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19 March 2024

Digital is big player in crisis-hit market

Sixteen per cent of advertisers at the OMD Predicts event admitted to being totally obsessed with digital media. (AFP)

Published
By Dima Hamadeh

Statistics continue to flow persistently into the local and regional market, further establishing the dominance of digital on future consumer and advertiser trends, with media buying agencies such as OMD and its sister company, PhD, drawing their predictions from the global media landscape.

'OMD Predicts', a gathering of media and advertising professionals that took place in the UAE yesterday, was no exception, envisioning the future as a fluid, focused and fast network of user-generated and imposed content, commentary and interaction. The event offered further proof of the growth of digital, despite analysts' foreseeing slower growth than that forecast during the initial hype in the influence of digital media.

Peter Kirwan, Media Editor, Wired UK, who spoke on technology and media at the event, said this slower growth was due to challenges in the transition from traditional to digital media, and the still comparably healthy figures of print media in markets outside the US.

Yet, more than 50 per cent of advertisers attending the event, acknowledged the importance of digital media. Sixteen per cent of them admitted they were totally obsessed with digital media to the point where nothing else mattered.

Speakers included Nick Tapley of OMD; Robert Powell, Editor, Economist Intelligence Unit Middle East and North Africa; Jody Turner, Founder and trend forecaster, Culture of Future; Kirwan; and Dimitri Metaxas, Regional Executive Director, Digital, Omnicom Media Group.

Metaxas spoke of new expectations and the response to future developments within the large context of change. He said: "Future trends are an extension of present realities in which the economic crisis, as well as the internet and mobile connectivity and social networking phenomena are influencing the Western world and consequently sending a ripple effect across this region."

Metaxas explained that these factors have made consumers in the region more selective, with 32 per cent of them keen on comparing prices, and 23 per cent preferring to do their purchasing transactions online – a rate that has doubled from around 10 per cent seen 12 months back.

"This, in a crisis situation, has made websites such as Dubizzle.com and Souq.com big names in the market. According to an Omnicom Media Group study, three out of four consumers reported to have evolved in terms of media and consumption of media and products," added Metaxas.

He added that another factor shaping the future was the growing accessibility to online media, with the region's internet population expected to grow to 100 million users in 2013 from 57 million at present. Almost 60 per cent of internet connections in the region are broadband, and in the UAE and Saudi Arabia, around 25 per cent of users are connected to wireless devices.

Metaxas used statistics to establish that the future would be unreliable on the human element when it comes to information analysis. "The future trend is speed, where information is provided, processed, analysed and optimised in real time. This depends on systems that are capable of providing accurate information, deciding the target audience, and performing measurement and analysis."

In terms of marketing, Metaxas predicted that the future would see a shift from tactical campaign planning to ongoing committed planning that involves a 360 degree practice across 365 days a year.

Metaxas' views concurred with Turner's and Kirwan's. Turner, a strategic trend consultant for countries, communities and companies seeking brand, consumer and business innovation knowledge, said: "Future trends will tend towards a hi-tech, hi-touch crowd competing world, where creative change is the most attractive proposition, and the product experience is what people demand."

Kirwan, on the other hand, said that the current world was not yet going to forsake print for digital, despite digital's growth trend.

With regional market figures depending on US market trends for a comparative baseline, Kirwan pointed out that the US market was an atypical representation of media trends. "Compared with other markets like Japan, the UK, Sweden and Turkey, the US exclusively shows an 80 per cent reliance on advertising revenue compared to copy sales. The rest of the markets still depend on sales for revenue."

He added: "While the US has seen a plunge in ad revenues for print media during the crisis, Turkey has seen a growth that exceeded 50 per cent." Comparing the viewership of print with digital, he concluded: "Print in the UK, for instance, has a viewership of 20.4 million people on average per day, while websites range between three million and 3.3 million. In this market, newspapers have a total of 200 million minutes of viewership a day, compared with 53.8 million minutes for online."

However, Kirwan acknowledged that a switch to digital will gradually take place, in order to cut down on printing and distribution costs which currently eat up to 40 per cent of the expenditure on print media, while 25 per cent of the cost goes to the editorial. "Based on this transition, production costs can be dropped and eventually, 40 per cent of a budget would go to editorial in online media. Would this switch take place in 2015 as predicted? It might only take place in 2020. But, the digital switch is surprisingly close."

Meanwhile, Kirwan saw innovations such as the iPad as a means for encouraging consumption, or rather, a certain mode of consumption of media. Between the analog and digital, the change, according to Kirwan, would be in a shift from mass to niche, from big campaigns to small campaigns in a fragmented media reality, from brand messaging to conversation and from human memory to persistence of search.

However, the question that is still to be answered in light of these changes, is whether pay walls would succeed in securing revenue.

Attendees at 'OMD Predicts' were almost equally divided on whether pay walls on digital content would drive away users (41 per cent) or offer an alternative revenue (38 per cent).

Pay walls, along with the monetisation of social networks, remain the main challenge in the process of channelling revenue into digital media.

A recent discussion among industry experts at Click 4.0 conference, saw a mixed attitude towards paid content, especially in the region, which currently suffers from the scarcity in Arabic content, which is estimated at one per cent of the total online content.

Although digital enthusiasts saw Arabic content could be a revenue-making asset to an online medium that could generate revenue, others argued that imposing pay walls would not be useful, as users in the Arab world still have to face challenges with secure online payments, credit card penetration in addition to disposable income in a majority of the Arab countries.