Mena online ads may grow 3 times faster than world's

The Middle East and North Africa (Mena) region is likely to lead the world in online advertising as industry leaders predict that regional internet advertising will grow about three times faster than the global rate.

Responding to a global survey report, which says that worldwide online advertising will continue to outpace traditional advertising revenues this year, Dimitri Metaxas, Executive Regional Director – Digital, OmnicomMediaGroup, said the Mena region will see more than 30 per cent growth in online advertising in the next three-five years.

"As per our estimates, Mena region growth would be up to three times versus the global rate," said Dimitri.

Explaining the rational behind his estimate, he added: "Our region is still playing catch-up and is experiencing real momentum for digital investments as more advertisers and agencies are embracing these technologies. Regional talent has always been the biggest challenge for our industry and now we are witnessing the development of junior experts coupled with an influx of international talent and this is helping to drive the growth.

"Also, the recession has proved to be a big turning point for digital advertising and this has served as a catalyst in accelerating the growth rate."

The international report from IPG's Mediabrands' Magna Global said that online advertising will climb 12.4 per cent in 2010 to $61 billion (Dh224bn). And it will grow 64 per cent from there to more than $100bn in five years.

Magna said online advertising will rise by 11.7 per cent in 2011, an average rate of 11 per cent through 2015. Overall, worldwide advertising estimates have been pegged at low-to-mid-single-digit gains in 2010. The company estimates that North America will see a 12.3 per cent increase in online advertising to $27.2bn in 2010, hitting $45.2bn in 2015.

For the Mena region, Metaxas forecasts more than $100 million in 2010, with more positive estimates revealing a total market of up to $140m by end of the year.

"This would represent four-five per cent of the total ad spend across the region and marks the first year where digital investments are a sizable piece of the pie. We don't see this rate of growth slowing over the next three-five years," said Metaxas.

Currently, the Magna report said, paid search continues to be one of the strongest components of all online advertising, roughly accounting for half of the $29.8bn in revenues worldwide. It is pacing up 16.5 per cent over 2009 results.

In North America, Magna estimated, paid search to be at $13.1bn for 2010, a 16.4 per cent gain. All other online advertising – display, e-mail, video – will grow more slowly, 8.7 per cent higher, to get to $31.2bn worldwide.

Latin America will continue to be the fastest-growing region, noted Magna – reaching $3.5bn of total supplier advertising revenue in 2015, on an average rate of 13.3 per cent growth over the next five years. The biggest specific markets – China and Russia ¬– will experience the greatest gains.

Responding to a question whether regional companies are increasing their digital investment because of aping the developed world or that companies such as Omnicom are educating the potential of this platform to their clients, he said: "I would say it is a combination of both, we cannot underestimate the hype around new technologies and how they can excite marketers to want to experiment. There has been a true inflexion point with a growing base of advertisers more willing to explore and learn what the new technologies can do for them.

"In addition to this, the growth in regional expertise [both agency and media side] is assisting these advertisers to ensure that their forays into these nascent opportunities are successful and this in turn drives further growth."

Metaxas believes that digital is not a must-have platform for all products and brands. "I would always hesitate advocating a 'good for all brands' recommendation as it really depends on a host of factors.

"We still work with a number of advertisers who are successful and digital media plays only a relatively small role in the communications mix, though I would state that we now see successful brands active in the digital space representing all industries and categories [including FMCG] so long gone are the arguments that digital should play a role for specific industries.

"Most importantly, no brand can ignore this space and must realise that at some point it will represent their future, hence we always advocate a test and learn approach as the learning they gain now, will pay dividends in the future."