By :Aliya Zaidi
The latest research from the Middle East by Econsultancy indicates that the digital industry is experiencing rapid growth.
The State of Digital Marketing in the Middle East and North Africa report (supported by ArabianBusiness.com)
shows that on average, 27% of of overall marketing budget is spent on
digital, up from 22% since tBhe last report was published 10 months ago
in April 2011.
Overall, 58% of companies are planning to increase their digital
marketing in 2012, and of these, 52% plan increases of at least 20%.
Despite the impressive growth rate, there's still a long way to go,
as beyond restricted budgets, company culture, reliance on traditional
marketing and the lack of skills are holding back marketers from making
the most of the digital opportunities in the region.
In addition, the inability to measure return on investment is thought
to be a barrier by 28% of marketers this year, up from 19% in the 2011
survey.
In an interview with AMEinfo, published earlier this week, Econsultancy's CEO Ashley Friedlein said the digital industry in the Middle East was five years behind the UK and US:
Broadly speaking, the appetite, interest and growth within digital is very buoyant and the percentage of digital spend within a marketing budget has gone up from 22% last year to 27% this year. These are encouraging signs.
That said, I think clearly the market feels like the UK was five or six years ago in terms of the maturity of businesses and agencies. Not many companies have big teams dedicated to digital and a lot of what they're doing is experimental. So it's just a little bit less mature, though in some areas, like social media, [the Middle East] is actually not far off where the UK is, I would say.
The State of Digital Marketing in MENA report shows that company culture is preventing 29% of companies from investing further in digital, indicating that some companies may be slow to adapt to the changing digital environment.
The tools and technologies are clearly there, but there also needs to
be a change in the broader organisational structure, including focusing
teams around digital, which may take longer to be addressed. There also
needs to be a shift in mindset, as company culture may prevent
organisations from acquiring senior management buy-in, holding back
further investment in digital.
One sign of the industry's developing maturity is that marketers are
increasingly focused on return-on-investment and what this means in the
context of their own business.
In this year's survey, 54% of companies indicated that their
understanding of ROI was excellent or good, while 17% said it was poor
or very poor. In comparison, in 2011, 64% of companies said
understanding of ROI was excellent or good, while only 8% reported
understanding to be poor of very poor.
Though on the surface it may seem that understanding of ROI is
worsening, the reality is that as their knowledge develops, marketers
are much more aware of what they could measure and metrics that are
important for assessing marketing value.
Consequently their perception of their own understanding of ROI
becomes much more realistic. A similar pattern can be seen in UK
research, which shows that marketers become increasingly less confident
in their understanding of ROI as the industry matures, and measurement
of multichannel campaigns and attribution becomes more complicated.
The results of the State of Digital Marketing in MENA report were
presented by Ashley Friedlein earlier this week at Econsultancy's second
annual Digital Cream Dubai.
Monitoring Twitter during the event allowed us to look at real-time feedback
about the research as the results were presented. As digital is
inherently measurable and provides a wealth of built-in metrics, some
expressed surprise that so many marketers are still grappling with the
question of how to measure return on investment.
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