- The MENA region is home to the second-largest mobile phone population in the world, but the region’s mobile advertising spend is the lowest among all regions.
- Weak mobile marketing infrastructure – lack of smartphone penetration and mobile- and tablet-compatible websites – in the region is one of the key reasons for this dichotomy.
- Lack of high quality (engaging) and Arabic content is the second key inhibitor to the growth of mobile advertising in the region.
- However, with mobile advertising in the region poised to grow from $50 million in 2013 to $340 million in 2017, MENA brands that are able to get their mobile strategy right, and create mobile marketing infrastructure and content tailored to consumer needs will emerge as winners.
The MENA region is home to the second-largest mobile phone population in the world. As per the Global Media Intelligence Report by eMarketer, at 525.8 million, the Middle East and Africa had the second largest mobile phone population in 2013. This was way ahead of developed economies like North America and Western Europe (both had <350 million mobile phone users), and was behind only the Asia Pacific (APAC) region, which stood at 2.5 billion+, thanks to significant contributions from populous countries like China and India. In addition to the growing mobile phone users, smartphone users in MEA went up from 67 million in 2012 to 112 million in 2013, increasing the penetration of smartphones among all mobile phone users from 5.1% to 8.3% in the region.
However, despite a large and fast growing mobile phone population, MENA’s mobile advertising spend is the lowest among all regions in the world. While the region stands second in overall mobile phone usage, its advertising spend on the same platform comes last among all the regions. As a result, in 2013, the region contributed just $50 million to a global mobile advertising spend of $15.8 billion. That represents 140% growth compared to 2012 spending levels, but is far behind regional totals elsewhere in the world. North America, which has the lowest mobile population among all regions stood first with a >50% share in the global mobile advertising market. Even other emerging markets like Latin America ($150 million) or Central and Eastern Europe ($162million) outsized the MEA region on this metric.
|Table 1: Mobile Phone Users by Region (Millions, 2011-17)|
Source: Trendsmena, eMarketer
|Table 2: Mobile Internet Ad Spending by Region (USD Million, 2011-17)|
Source: Trendsmena, eMarketer
As puzzling as the above situation may seem, the reasons are not hard to find.
First of all, mobile marketing infrastructure – smartphone penetration and mobile- and tablet-compatible websites – in the region is not up to global standards. Smartphones support internet-based applications and are the basic platform required for mobile advertising; on the other hand, age old feature phones that do not support such applications are not conducive for internet-based mobile marketing and can only be used for sms marketing purposes. Now, despite its fast growth, smartphone penetration in the region is still a meagre ~8%, much lower as compared to other regions (smartphone penetration in the US is >60%). This explains why despite the advantages of internet-based mobile advertising, SMS campaigns still remain the most popular form of mobile marketing in the region.
In addition, while MENA brands have taken to digital marketing on social media platforms like Facebook, most of them still lack websites that are compatible with mobiles and tablets. This is a major drawback since click-through rates (CTR), a measure of how well a campaign has done, are higher for mobile (0.5%) as compared to those for other digital campaigns (0.2%) in the region, as per mobile advertising agency AdFalcon. The lack of infrastructure is also highlighted in a recent study by Deloitte & BPG, which found that majority of MENA brands are still developing the required infrastructure (responsive design websites, apps, e-commerce platforms, etc.) to market themselves on mobile platforms; as a result, the value of online advertising is 40 times higher than mobile in the region.
|Chart 1: Mobile Marketing Infrastructure in MENA||Chart 2: Brand Lifecycle Stage in MENA|
Source: Deloitte, BPG
Despite the current situation, mobile advertising presents a great opportunity for brands that are able to get their mobile strategy right, and create content that is tailored to consumer needs. A report by marketing agency RBBi and Addictive Mobility, a Canada-based mobile advertising company, found that smartphone and tablet users in the GCC are six times more likely to “click through” to advertisers’ websites on their devices than their counterparts in the U.S., and >80% of these click-throughs were made via links embedded in online videos, while 3% came through advertising links on social media networks.
Leading experts opine that for MENA brands to leverage the above opportunity, mobile advertisements will have to move from irrelevant banners and pop-ups to carefully crafted ads that are in-line with the utility app that the consumer is using on his smartphone. To understand consumer preferences, brands will have to use consumer analytics and geo-location services, and create a different set of ads tailored to each target set. Further, mobile advertisements need to be short (20-30 seconds) and engaging in the form of a short video or a game, and should offer incentive to the user to click through.
With the mobile marketing spend in the region expected to rise from $50 million in 2013 to $340 million in 2017, brands that focus on the above aspects stand to benefit from the growth of the overall digital and mobile marketing market in MENA, as depicted by the case study below.
|Case Study: Effective use of Mobile Advertising to Introduce the New Ford Explorer in Jordan|
Duration: 3 week | Mobile Marketing Agency: Ad Falcon
Source: Ad Falcon