Show us where the value is

There’s money out there for online advertising, but dot-coms are going to have to work very hard to encourage agencies and marketing managers to spend it

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By  David Ingham Published  January 9, 2001

Introduction|~||~||~|Karen Bellwright, marketing manager for Compaq Computer Middle East and Africa, plans to significantly increase the proportion of marketing budget that the company will spend online in 2001. Acting partly on her own convictions and partly in line with corporate directives, she reckons she’ll probably double Compaq’s online marketing spend in 2001. “Compaq has a very strong Internet focus, so our goal is to be seen there very prominently just like in any other advertising medium,” says Bellwright.

Emirates Airlines is also a healthy spender on online advertising. It put around 9% of its total communications budget into online activities in 2000, a figure that will likely rise to 14% next year. “It’s very important to recognise the Web for what it is,” says Mike Simon, director of corporate communications, “…that it’s another medium. It is another way of reaching a potential customer that may fly with Emirates.”

The question is whether or not Emirates’ and Compaq’s embrace of the Web as a marketing medium is indicative of a regional trend. If it is, then that’s good news for dot-coms that will ultimately rely on marketing dollars as their primary revenue driver. If, however, they’re exceptions and the bulk of the region’s marketing managers are going to stick firmly with offline marketing channels, then a lot of dot-coms could be in trouble.

||**||Visitor data needed|~||~||~|In order to grab a share of regional marketing budgets, dot-coms are going to have start doing a few things better. Advertisers will only use Web sites that can convince them, through detailed visitor data, that their target market is being reached. “We cannot waste money and there are millions and millions of sites,” says Emirates’ Simon. “The ones we’re choosing have convinced us that they’re reaching the market we target.”

In this respect, Rohit Misra, regional managing director at advertising agency Euro RSCG, thinks dot-coms could certainly be doing better. He’s met with the management of plenty of Web sites, but he didn’t feel they gave him quite what he needed to plan online campaigns for his clients. “We get fantastic figures on page views, but that’s pretty much meaningless because you’re not going to look at the Internet as a broad reach tool,” says Misra.

Therein, lies the crux of it. If an advertiser wants to do a blanket, catch-all branding campaign, he’s far more likely to go for print, TV or billboard than the Web. A Web site, on the other hand, is a way of reaching a specific target market. So to paint a convincing argument, Web sites need to very clearly articulate who they reach and provide more information about those people — where they log on from, at which times of day, how old they are e.t.c.

If they can do that, Misra believes that they have a powerful argument. “Arabic is a language that runs across the entire region, so you have a story,” he says. “If you can back that up by mining your data and getting into specifics in terms of [user] age groups, qualifications, the time a person spends on a Web site, then you’ll find that the move [to online advertising] will begin to start happening.”

Mona Farah, head of online marketing at interactive expert, The New Media, also stresses the need for dot-coms to provide agencies like hers with visitor data. “Targeting is required, similar to a traditional plan,” says Farah. “We want to know who uses a site, what their lifestyle is, where they go to on the site and which channels they use.”

The New Media has been involved with a marketing campaign to promote Hewlett-Packard Middle East’s new Web site. The campaign used both online and offline advertising channels, and in the case of online Farah went with Maktoob because it was able to provide her with the visitor data she wanted.

||**||Third party tracking|~||~||~|Providing the detailed data that advertisers want isn’t easy though. If you’re Arabia.com, for example, you have enough venture capital behind you to be able to invest in expensive software like Vignette that can track visitors and build sophisticated traffic profiles. But if you’re not blessed with abundant VC funding, you need an alterative way of monitoring your traffic that doesn’t cost you a fortune.

Step up Click2 Advertising, a joint venture between Web site designer, Cyber Gear, and advertising agency, The Big Idea. Click2 has invested up to $1 million in Double Click technology in a bid to create a Web site traffic monitoring network for the Middle East.

The idea behind Click2’s network is that Web sites will sign up and allow Click2 to closely track their Web site traffic. Armed with that data, Click2 can make recommendations to its advertising clients on where they should spend their online marketing budgets. The sites themselves, of course, get audited readouts on their traffic that they can use to firm up their advertising pitches.

Click2 co-founder, Sharad Agarwal, says there is a desperate need for such data. When Arabian Business.com visited him, he had been in talks with a cosmetics company that wanted to use the Web to reach women and a maker of luxury furniture that wanted to hit affluent surfers.

Without data on site traffic, it’s all the more harder for him to place those clients’ adverts. That’s why Web sites, he believes, will have to allow their traffic to be monitored. “They will have to register with us if they want to generate advertising revenue through us,” says Agarwal. He says around one hundred sites have so far signed up with him.

Euro RSCG has launched a similar service to Click2 in India and Rohit Misra says he envisages bringing it here, although he didn’t offer specifics. Mona Farah at The New Media also suggested the need for a similar service. “This region needs a third party to review sites,” she says.

||**||Online advertising evolves|~||~||~|Providing potential advertisers with detailed traffic data isn’t the whole story, however. Dot-coms also need to bear in mind that what constitutes online advertising is changing.

Whilst few of the people interviewed by Arabian Business.com are prepared to say outright that the banner is dead, they are certainly looking for online marketing methods that more effectively engage and impress readers. Sites that are most flexible in offering this to prospective advertisers will benefit the most.

Take Compaq as an example. The company spent much of last year experimenting, buying a few banners on a number of sites and seeing what click though rates were like. Based on those findings, it’s going to formulate a campaign for 2001 that should go way beyond banners stuck on sites at strategic locations. “We’ll do some [banners], but the key goal for us is to become partners with these sites,” says Karen Bellwright.

One example is what Compaq wants to do with its online ordering system. Bellwright envisages providing links to it on major transactional sites, such as shopping portals. Another possibility she’s looking at is sponsoring heavily visited areas of Web sites, such as chat areas.

This helps Compaq brand its consumer products to the mass market. With its enterprise and technical products, it would choose an entirely different vehicle. “It’s how you use [the medium],” says Bellwright. “Banner advertising is old news. I’m optimistic about the approach that we’re taking.”

Some dot-coms have already cottoned on. AME Info is one that certainly saw the wind coming. “Online advertising is not synonymous with banner advertising as many think,” says Lars Nielsen, sales director at AME Info, stressing the word ‘not.’

He says AMEInfo.com offers nine different types of site advertising, including site sponsorship, newsletter sponsorships, e-mail broadcasting, keyword sponsorship and many more. “Be creative out there,” Nielsen urges. “Invest in new and more exciting products and then allow your clients to combine these for the most effective packages.”

Being creative and hitting a certain audience is something that Emirates Airlines’ Simon stresses. Emirates has an extensive network of its own Web sites, where it’s frequently used competitions and promotions to attract both the mass audience and the youth audience.

One successful recent promotion was a competition to win an extreme sports holiday. The interactive site, emirateschallenge.com, attracted 35,000 competition entrants who each spent several minutes on average on the site.

When it comes to reaching a specific market segment, however, like the frequent business traveller, Simon has used a lot of third party sites. The list includes names such as CNN, Bloomberg, The Times and regionally, AME Info. He says he selects these sites in, “exactly the same way we work with traditional media. We are choosing vehicles that have the right audience for Emirates.”

Simon also makes clear that advertisers and dot-coms should see the Web for what it is: “another way of reaching a potential customer that may fly with Emirates.” The Internet is best used, he says, as a way of reinforcing an offline marketing campaign.

If the offline brand isn’t already strong, he fears the effectiveness of an online marketing campaign could be seriously diminished. “The most successful advertisers on the Internet are those that already have a brand,” says Simon. “You can use the Internet to help you establish a brand, but you can’t establish a brand on the Internet.”

The fact that the Internet reaches such a wide audience could count against it in some cases. Take Emirates Bank, which operates in the UAE and currently only wants to focus on its home market.

Mohammed Al-Jallaf, manager of electronic banking services, says he’s looking at advertising online, but will really only go in big when the bank begins to expand outside its home market. “The idea of online advertising is a part of Emirates Bank’s strategy for the future, but a small part until we become more global,” says Al-Jallaf. “When we get more customers from [across] this region, then we will consider the online approach more seriously.”

Ominously for local dot-coms, Al-Jallaf identifies Yahoo as a great way of reaching a pan-regional audience. “Yahoo will pick up anybody in this region from the IP address and start marketing to them through online ads, which would let us reach people in Egypt and Saudi,” he says.

||**||The agencies' role|~||~||~|Whilst it’s becoming clearer what dot-coms have to do to make their offerings more attractive to advertisers, are the advertising agencies aware of the possibilities offered by this new medium? As advertisers often act on the recommendations of their agencies, dot-coms need to make sure that the benefits of the Internet as an advertising medium are explained to agencies.

Compaq’s Bellwright says that both agencies and advertisers are “all learning,” reinforcing the need for strong agency/client relationships. “Everyone globally is learning how to work with this tool,” she says, adding that her agency partner now has an Internet specialist.

Click2 Advertising, however, is less complementary about the level of online knowledge at the region’s big agencies. It was this lack of knowledge, Sharad Agarwal says, that encouraged him and partner The Big Idea to create Click2.

“The whole knowledge level of all these agencies needs to improve,” says Agarwal. “Once they are up to speed, they can in turn tell their clients what they should be doing. Today they don’t, because they don’t know.”

Mona Farah at The New Media echoes Agarwal. “Worldwide, they [large advertising agencies] have huge departments that deal with interactive, but here I think hardly any have an interactive section,” says Farah.

That could possibly create a situation where clients ask their agencies about online advertising but are steered away from it. “[Advertisers] know it exists but they need agencies to come and convince them that they will really benefit,” she adds.

AME Info is one dot-com that questions the level of online knowledge at the region’s agencies. “They are very insecure when it comes to the Web and instead of admitting this they, I am sure, tell their clients not to spend on this ‘very immature and un-proven media’,” says Lars Nielsen. He does believe the situation is getting better however and identifies some specific agencies that have been investing in online advertising and are getting to know the medium much better.

||**||Conclusion|~||~||~|So will online advertising ever take off in the Middle East? The marketing managers and agencies interviewed by Arabian Business.com have shown an interest, but they’re not going to rush into it overnight.

They need more in-depth data on site traffic than they’re getting currently and they need dot-coms to be more imaginative about the type of advertising they can offer. Dot-coms can also help push the whole concept better by going out and telling marketing departments and agencies what they can offer them.

The big question is whether or not many of today’s dot-coms will be able to keep going long enough to bring in the money that they need to survive. They could certainly help themselves, however, by doing more to articulate the benefits of online marketing and the case for their own Web sites. ||**||

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