Human Traffic

The Middle East’s internet advertising market is yet to fully mature. However, as more people get online, local companies are beginning to use the web as an effective way to acquire new customers.

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By  Matthew Southwell Published  June 1, 2003

I|~||~||~|The political unrest that currently blights the Middle East’s tourist trade has forced its hotels to investigate new and innovative ways of drumming up business. One of the most successful has been Dubai’s Le Royal Meridien, which has turned to online marketing to tempt customers through its doors.
Through a series of e-mail shots, the property has attempted to raise the profile of its numerous food & beverage outlets and then turn this increased awareness into real business.

“In the current situation you have to depend on the local market [for most of your business]. We have been doing a lot of e-marketing and to begin with we have been focusing on e-mail shots. We have been sending them out to our UAE database with the aim of getting these people to come and sample our outlets and then to become loyal customer,” explains Jaideep Bhatia, marketing & communications manager, Le Royal Meridien. “At this point in time, e-mail is a good way of communicating with the local market because it is more cost effective than print advertising. It allows you to hit a greater number of people and you can be sure that the message gets through,” he adds.

Despite Le Royal Meridien’s new found enthusiasm for internet based marketing campaigns, the online advertising market remains immature throughout the Middle East. Anecdotal evidence of this comes from the Internet Advertising Bureau, which has tried to establish a local arm of the industry association on a number of occasions, but failed due to a lack of interest.
Essentially, few companies in the region either understand the medium or know how to use it properly.

||**||II|~||~||~|“Internet advertising in the Middle East is a developing market. The region is new to this game and it still has to go through the education process,” says Chris Humphrey, sales director of Alt-media, which is a division of netlink and holds the license for Klipmart in the region.

“The market is still maturing and there have been a lot of people that have only done online advertising because it was there and they felt they had to it. It has all been a bit ‘me too’,” adds Mike Platts, creative partner at North55.

Despite this inauspicious start, the situation may be changing as a number of factors have begun to drive the market forward. Firstly, there is the relative failure of other advertising mediums in the region, such as television, to deliver outstanding results. As such, local companies are still looking for a delivery channel that truly gives them a high return on investment (ROI).

“The TV audience here [in the Middle East] is very fragmented and doesn’t really exist. As such, TV advertising is not very effective here and it is expensive. There is, on the other hand, a well defined internet audience that companies can target,” explains Jason Martin, strategic planner, Alt-media.
Furthermore, while audiences for television and many print publications have reached a plateau, the number of potential consumers on the web is growing. For instance, Madar Research predicts that by the end of 2005 internet penetration in the GCC will grow from 9.23% to 19.76%.

“The amount of consumers in the Middle East that are using the internet is going up. Even though the figures are quite healthy at the minute, it is one of the few markets that has not reached is top penetration point. This means that there is a big audience out there,” says Bhatia.

“Although the internet is a youngish [sic] media it has a huge reach, even compared to television. Also, the arguments of the past that said it [the web] is just a niche audience are not true. That’s a very 90s view and today the internet reaches far more people,” adds Danny Meadows-Klue, president of IAB Europe.
In addition to addressing a wider audience, advertising on the internet also allows companies to target users more effectively. Through the careful analysis of user demographics, advertisers can establish which site will allow their creative to reach the maximum number of potential customers.

||**||III|~||~||~|“Interactive is one of the few truly accurate ways of being able to segment your audience across the Middle East’s markets. Although you may have a pan-Arab campaign you can still tailor the creative to suit each country while keeping the central theme. It gives you extra flexibility and more opportunity to address your target audience,” explains Platts.

Furthermore, by interacting with customers and potential clients online, companies can achieve a one-to-one relationship with users and then communicate with them via e-mail. This ensures that the marketing messages are getting through to the right person, while also giving the user the freedom to choose when exactly they absorb the information.

“Companies are looking at it [online advertising] as a way to drive traffic and acquire more customers… Permission based e-mail marketing is a popular marketing tool [because] it is targeted towards a person that is more likely to be acquired as a new customer,” confirms Timothy Hickernell, senior programme director, web & collaboration strategies, Meta Group.

The ability to communicate more effectively with existing and potential customers has encouraged an increasing number of companies in the region to begin investigating and using the internet as an advertising tool. For instance, in addition to Le Royal Meridien, BMW has appointed a specific online marketing manager and rolled out a series of online ads, while Emirates Airline has already run a number of successful campaigns.

“We have run a number of campaigns… and we use everything from standard banners, to overlays, such as Eyeblasters, interstitials and streaming video… The ultimate goal [of online advertising] is to get permission from people to allow us to market to them via e-mail,” says Will McCallum, internet communications manager at Emirates Airline.

||**||IV|~||~||~|One of the airline’s most high profile campaigns was its online promotion of its frequent Flyer programme, Skywards. Based on creative designed by North55 and distributed by Impact Proximity, the campaign took the form of a multi-movie Flash floating ad with a reminder. It ran on a number of high profile sites both locally and abroad, including itp.net, telegraph.co.uk and asiaone.com.

“Skywards was the first campaign that we did that used over lay technology extensively. Furthermore, we were the first people to run it on some international sites, such as the Times and the Telegraph in the UK and the Sydney Morning Herald in Australia,” explains McCallum.

The entire campaign cost around US$260,000 and delivered exceptional results. Overall click through rates (CTRs) were 16.83%, 20,000 prospects registered for information and a further 2000 users signed up to the loyalty programme as a direct result. In terms of the bottom line, the campaign generated a ROI of 391%.
“The results were unbelievable, especially when compared to the average 0.3-0.4% CTR for standard banner adverts,” says Andy Patton, manager of product development & marketing at Emirates.

Following the success of the Skywards campaign, Emirates has completed a number of other initiatives to communicate new routes or certain promotions. For example, when it launched its Casablanca service last year, Emirates ran an online campaign to promote it.

“When we unveiled our route to Casablanca last year we ran a destination and competition campaign online to promote the service. Again, it was successful,” comments McCallum.

||**||V|~||~||~|One of the key factors in Emirates ability to garner good results for its online campaigns is its selection of prime online real estate, as this guarantees that the airline is addressing its target audience. As McCallum says, “media is the key to it all.”

“Media, and the amount of information the media owner has, is the most valuable thing [in online advertising]… The value that we have had from sites like ITP.net, Timeoutdubai.com and Maktoub is that these sites have very clearly defined audiences,” he continues.

“The online real estate an advertiser selects is very important and their media strategy is key… If you want to do a targeted campaign you have to pick the right sites and, although you can tweak campaigns online once they are live, you have to have it in the right place to begin with,” confirms Klipmart’s Martin.
However, while smart media buying and engaging creative will boost the likelihood of success, yet more is needed to ensure that results such as Emirates’ ROI of 391% becomes the rule rather than the exception. The simple reason for this is that consumers are becoming more sophisticated and used to internet adverts. The novelty has worn off and better creative is needed to achieve the eyeballs advertisers desire.

“People have become desensitised to ‘in your face type’ advertising,” comments Meta Group’s Hickernell.

Further evidence of this comes from the growth in anti-spam software. Designed to work in a similar way to antivirus software, it will prevent pop up ads launching in a user’s browser or stop third party content appearing in e-mails.
“There is a lot of new software on the market that blocks spam e-mails and can stop internet adverts [from launching]… For example, Microsoft Office 2003 has a version of Outlook that can block third party links from e-mails,” explains Hickernell.

However, internet advertisers are aware of the growing resistance to online advertising and the increased sophistication of users. As such, they are developing a number of strategies and tactics to overcome the problem. From the strategy side, companies are no longer running with web only campaigns. This allows them to hit the target audience in a number of different ways and at varying times.

||**||VI|~||~||~|At Emirates, for example, online initiatives are always supported by offline activities and, while the creative may differ, the brand values remain.
“During the height of the internet bubble, online advertising was seen as the be all and end all of advertising. This is not the case now as the market has matured and people now realise that to get value across the entire [customer] spectrum, they have to look at the entire [advertising] spectrum,” says McCallum. “This is why we generally don’t tend to run an internet campaign as a stand alone entity… If you want to advertise an international airline you have to produce a fully integrated campaign,” he continues.

In addition to broadening their go to market strategy, advertisers and content creators are also looking at new technologies to keep users interested. Meta’s Hickernell says that, globally, the current trend is for sponsored web links on search engines, as they achieve substantially higher CTRs than older technologies, such as banners. However, Platts says this tactic has yet to emerge in the local market and companies such as North 55 are looking to make better use of existing resources and improve upon the local market’s current fad, floating ads.

“The floating ads were working very well in terms of CTRs last year. However, the edge has been taken off them due to their overuse and sometimes inappropriate use. Where we are edging to at the minute is doing as much on the page as possible in terms of greater data capture,” he says.

“For example, we are looking at expandable banners that give you more [online] real estate to play with. It means that you can grab someone’s e-mail address while you are there and then market to him or her later. I think it will be particularly effective because you are not asking people to leave what they are doing on the site,” he continues.

Others, such a Klipmart, are helping advertisers re-purpose their TV content to develop streaming video for e-mails and web sites. Emirates has already tested the technology and garnered a 30% return on 100,000 e-mails. “We sent out 100,000 e-mails with embedded Klip-Ads and received over 30,000 responses, making it our most successful e-mail campaign yet… We [were] really happy with the results,” says McCallum.

The closer integration of television and the internet appears to be the future of online advertising. Klipmart’s Martin is convinced of this and the company’s technology is geared up for this trend. Platts agrees, to a certain extent, but feels that it will be sometime before it hits the Middle East.

“Interactive television is the way forward. However, before it comes here [to the Middle East] the local stations need to accept it,” he says.

However the technology develops, the overall goal must be to create online adverts that interests the user and prevents them from switching off. As Emirates’ McCallum says, “the dream is that users see adverts that they want to see. If they are relevant then they are not intrusive. One advert selling something that the user wants is worth hundreds of those that do not.”||**||

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