75 percent. The GCC region is very much at the forefront of this growth. Ninety percent of all smartphone users confirm that they use the Internet on their phone and download an average of 22 apps, with 10 of them being actively used.
This intelligence leads to only one conclusion: A very large imprint on apps and mobile web available for brands to leverage.
As mobile media ad units become increasingly innovative, mobile targeting technology gets enhanced and inventory prices remain far more affordable than other digital mediums, the outcome is an invigorating touch point that we can focus on. The days of expensive iAds, launched by Apple, are behind us. Capabilities of reaching your audience via geo-targeting and even geo-re-targeting are unique to mobile. Targeting via social conversation is another interesting angle to consider. Leveraging the wearable tech wave (ie advertising on fitness apps once a user achieves a certain goal, based on the principle of serving an ad at a moment of exhilaration) has proven to be extremely effective. Provided that the ad served is in context, this form of promotion can go a long way. The tremendous evolution of ad tech and the available impressions in the mobile space is incredible. Because it’s also available in this market, brands no longer have an excuse to not exploit the mobile boom.
Based on a regional eMarketer study, mobile media spends – excluding SMS or Voice – in the MENA region were expected to reach $50 million in 2013. However, what’s even more impressive is the estimated growth of 700 percent in this sector, which is predicted to reach $340 million by 2017. As mobile takes a larger chunk of digital media budgets each year, the question is when it will account for the majority of that budget. It remains to be seen, but I believe it will happen sooner than people think.