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.

Paritosh Kashyap Page 1


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.



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



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.



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.



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)



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



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)



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:



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:



Other Local Sites

Other International Sites

Facebook

NETLOG

Jeeran

Linkedin

twitter

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:



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 .



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.


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 $


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.



Facebook

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.



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.



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)



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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