The Middle East’s broadcasters are struggling to drive significant revenues from web-based services. Isam Bayazidi, head of the region’s largest online advertising network, ikoo, reveals his advice for broadcasters looking to generate some internet income.
Online advertising is taking hold in western markets and the trend will envelop the Middle East sooner or later. A recent study in the US found that more than half of advertisers using internet platforms intended to increase their budgets for advertising based around content websites.
This represents a clear sign that broadcasters have an opportunity to create valuable advertising space. They also have the unique opportunity to tie this together with their other media platforms.
They can also use their experience and creative heritage to develop attractive and engaging opportunities for advertisers.
The challenge facing broadcasters is to alter and adapt ingrained processes and preconceptions to place themselves at the front of the queue with online advertising clients.
“If a broadcaster doesn’t understand the value that having its content online can add, then it could be threatened by it instead,” says Isam Bayazidi, CEO of ikoo, the largest online advertising network in the Middle East and North Africa. “They could view it as competition to their own TV channels and the direct sales on those. In reality, this is unlikely to be true.”
So what trends in online ads do broadcasters need to be aware of in order to squeeze additional revenues from the platform?
“The most recent shift in the market has been the move away from traditional display ads that mimicked those we see in the print industry, towards interactive advertising. This allows the consumer to take part and contribute to the message or the brand that the advertiser is seeking to develop,” explains Bayazidi, citing the example of a snack manufacturer in the US.
“They asked the public to make their own ad for the product and to post it online. The winning video would then be used as the company’s Superbowl ad. There was a huge response and sure enough a user generated advert was shown on a US $9 million ad spot during the Superbowl that year.”
According to Bayazidi there have been only a handful of similar campaigns in the Middle East despite internet penetration levels in the region surpassing mass market levels.
“The media buyers, the creative agencies, publishers and the broadcasters all have to play a part in educating the market about online advertising. I know the strengths of TV and of online also and if the two work together then they can create a more rounded communication and message for the public. Some advertisers are starting to understand that it is not a matter of online or TV, outdoor or radio, it is about the best way to deliver the same message over all these platforms.”
Bayazidi says there are several action the broadcast industry can do to ensure a bigger piece of the pie.
“There needs to be more content online for this region. Not as a substitute for TV – traditional TV viewing will always be there at the forefront – but in order to allow people to watch programming on their own terms.
“You can consider the internet as the world’s largest on demand platform. At some point we will see the consumption of online content increasing in the Middle East too. MBC shows some of its top shows online once they have aired. Al Jazeera has been putting content on YouTube for several years and has a very popular YouTube channel. Some of the players here are making moves. In a few years time there will be a much wider availability of content online then viewership will increase significantly. I believe the content must come first, however. There is a disproportionate volume of Arabic content versus the number Arabic web-users, a huge shortage. The TV production houses and all the content providers have a big part to play in helping that to grow.”
There are several strong examples of profitable online content portals in other markets offering broadcasters several routes to extra revenue. ABC has posted episode of Lost on iTunes after airing. They are ad-supported and attract several million views each week. Network can offer the same using their own websites or opt in to collective schemes, such as Hulu.
There are few such offerings in the Middle East.
“I don’t see this as a barrier,” says Bayazidi. “International platforms such as YouTube can and are working for broadcasters in this region and elsewhere. At the same time, the content owners could be playing a bigger part. It is not difficult for them to develop their own platform for distributing and streaming content to users.”
Simply making content available is not enough in itself to create a viable business model for broadcasters based on internet advertising.
“They also need to start giving more power to this content and to their own websites,” says Bayazidi. “In other markets you see channels consistently driving traffic for their sites and urging viewers to get more background or to take part in forums and so on. This doesn’t happen nearly as much on the major channels in this region.”
The third step for broadcasters once they have developed the portal and the audience, is to drive awareness among the advertisers themselves and encourage them to use digital platforms in tandem with their TV spend.
“I don’t see any activity along these lines in the Middle East today. The proportion of online revenue versus TV revenue is currently very small for the major broadcasters in this region,” claims Bayazidi adding that this is not especially worrying given the maturity of the sector.
“The TV industry is still young. It is still in the development stage whereas elsewhere in the world they are moving into the transformation phase.”
If the TV industry is young, then the Middle East’s internet is even younger. Penetration is expanding faster in this region than any other, but according to Bayazidi sheer numbers alone are not enough.
“The internet is used mainly for communication and social networks in this part of the world. The main challenge is to create the content that means it can be used for research, education and content consumption. If the growth of the internet in this region is to be sustained, the content problem must be addressed.”
This problem is not purely the domain of those working exclusively on the internet. The web is an untapped distribution channel for most broadcasters in the Middle East, and this is as much a problem for them. A problem that will only get worse is left unaddressed.
Distinguishing between traditional forms of media and new media is no longer particularly helpful, says Bayazidi.
“Discussing a disconnect between the two is not something I like to do. The trend that is emerging elsewhere is that the TV networks are becoming the central point for online and broadcast media.”
With well-known brands and mass audiences already in place it should not be a surprise that the established broadcasters that have embraced the internet have done very well.
“This [success] has happened once they stopped thinking of their own websites as something additional and started thinking of it as part of their core strategy.”