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The State of Digital in the Middle East and North Africa

Supported by ArabianBusiness.com SAMPLE ONLY. Please download the full report from:

http://econsultancy.com/reports/the-state-of-digital-in-mena


The State of Digital in the Middle East and North Africa

Econsultancy London

4th Floor, The Corner

91-93 Farringdon Road

London EC1M 3LN

United Kingdom

Telephone:

+44 (0)20 7269 1450

http://econsultancy.com

[email protected]

Econsultancy New York

41 East 11th St., 11th Floor

New York, NY 10003

United States

Telephone:

+1 212 699 3626

All rights reserved. No part of this publication may be

reproduced or transmitted in any form or by any means,

electronic or mechanical, including photocopy, recording

or any information storage and retrieval system, without

prior permission in writing from the publisher.

Copyright © Econsultancy.com Ltd 2011

Published April 2011

The State of Digital in the Middle East and North Africa - Supported by ArabianBusiness.com

All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage

and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2011

Contents

1. Executive Summary and Highlights ................................ 1

2. Introduction by ArabianBusiness.com ............................ 4

3. About Econsultancy ......................................................... 5

4. About ArabianBusiness.com ........................................... 6

5. Methodology and sample ................................................. 7

5.1. Methodology ................................................................................ 7

5.2. Respondent profiles .................................................................... 7

5.2.1. Respondents ................................................................................................... 7

5.2.2. Geographic location ....................................................................................... 8

5.2.3. Job roles ......................................................................................................... 8

5.2.4. B2B / B2C focus ............................................................................................. 9

5.2.5. Industry sector ............................................................................................. 10

5.2.6. Type of agency ............................................................................................... 11

6. Findings ......................................................................... 12

6.1. Marketing budgets ..................................................................... 12

6.1.1. Annual company revenue ............................................................................ 12

6.1.2. Annual marketing budget ............................................................................ 13

6.1.3. Proportion of marketing budget spent on digital ....................................... 14

6.1.4. Change in marketing budgets in 2011 ......................................................... 16

6.1.5. Increase in overall marketing budgets ........................................................ 18

6.1.6. Increase in digital marketing budgets ........................................................ 19

6.2. Use of marketing channels ........................................................ 20

6.2.1. Offline marketing channels ........................................................................ 20

6.2.2. Online marketing channels ......................................................................... 23

6.2.3. Changing budgets for digital marketing channels ..................................... 27

6.2.4. Investment in digital marketing technologies ............................................ 29

6.3. Barriers to digital marketing and e-commerce ........................ 32

6.3.1. Barriers to greater investment in digital marketing .................................. 32

6.3.2. Barriers to increasing digital revenue ......................................................... 35

6.3.3. Local issues holding back e-commerce ....................................................... 38

6.4. Measuring marketing effectiveness .......................................... 40

6.4.1. Proportion of overall revenue driven by digital channels ......................... 40

6.4.2. Metrics to measure marketing effectiveness .............................................. 41

6.4.3. Understanding of how to measure ROI ...................................................... 43

6.4.4. Understanding of digital by senior management ....................................... 45

6.4.5. Barriers to increasing digital marketing effectiveness ............................... 47

SAMPLE ONLY - The State of Digital in the Middle East and North Africa – Supported by ArabianBusiness.com Page 1

All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information

storage and retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2011

1. Executive Summary and Highlights The Econsultancy State of Digital in the Middle East and North Africa report is based

on a survey of more than 500 company and agency marketers carried out in February and March

2011.

The report looks at relative levels of spending this year, across a range of marketing channels,

comparing online and offline budgets, while also looking at planned investment on different types

of marketing technology.

The research findings reflect a buoyant digital industry that is experiencing rapid growth. On

average, companies are spending 22% of their marketing budget on digital, and more than half

(58%) are increasing their digital budgets in 2011. This compares to 43% of organisations who are

increasing their overall marketing budgets this year.

While digital is showing rapid growth, companies are using both online and offline channels to

drive marketing efforts. Email marketing is the channel most frequently employed by companies

for digital marketing. This correlates with research from Effective Measure1 that shows that email

is the most popular activity online for consumers in the Middle East. Email marketing is effective

because it delivers tangible ROI via inherently measurable metrics.

Social media is also a strong channel in the Middle East, with many companies using websites

such as Twitter and Facebook for marketing. However, fewer companies are incorporating social

media features (such as blogs, forums and ratings) into their own websites.

While digital is exhibiting strong growth, companies are also using offline channels for marketing.

Some agencies and companies feel that there is too much reliance on traditional marketing, which

is holding back investment into digital.

Although the digital industry is booming, there are still many barriers to growth. A combination

of different factors is preventing companies from investing more money, rather than a single

overriding barrier.

Many of the problems relate to a lack of training, education and consultancy, which is good news

for agencies and supply-side companies that are able to offer these types of services. There is

clearly a gap in the market for industry expertise and specialist knowledge that could be used to

better inform clients about the potential of online marketing.

Many companies are not yet adequately measuring return on investment from digital marketing,

according to the supply-side respondents surveyed. There is a wide disparity between client-side

and agency respondents when it comes to evaluating companies‟ ability to measure ROI.

The good news for marketers is that these barriers are not holding back digital marketing, as the

industry continues to flourish. Further investment will break down the barriers to online

marketing, as the market develops and matures.

SAMPLE ONLY. Please download the full report from:


1 http://www.spotonpr.com/wp-content/uploads/2010/09/InternetHabitsEM29Sep10.pdf





Other relevant Econsultancy reports, training and events

Middle East and North Africa: Internet Statistics Compendium

http://econsultancy.com/reports/middle-east-and-north-africa-internet-statistics-compendium

Digital Cream Dubai

http://econsultancy.com/events/digital-cream-dubai

Training courses in Dubai

http://econsultancy.com/training/in/dubai

Fast Track Digital Marketing - Dubai Training

http://econsultancy.com/training/courses/fast-track-digital-marketing-dubai/

Social Media Marketing - Dubai Training

http://econsultancy.com/training/courses/social-media-marketing-dubai/

Online Media Planning and Buying – Dubai Training

http://econsultancy.com/training/courses/online-media-planning-and-buying-dubai

Search Marketing - Organic/Natural (SEO) - Dubai Training

http://econsultancy.com/training/courses/search-marketing-organic-natural-seo-dubai

Fast Track Digital Marketing - Abu Dhabi Training

http://econsultancy.com/uk/training/courses/fast-track-digital-marketing-abu-dhabi



http://econsultancy.com/reports/middle-east-and-north-africa-internet-statistics-compendium

http://econsultancy.com/events/digital-cream-dubai

http://econsultancy.com/training/in/dubai

http://econsultancy.com/training/courses/fast-track-digital-marketing-dubai/

http://econsultancy.com/training/courses/social-media-marketing-dubai/

http://econsultancy.com/training/courses/online-media-planning-and-buying-dubai

http://econsultancy.com/training/courses/search-marketing-organic-natural-seo-dubai

http://econsultancy.com/uk/training/courses/fast-track-digital-marketing-abu-dhabi





2. Introduction by ArabianBusiness.com As a company website at the forefront of the digital revolution in this region, we are uniquely

placed to see both the incredible growth in one area, and the weaknesses and lack of knowledge in

other areas.

This is why ArabianBusiness.com has always supported, endorsed and executed initiatives aiming

to educate the marketers and decision makers about the power of digital advertising and the best

practices to empower the brands and deliver results to the advertiser.

It is for this reason that we have joined up with Econsultancy, who we consider as a key partner in

this initiative, not only because of their global expertise but also for their immense contribution

towards the delivery of powerful content on online advertising.

Indeed, the audience response to this survey was much higher than average which shows the

hunger for more information on digital advertising.

The report‟s findings are aligned with ITP Digital‟s vision of online marketing in the region. We

have experienced exponential growth in both reach and revenue – the website now reaches two

million unique visitors per month and delivers more than six million page impressions.

As a result of this huge traffic, we have also witnessed a huge growth in advertising revenues of

around 30% in 2010. We expect a growth of at least another 30% in 2011, despite the challenging

market conditions.

Today, we are also seeing an increase in the level of digital sophistication and the level of

education with every company brief we receive, with every campaign we run, and with every

creative execution we‟re delivering to clients.

As a company at the centre of this huge change, we are striving to now lead the way – hence the

reason why we have launched more than 15 websites over the past two years, and have invested

heavily in our mobile platforms as well as iPhone and iPad applications.

We strongly endorse and support the findings in this report, and look forward to working across a

number of future initiatives with Econsultancy.







3. About Econsultancy Econsultancy is a community where the world's digital marketing and e-commerce professionals

meet to sharpen their strategy, source suppliers, get quick answers, compare notes, help each

other out and discover how to do everything better online.

It was launched in 1999 and since then has grown to a dominant position in the digital marketing

industry with more than 100,000 members worldwide.

Its website and blog attracts more than 300,000 unique users per month and its range of training

courses and conferences are attended by more than 5,000 marketers every year.

Econsultancy also provides a range of resources specifically for the Middle East including

regionalised reports, such as the Middle East Internet Statistics Compendium, local events, online

resources and training programmes. Econsultancy‟s 100,000 members make better decisions,

build business cases, find the best suppliers, look smart in meetings and accelerate their careers.

Find out more at http://econsultancy.com/hello/mena.

For more information, visit http://econsultancy.com or follow @econsultancy on Twitter.



http://econsultancy.com/hello/mena

http://econsultancy.com/

http://twitter.com/econsultancy





4. About ArabianBusiness.com ArabianBusiness.com is the Middle East‟s leading resource for informed news, opinion and

analysis, delivering breaking stories around the clock in both English and Arabic.

Staffed by a team of more than 80 journalists in sectors as diverse as real estate, leisure and

politics and economics, ArabianBusiness.com offers fresh, compelling content to the region‟s key

decision makers. We offer:

Exclusive coverage of the key sectors affecting the Middle East today, from banking and

finance, politics and economics, real estate, construction, media, travel and hospitality,

lifestyle and more.

A team of more than 80 journalists providing trusted analysis, news and opinion, reaching

the trend setters, opinion leaders and decision makers transforming the region‟s business

landscape.

One of the largest online communities in the Gulf, with an average of 1.5 million unique users

each month. Marketing campaigns delivered on ArabianBusiness.com reach educated, high

net worth individuals with the disposable income to maintain their lifestyle, ideal for both

business-to-business and business-to-consumer programmes.



ArabianBusiness.com





5. Methodology and sample

5.1. Methodology The Econsultancy State of Digital in MENA Report is based on a survey of more than 500

client-side and agency respondents. Information about the online survey was emailed to

Econsultancy’s user base of internet professional and marketers, and promoted online via Twitter

and other channels during February and March 2011. The incentive for taking part in the survey

was access to a complimentary copy of this report just before its publication on the Econsultancy

website.

The survey is run in partnership with ArabianBusiness.com, and supported by other media

partners, including mediaME and AMEinfo.

Econsultancy and ArabianBusiness.com would like to thank those who took the time to complete

the questionnaire, as well as mediaME and AMEinfo for their support. If you have any questions

about the research and methodology, please email Econsultancy's Research Manager, Aliya Zaidi

([email protected]).

5.2. Respondent profiles A total of 510 respondents took part in the survey, including 173 “client-side professionals or

marketers” and 219 “supply-side” respondents (including agency marketers and those working

for technology vendors or other service providers). Client-side respondents also include

respondents who work for publishers and in government.

For the purposes of this report, we have carried out separate analysis for both these groups and

the distinction is abbreviated to “companies” (including publishers, not-for-profit organisations

and respondents working in government) and “agencies” (including vendors).

5.2.1. Respondents

Figure 1: Which of the following most accurately describes your job role?

Note: client-side marketers also include publishers and those working for government.

Respondents: 510

mailto:[email protected]




5.2.2. Geographic location

The majority of respondents (over half – 54%) are based in the United Arab Emirates. Some 10%

are based in Saudi Arabia, while 7% are from Egypt. The next most prominently featured

countries are Lebanon (6%), Jordan (5%), Kuwait (3%), Bahrain (3%) and Qatar (3%).

Figure 2: In which country are you (personally) located for work?

Respondents: 515

5.2.3. Job roles

The chart below shows that the survey has a very senior audience, as just over a quarter (26%) of

respondents are business owners, C-level executives or heads of marketing. Some 16% are heads

of digital or e-commerce (13%), or of a single digital channel (3%). Just over a quarter of the

respondents (27%) are marketing managers, while 14% are business analysts or strategists.

Companies Figure 3: Which best describes your job role?

Respondents: 206




5.2.4. B2B / B2C focus

The chart below shows to what extent businesses are focused on B2B, B2C, or both. Some 30% of

respondents are exclusively focused on B2B, while 42% are B2C-focused. Just over a quarter

(27%) are focused on both B2B and B2C.

In terms of the agencies, only a minority exclusively work with B2B clients (10%). Some 40%

work with B2C clients while half (50%) say their clients are both B2B and B2C focused.

Companies

Figure 4: Is your business focused more on B2B or B2C?

Respondents: 187

Agencies

Figure 5: Typically, are your clients focused more on B2B or B2C?

Respondents: 181




5.2.5. Industry sector

As seen in Figure 6, almost a fifth of respondents (19%) work in the publishing sector, while 10%

work in government or in the public sector.

Some 9% of respondents work in telecommunications, while 8% work in media. An additional 8%

work in travel or entertainment, while 6% of respondents work in retail.

„Other‟ in this context includes IT, construction, consumer electronics and real estate.

Companies

Figure 6: In which industry or sector does your organisation operate in?

Respondents: 147







5.2.6. Type of agency

The chart below profiles the type of agencies surveyed, and indicates that over a quarter (28%) of

supply-side respondents work for a full service digital agency. Just under a quarter (23%) work

for an advertising agency. Some 15% of respondents work for a media agency. Respondents who

said „other‟ includes other communications agencies, market research consultants and

management consultancies.

Agencies

Figure 7: What type 0f company do you work for?

Respondents: 176







6. Findings

6.1. Marketing budgets

6.1.1. Annual company revenue

The chart below shows the annual revenue of company respondents. At the upper end of the scale,

three-quarters of respondents (76%) work for companies with revenues of over $1 million.

Some 14% of respondents work for companies with annual revenue of more than $1 billion. Just

under a quarter of respondents (24%) work for organisations with revenue of under $1 million.

Companies

Figure 8: What is your annual company revenue?

Respondents: 184







6.1.2. Increase in overall marketing budgets

Companies that are increasing budgets were asked by how much they expect their overall

marketing budgets to increase. On average, companies expect to increase their overall budgets by

23%. This compares to an average of 30% in the UK, according to the Econsultancy / SAS

Marketing Budgets Report 2011.

The vast majority (91%) expect their budgets to increase by up to 40%, with almost a third (29%)

saying they expect budgets to go up by up to 10%. Over half of companies (52%) said they expect

an increase in the region of 11% to 30%.

At the other end of the scale, 6% say they expect a 91% to 100% increase in overall marketing

budgets in 2011.

Voice of the expert – SAMPLE QUOTE



Professor, King Fahd University of Petroleum and Minerals

Voice of the agency – SAMPLE QUOTE



Account Director, Socialize






6.2. Use of marketing channels

6.2.1. Offline marketing channels

Looking at offline channels used for marketing, printed media comes out on top, with over two-

thirds of companies (69%) using newspapers and magazines for marketing. Live events are also

popular in the Middle East, as substantiated by the 62% of survey respondents who say they use

conferences or other events for marketing.

Companies

Figure 9: Which offline or „traditional‟ marketing methods or channels do you use

for marketing?

Respondents: 196

Voice of the client



Digital Marketing Manager, Jumeirah





Table 1 shows the breakdown of response by companies who are focused on B2B, B2C, or both.

Newspapers and magazines and live events and conferences are the most frequently used

channel by B2B and B2C companies, as well as organisations that are focused on both.

Table 1 - Offline channels by B2B vs. B2C focus

Which offline or ‘traditional’ marketing methods or channels do you use for marketing?

B2B B2C Both equally

Newspapers / magazines X % X % X %

Live events / conferences SAMPLE SAMPLE SAMPLE

Direct mail - - -

Outdoor advertising - - -

Radio - - -

Television - - -

Telemarketing - - -

Fax distribution - - -

Voice of the agency – SAMPLE QUOTE



Account Manager and Research Officer, Socialize

1.1.1. Online marketing channels

The chart below shows that a range of online channels are used for marketing, with email being

the most frequently used, according to 80% of responding companies. Email marketing performs

well as there are many metrics available to measure success, and marketers are able to

demonstrate tangible ROI from the channel.








6.3. Barriers to digital marketing and e-commerce

6.3.1. Barriers to greater investment in digital marketing

Asked about the three biggest barriers to digital marketing, some 28% of respondents reported

that company culture and reliance on traditional marketing were major obstacles.

Companies Figure 10: What are the biggest barriers preventing your organisation from investing more money in digital marketing?

Respondents: 179

Note: respondents could check up to three options.

Voice of the client – SAMPLE QUOTE



Head of Digital, AMEInfo / Emap Middle East





6.3.2. Barriers to increasing digital revenue

In an open-ended question, companies and agencies were asked about the single biggest barrier

to increasing digital revenue streams.

The most important barriers to increasing digital revenue are:

Lack of knowledge about digital

Lack of knowledge – SAMPLE QUOTE



Company respondents





6.3.3. Local issues holding back e-commerce

Companies and agencies were also asked about any specific local issues holding back e-commerce

in the region. Language barriers were frequently cited, particularly with regards to a lack of good

Arabic language solutions.

In UAE in particular, there is a broad mixture of cultures, which means a wide variety of different

languages and dialects are spoken in the region.

Language barriers

“A complete lack of good Arabic-language solutions. What is in place now are Arabic speaking ad execs and

marketers who think simply translating is enough.”



Company and agency respondents





6.4. Measuring marketing effectiveness

6.4.1. Proportion of overall revenue driven by digital channels

6.4.2. Metrics to measure marketing effectiveness

The chart below shows how companies in the Middle East measure marketing effectiveness. Most

companies use hard, tangible metrics such as sales and ROI to measure effectiveness. Slightly

fewer employ softer brand metrics, such as reputation, advocacy, and brand recognition.

Companies Figure 11: Which metrics do you use to measure marketing effectiveness?

Respondents: 176




Sample the-state-of-digital-marketing-in-the-middle-east-and-north-africa

Technology

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traditional

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annual company

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increasing

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