digital media in mena
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Digital Media in MENA
Digital Media in MENA
Introduction
The competitive dynamics of the media industry is getting transformed throughout
the world. All across the globe, the popularity of traditional media channels such
as print media, TV broadcast and Radio broadcast is going down and is getting
replaced by the digital media. Not only is the digital medium encroaching upon the
space of the traditional media but also changing the dynamics of revenue model so
far enjoyed by the traditional media.
In the digital media itself lot of changes are happening. The traditional boundaries
between media companies, telecom operators, handset manufactures and internet
service provider is getting blurred. Everyone is encroaching upon each other’s
space.
The digital media in the Middle East and North Africa (MENA) is still in its nascent
stage, as compared to other developed parts of the world such as Western Europe
and North America however given the fact that huge investments are made in ICT
infrastructure- internet and mobile penetration are increasing at a rampant speed
and a new wave of political change is happening all across the region- digital
media has a huge potential to grow in the coming time. The following report
intents to do an analysis of Digital media, its present state and its future prospect
in the MENA region.
Advantages of digital media:
Digital media offer some unique advantages which traditional media such as TV &
Radio broadcast and print media cannot offer. Some of the unique advantages
are:-
Economical: Digital media is very economical. Having a brick and mortar
shop will cost a lot; in contrast having a web presence is much cheaper. It
does not cost much to develop and market a website.
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Digital Media in MENA
Curtails geographical barriers: One very remarkable feature of digital
media is its accessibility from any part of the globe. Geographical barriers
often create challenge for traditional media sources such as newspaper and
magazines in disseminating information, but digital media with virtual
presence could be accessed from any part of the world.
Content can be consumed as well as produced at the same time: With
the help of web 2.0 platforms, content can be viewed/consumed as well as
produced at the same time. Web 2.0 provides two way communication
platforms. Not only does it communicate directly to the end users but also
allow the consumers to share their opinion, feedbacks etc.
Consumer Insights: With the help of web based analytics, digital media
can give a lot of detailed insights, pertaining to consumer behavior and
consumer demographics- consumption pattern, duration, geography etc.
One remarkable feature is that, all such valuable data could be obtained at a
negligible cost.
Target Marketing: Digital media helps in capturing the target audience.
Disadvantages of Digital Media:
Along with advantages digital media also has its own disadvantages such as
Revenue from advertisements is not easy in the digital media. It’s easy to
have a web presence/ digital presence, but it is as difficult to generate
revenue out of it. Monetization of digital media is a challenge throughout the
globe.
Generating revenue always takes a large amount of time. Revenue follows
after creating a sizeable customer base. For instance even Facebook took
five years to break even. The revenue from marketing could be generated
only after securing huge customer base.
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Digital Media in MENA
Not everyone is very comfortable with digital media, especially when it
comes to money transaction. A large number of individuals are wary of
transferring money over the internet. More over the web medium has also
been the source of lot of frauds.
Consumers expect a lot of free content on the web. When it comes to paying
for the content, many individuals are not very willing to pay. They just want
stuffs for free.
DIGITAL MEDIA: Global trends
Globally more than 50% of the internet consumption comprises of 5 nations: USA,
China, India, Brazil and Russia. As described earlier a lot of creative
rearrangements are happening in the media sector across the globe. Some of the
major global trends in the digital media are as follows (Morgan Stanley, 2009)
E-commerce: major products which are purchased online globally are-
computer products, electronic items, event tickets, hotel bookings, tour
packages, books, music/video etc, toys etc.
Consumptions of internet on mobile are catching up fast with consumption
on desktop. According to Morgan Stanley report, by 2013-14 more users will
be consuming internet via mobile devices rather than desktop computer.
Social Media: Social media users are surpassing the regular email users.
People refer spending more time on social media rather than on regular
emails.
Adoption of newer and better telecom services such as 3G will further
consolidate the stronghold of mobile medium.
Digital media in Middle East
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Digital Media in MENA
In contrast to other parts of the developed world, digital media in MENA region is
still not very matured; but is surely one of the sectors, which is poised for a high
growth in the coming time. As a region MENA has its own advantages and
challenges. Presently there are 65 million internet users in the MENA region which
is expected to increase to 80 million by 2012. (AMIR, 2011) Other than global
heavyweights such as Google, Yahoo, Facebook and regional players such as
Kooora, Maktoob etc; the region is also witnessing the arrival of online marketing
firms such as Al click, Eastline Marketing etc.
Advantages of Middle East
The Socio Economic structure of the entire Middle East has lot of inherent
advantages, which can boost the growth of online media companies in the region.
Some of them are (Booz & Company, 2009):
A uniform, homogeneous market: The Middle East might have many
small nations, across the region but all share the common Arab heritage and
enjoy high degree of commonality across various socio-cultural dimensions.
The Middle East could be considered as a homogeneous mixture of around
300 million individuals. The idea of uniformity becomes more apt in case of
digital media because; unlike regular media such as print and broadcast
which are restricted to national boundaries due to regulatory barriers;
online media can have a pan Arab presence.
High mobile penetration: Large amount of digital contents are being
viewed with the help of mobile devices. MENA region enjoys a high degree
of mobile penetration with states like UAE and Saudi Arabia enjoying a
mobile penetration of 200 and 125 percentages.
High literacy rate: Many of the MENA states are taking education, high up
on their agendas. Some of the MENA states enjoy a high degree of literacy.
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Digital Media in MENA
For instance: collectively the six gulf state enjoys a literacy rate of more
than 75 percentages.
Several MENA nations are extremely rich: Many of the oil rich MENA
nations, especially Gulf States are extremely rich and enjoy high GDP per
capita. For instance: Qatar, where per capita GDP is around US $ 78,000.
By 2015, Gulf States and Egypt are expected to have 13 million households
in middle to high income brackets.
Investments in the ICT infra-structure: MENA nations are realizing the
urgency of economic diversification. One thing which is high up on their
agenda is ICT infrastructure. All across the MENA huge investments are
being made to develop state of the art ICT infra structure.
Demographics: Younger generation is more inclined towards the digital
media. 55 percentages of Arab population is less than 25 years of age which
shows that there is a huge potential for the digital media to flourish in the
Arab world.
Challenges for digital media in Middle East
Along with advantages, Middle East also has lot of challenges providing hindrances
to the growth of digital media in the sector.
Low broad band connectivity: It is expected that broadband connectivity
will increase in the coming years; but the present penetration of 12
percentages is much lower than other developed parts of the globe.
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Digital Media in MENA
Africa
MENA
Asia Pacific
Latin America
Eastern Europe
Western Europe
North America
0% 10% 20% 30% 40% 50% 60% 70%
2%
12%
19%
20%
23%
61%
64%
Fig 1: broad band penetration in different geographies. Source: Arab Media
Outlook 2009-13
Dissimilarity in ICT infrastructure across the region: Notwithstanding
the common socio cultural heritages, there is a high degree of economic
asymmetry across the whole region. There are various economic entities-
cash rich small Gulf States, North African bigger states like Egypt and
Morocco which are comparatively more integrated with the world economy,
developing states like Jordan and Syria with almost no oil and reserve and
states like Libya and Algeria with high oil deposits but high population as
well. This asymmetry is also reflected in a wide range of economic
parameters such as mobile penetration, internet penetration, broad band
connectivity, kind of network technology being used etc. For instance, in
emerging markets like Syria and Sudan broadband penetration is less than 1
percentage; in Morocco and Jordan it is 12 and 15 percentages respectively
where as in rich Gulf States like UAE and Qatar it is 69 and 84 percentages
respectively. This inherent heterogeneous nature of the ICT infrastructure
across the region makes it difficult for organizations to adopt a single digital
marketing strategy. (Arab media outlook 2009-13, 2009)
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Digital Media in MENA
Gap between presence and revenue: business models do not make any
sense, until unless it cannot guarantee constant stream of revenue. In the
MENA region, companies are finding it tough to en cash their digital
presence. For instance: 85 percentages of Arab newspapers have digital
presence but digital media constitutes just 2 percentages of their
advertising revenue.
7537
23290
Mobile ContentOnline ContentMobile AdvertisingOnline Advertiisng
Fig 2: Shows the breakup of digital media revenue (in US $ million) in the MENA
region, for 2009. (Source: Booz & Company)
8% 6%
25%
61%
Rich MediaEmailSearchDisplay/ Sponsorship
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Digital Media in MENA
Fig 3: Percentage wise break up of online advertisements in MENA region. Source:
Booz & Company, 2009.
7%
93%
DisplaySMS/MMS
Fig 4: Percentage wise break up of mobile advertisements in MENA region.
Source: Booz & Company, 2009.
Online shopping activity is abysmally low: according to a research
conducted by Neilson (comprising of 1,246 individuals from four countries-
UAE, Egypt, Lebanon and Saudi Arabia) less than 1 percentage of
individuals prefers engaging themselves in online shopping. (Arab Media
Outlook 2009-13 , 2009)
Monetization of the online content, which is somehow a challenge all across
the globe, is quiet challenging in the MENA region. The prevalence of a cash
based culture and low penetration of credit & debit card penetration makes
it more difficult. (Arab Media Outlook 2009-13 , 2009)
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Digital Media in MENA
Internet consumption behavior of MENA users
In order to analyze the prospect of digital media in MENA region brief overview of
internet consumption behavior of people from the region, might be helpful. In
order to realize the same , research conducted by Effective Research in
conjunction with Spot on PR have been refered. (The research was conducted over
a base of 2587 individuals, out of which 69 percentages comprised of Egyptians
and 20 percentages comprised of individuals from GCC. )
Listening Radio
Downloading
VOIP Calls
Watching Videos
Online Games
Emails
Social Networking
Chatting
News Content
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
1%
3%
3%
4%
6%
8%
14%
15%
43%
Fig: shows the common activities on internet in the MENA region. Source: Neilson,
the survey comprised of 1,810 individuals from 4 countries- Egypt, Saudi Arabia,
UAE, and Lebanon.
Education level of individuals surveyed:
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Digital Media in MENA
No Ed
ucation
Primary
Seco
ndary
Graduate
Post Grad
uate
Trade C
ertificat
e0%
10%20%30%40%50%60%
1% 2%
23%
57%
12%5%
Percentages of re-spondents
Fig 5: shows the education level of respondents surveyed in terms of percentages.
Source: Effective Research and Spot on PR.
Place of internet access
Home Work Internet Café Education Institution
On the Move0%
10%20%30%40%50%60%70%80%
77%
14%5% 1% 2%
Percentages of Re-spondents
Fig 6: shows the place of access of internet of the respondents in percentages.
(Source: Effective Research and Spot on PR, 2010)
Respondent’s, Usage of Social Media Platform:
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Digital Media in MENA
Other Local Sites
Other International Sites
NETLOG
Jeeran
Maktoob
koora.com
0% 10% 20% 30% 40% 50% 60% 70%
13%
15%
70%
18%
5%
5%
9%
13%
22%
Respondent’s daily consumption of other media channels.
TV
Radio
Newspaper
Magazine (weekly)
Internet
Mobile Application
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
71%
27%
43%
47%
88%
54%
Fig 7: shows percentage of correspondents consuming various media channels on
a daily basis (in case of magazine, weekly figures have been taken.) Source:
Effective Research and Spot on PR.
Disposition towards Internet Marketers:
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Digital Media in MENA
Highly Positive
Positive
Neutral
Negative
Highly Negative
0% 5% 10% 15% 20% 25% 30% 35% 40%
17%
32%
36%
9%
6%
Fig 8: respondent’s disposition towards internet marketers.
Important Conclusions:
Important conclusions, drawn from the report are as follows:
Majority of internet users from the region seems to be graduate or above.
Hence it indicates a strong correlation between education and internet
consumption.
Internet is primarily used from home.
Facebook seems to be very popular across the region. The tremendous
popularity of Facebook is followed by other local brands such as Kooora,
Maktoob etc.
Internet users from the MENA region simultaneously use a wide range of
other media channels as well, such as newspaper, magazine, radio, TV,
mobile applications etc simultaneously .
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Digital Media in MENA
Challenges for Digital Media:
Less ad spending on digital media: So far digital media contribute a
miniscule share of just 2 percentage of overall ad spending in the MENA
region. In 2008, the digital advertisement investments per capita in the
MENA region was just US $ 2 compared to the global average of US $ 27.
(Booz & Company, 2009)
Fig 9: shows per capita digital ad spend across various countries in 2008. Source:
Booz & Company, 2009.
Internet penetration is comparatively low: internet penetration is
increasing in the Middle East region at a very fast pace and the present
penetration of 28.8 percentages is higher than the global average of 26.6
percentages. Although when compared with other developed parts of the
globe, it appears to be very low.
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India
China
MENA
Brazil
Russia
France
USA
UK
0 10 20 30 40 50 60 70 80 90 100
0.15
1.9
2
2.2
4.9
22
64
96
Per Capita Investment in US $
Digital Media in MENA
Africa
Asia
Middle East
Latin America
Europe
North America
0 10 20 30 40 50 60 70 80
8.7
26.6
28.8
31.9
53
76.2
Internet Penetration in Percentages
Fig 10: shows internet penetration in various geographical regions (Source:
Internet World stats, 2010)
Social media angle
The report on digital media in the MENA region will be incomplete without
understanding the “Social Media” angle. Social Media is one of the fastest growing
segments of media in the MENA. Not only it is essential for business in present as
well as in future; but also plays a pivotal role in socio-political sphere of the region.
The best exemplar could be the latest Arab revolution, which started from Egypt &
Tunisia and spread across the entire region. Social Media sites such as Facebook
and Twitter played a major role in the revolution, eventually forcing the incumbent
governments to step down. In a wide range of activities such as- creation of
popular pages such as “We are all Khalid Said”, were aimed at- addressing
political concerns of the common people, communicating across the user network
to stage a mass protest on 25th January to post revolution analysis and public
opinion building on key issues.
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Digital Media in MENA
Facebook or FB is the most popular, social media in the MENA region, very much
in line with the general popularity, it enjoys across the globe. The region has
somewhere around 15 million FB users, with GCC countries accounting for some 5
million users (Spot On, 2010) Other than English, other popular versions of FB are
French and Arabic.
50%
25%
23%
2%
EnglishFrenchArabicOther
Fig 11: Shows the percentage wise break up of FB users in the MENA region.
Source: Spot On
The Arabic interface has been added in March, 2009. It helped FB capturing a
whole new range of user segment. With a year of its inception, it added 3.5 million
users to the existing base. The French version of FB has a total of 3.7 million users
and is more popular in francophone countries such as- Algeria, Morocco and
Tunisia etc. The top five user communities of FB in the region are- Egypt, Saudi
Arabia, Morocco, Tunisia and UAE. These five countries comprise of 70
percentages of FB’s market in MENA region.
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Digital Media in MENA
22%
15%
12%11%
10%
30%
EgyptSaudi ArabiaMoroccoUAETunisiaOthers
Fig 12: percentage wise break up of FB using population of various MENA nations.
Source: Spot On
Conclusion
As discussed earlier, the online media/digital media segment in Middle East is in
its nascent stage but the future seems to be bright. The following factors will
drive/influence growth of digital media in the future:
Young Demographics will influence growth: one of the biggest
advantages of MENA region is its young demographic. More than 55
percentage of population is aged less than 25. This young generation will be
heavily influencing the growth of digital media in the region.
Broad band penetration: broad band penetration, especially in
comparatively bigger states like Egypt and Saudi Arabia will drive growth of
digital media in the region.
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Digital Media in MENA
Europe could be a role model: Digital media has enough presence in both
social as well as economical spheres of the region however the
advertisement revenues are still not very high. In this regard Europe of
2000s could be perfect role model, when the advertisements revenue where
low there as well. But the growth of broadband and mobile penetration
pushed it further. With increasing broadband penetration and adoption of
better mobile technologies, MENA can undergo the same growth
trajectories.
360 degree branding: Like other parts of the world, the future of media in
the region, lies in having a 360 degree presence- communicating with the
audience at a wide range of touch points, such as print, TV, radio, outdoors,
mobile, web etc. The brands need to continue communicating through
regular media channels but at the same time web/digital presence is
required as well.
Arabic and local Content: in order to digital media (as well as other
media sources to an extent) to succeed, it is essential to develop local
content. According to survey conducted by Neilson, 62 percentages of
respondents prefer browsing the web in Arabic rather than English; but the
region has dearth of Arabic/local digital content. (Unlike newspaper, where
90 percentages of content are local in nature). In spite of the fact that
international brands like Yahoo and Facebook enjoy a high degree of
popularity in the region due to their brand value and 1st mover’s advantage;
penchant for local content both on and off the web cannot be discounted. In
order to succeed in the coming future, it is essential to emphasis on the
development of more and more local content. This requires funding, govt.
support as well as developing local talent. (Arab Media Outlook 2009-13,
2009)
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Digital Media in MENA
Creating right cultural environment for web entrepreneurs to
succeed: In order to develop the online media sector in Middle East, a
possible step could be developing something similar to Silicon Valley. This
will help nurturing young talents to develop web based start ups. In the
MENA region one possible role model could be Jordan, which is taking
similar initiatives. Jordan is transforming itself into a knowledge economy
by- generating 6000 ICT graduates every year, attracting venture capital for
web based start ups and taking a comparatively tolerant stand on media
sector including the blogosphere. (Arab Media Outlook 2009-13, 2009)
Nurturing Talent: one of the most essential pillars for developing the
digital media in the region could be having the right talent base. Though
many of the Arab/ Gulf countries are taking initiatives, there are further
room for improvement. The students from the region need to be trained on a
wide range of subjects such as- digital media, gaming, animation etc.
References
1> Morgan Stanley, 2009, Internet trends report
2> Arab Media Outlook 2009-13, 2009, simulating local content in Arab Media
Industry, p-169
3> Arab Media Outlook 2009-13, 2009, simulating local content in Arab Media
Industry, p-172
4> AMIR, March 2011, P-3
5> Booz & Company, 2009, Winning in MENA new media scene, p-
6> Booz and Company, 2009, Winning in MENA new media scene, p-17
7> Arab Media Outlook 2009-13, digital media, p-68
8> Spot On, 2010, Middle East and North Africa Facebook demographics.
9> Arab Media Outlook 2009-13, digital media, p-169.
10> Arab Media Outlook 2009-13, digital media, p-181
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Digital Media in MENA
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