SME profile: A pioneer in Arabic advertising
Digital online advertising has changed the face of traditional advertising in mature markets, and the technology is beginning to gain a foothold in the Mena region.
Among the local players in this emerging field is Adzouk, a Dubai-based company responsible for 1.2 billion ad impressions every month (an ad impression is when you see an advertisement on a website, whether you click on it or not). You see its handiwork every day – a Jaguar pop-up ad on a car-buying website, a Land Rover ad running along the side of a news feed or a pop-up for a Calvin Klein watch on a personal finance site.
The company was started four years ago by Jamie Atherton, who is now its managing director, along with three partners based in London.
“I’m a digital geek,” Mr Atherton says proudly. “I knew nothing about starting and running a business but I did know about the digital marketplace, and that has helped build the firm.”
The London-based partners approached Mr Atherton in 2011 because of his geek credentials, and because they saw an opportunity in the fledgling digital markets of the Middle East. They just needed someone on the ground who knew the terrain.
For Mr Atherton, though, it was a second start – his first was in the field of football analysis.
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“I’d been a football analyst straight out of university working for a company called ProZone,” he says. “I was hired out here to work with the clubs. Al Ahli [in Dubai] was my first professional club. I had to analyse their play and suggest patterns of behaviour that would benefit certain players and strategies to help them win matches – it was the digital evolution of football using data to shape the physical world. It’s what I do now, but I do it with advertising.”
Mr Atherton found that the money is only in football if you are playing it, and in 2006 started selling advertising for a magazine, eventually becoming the sales director for the news site AMEInfo. “We started with 95 publishers. They were contacts of one of the original partners,” he says. “It was my job to make sure whatever advertising we could drive to those sites was optimised financially and visibly, and targeted specifically. I remember sitting in the Media One Hotel coffee shop after I’d left my job. I had my laptop, no real office, no staff and I thought ‘well, I’d best get started then’.”
The grand idea was to target Arabic websites. That is still his strategy today, with 2,700 publishers as clients. About 80 per cent of the work is in Arabic, and the rest is in English. The market is booming, with a 100 per cent increase in sales last year, and Mr Atherton would be unhappy if this year was not equally successful, he says.
In a nutshell, Adzouk is a digital platform that brings together online publishers and advertisers by the use of local contacts or online algorithms from Google.
While Google is the undisputed patriarch of the digital advertising world, Adzouk has formed a cosy relationship with the search giant. It partnered with Google two years ago so it could use Google’s technology, which meant that rather than looking for ads from a local perspective, advertising could be sourced from anywhere in the world.
That relationship has grown, and now Adzouk finds itself a certified publishing partner, which means the company has brilliant technical support, its publishers make more money from the ads placed on the sites and Google gets to mop up any ads that are not placed.
Competition is growing from local and regional competitors, particularly in Saudi Arabia and Lebanon, but Mr Atherton’s biggest concern is a larger competitor buying the business he and his partners have built.
The UAE is the biggest buyer for digital advertising, closely followed by Saudi Arabia and Egypt.
According to a PWC study released in December, the UAE’s internet advertising sector is worth US$229 million, but that is set to rise to $735m by 2018, for a compound annual growth rate of 34.6 per cent. PWC says that will be the highest rate in the world. Nigeria is in second place with 32.7 per cent growth, followed by Egypt with 31.8 per cent.
Worldwide, PWC says internet advertising will grow at a compounded rate of 10.7 per cent a year to reach $195bn by 2018.
To ensure it stays on the growth trajectory as the overall market, Adzouk in the next year will open its first office outside of the UAE in Jeddah.
“We have 21 staff now in Dubai, working out of Media City, and we still have not invested any capital into the business other than what we have generated,” says Mr Atherton. “This next year we will open four offices across the region. Jeddah will be our first, very soon, then the plan is for Riyadh, Kuwait and Casablanca, because we need somewhere to support the North African market.”
While Adzouk is looking at crossing international borders, it will take the expansion slowly, says Mr Atherton, “because this is new territory for us – literally. But just like four years ago, I will use the same mantra as when I was sitting in the Media One hotel coffee shop: ‘Right then, I’d better get started’.”
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