x Abu Dhabi, UAEWednesday 26 July 2017

Spending remains low on GCC digital advertising

Yet the chances of a smartphone or tablet user 'clicking through' to an advertisers' website are far higher than in the US.

Mobile advertising spending in the Middle East expected to double to about $20 million this year. Randi Sokoloff / The National
Mobile advertising spending in the Middle East expected to double to about $20 million this year. Randi Sokoloff / The National

Smartphone and tablet users in the GCC are six times more likely to “click through” to advertisers’ websites on their devices than their counterparts in the United States, a new report shows.

Yet despite this, digital advertising spending in the region remains low, analysts said.

More than 80 per cent of these click-throughs, where a user intentionally clicks on an advert to visit a company website, were made via links embedded in online videos, while 3 per cent came through advert links on social media networks, according to the report conducted by the marketing agency RBBi and Addictive Mobility, a Canada-based mobile advertising company.

Given the high penetration rates of smartphones and tablets in the region, advertisers are increasingly looking at the mobile platform to reach consumers. However, irrelevant banner and pop-up ads are unlikely to entice people to click through to a link, experts say.

“You need to give users something that is a light distraction. If you’re inside an app, you’re there because you want to be there and the ad should be complementary to that experience,” said Harvey Bennett, a strategy director and digital media specialist at RBBi Performance.

An advert needs to be engaging, whether it is a short video, a game or a relevant text message, and users need to feel they are gaining some sort of value by clicking through. Such adverts should last only 20 to 30 seconds to succeed, said Addictive Mobility’s chief executive Naveed Ahmed.

Global mobile advertising spending is set to reach US$18 billion this year, according to Gartner, with the amount in the Middle East expected to double to about $20 million, which is still relatively small.

“Advertisers in the GCC are gearing up for the mobile age this year, but I would not claim that this is the year of mobile [advertising]. It is going to grow substantially and will reach an inception point, but it is just another piece of the puzzle,” said Nadim Khouri, the director of mobile marketing in the Middle East and North Africa (Mena) at Resolution Media. “There is going to be more investment this year and it has become more relevant [but] advertising on the mobile platform has proved to be more challenging for companies.”

Currently, mobile advertising makes up less than 5 per cent of the total digital advertising spending in the Mena region. Total advertising spending last year is estimated at $5bn, with less than 10 per cent of that spent on digital advertising. By 2016 digital ad spending is set to reach $2.8bn across the region, according to the technology researcher Gartner.

The next phase of mobile advertising will be more targeted and tailored to users. Using geo-location services, advertisers say they will be able to target specific customers for promotions and deals.

“Smartphone penetration is huge, so is the opportunity,” said Alex Wilkinson, the mobile manager at Platform5, a digital agency part of the Middle East Communication Network. “Social media is also big, 94 per cent of users access social networks through their mobile phone and location targeting is key.”

Users who opt in to these location-based advertising services by downloading an app or signing up to a mailing list can receive messages when they enter a mall, for instance, informing them of relevant promotions and incentives.

“It is an emerging concept but the engagement and opportunity is far greater here than the US and UK,” said Mr Wilson.