The UAE telecoms operator du plans to double the proportion of advertising it places on digital media in the next two years.
Online ad spending by du to double
The telecommunications operator du plans to double the proportion of advertising it places on the web over the next two years.
Osman Sultan, the company's chief executive, says du aims to devote more than 14 per cent of its advertising budget to online media by 2013.
"Digital media in 2010 represented a bit more than 7 per cent of our spending. I'm expecting this to double in the next two years," Mr Sultan said.
He was speaking at a debate at this week's Dubai International Advertising Festival, appearing on a panel alongside Mohamed Fawzi, the marketing director at BMW Middle East.
BMW was "spending around 10 per cent" of its total Middle East advertising budget on digital media, Mr Fawzi said.
The general level of digital advertising spending in the Middle East was behind that of the developed world, he said.
"We are definitely behind the developed world. The main reason is the absence or the low quality of the CRM [customer relationship management] and sales management systems here," said Mr Fawzi.
Online advertising has been relatively slow to take off in the Arab world, with spending in some markets accounting for just 1 to 2 per cent of total ad spending.
But the industry is growing, with some experts saying that spending will increase to almost US$200 million (Dh734.5m) in the GCC and the Levant this year.
Raja Trad, the chief executive at Leo Burnett in the Mena region, agreed the trend was towards growth in spending on digital media.
"There are some technical barriers that [are] not supporting the growth of digital," Mr Trad said. "But in my opinion, unless you live it today you're going to miss the train."
Telecoms companies such as du rank as the highest advertising spenders in the Mena region, according to the Pan Arab Research Center (Parc).
Zain, Saudi Telecom and Mobily were the largest advertisers in the region last year, according to Parc, while du ranks 23rd in the region, ahead of players such as McDonald's, Toyota and Gillette.
Mr Sultan said paid online advertising on regular news websites and search engine keywords was of major importance to du.
But he said the importance of du's own online content could be overtaken by "earned media" - free publicity and online conversations among consumers about a particular brand.
Earned media was influential in the new media landscape, Mr Trad said, adding that while such media was built by consumers, advertising companies had a role in "starting the conversation".
"Earned media is the most credible thing that people will look at in favour of the brands," he said. "Earned media is when you do something and it's picked up by the people because there is something new in it, because there's something trendy or modern."
Tom Bazeley, the managing partner of the UK interactive advertising agency Lean Mean Fighting Machine, was another speaker at the advertising conference.
Mr Bazeley said the number of digital "contraptions" that could be employed by advertisers was likely to increase in the future.
He pointed to the technology behind the gaming console Xbox Kinect, which allows consumers to interact with computers by using bodily gestures, as having potential for clients.
But Mr Bazeley warned some new developments, such as Google's ill-fated real-time communications tool Wave, were not living up to the hype surrounding them.
Elie Khouri, the regional chief executive of Omnicom Media Group, told The Nationalthis year that he expected advertising spending on digital media to increase to $195m in the GCC and the Levant this year, and account for 10 per cent of the total market by 2013.