Out of the box

Digital platforms offer advertisers new methods of reaching potential customers, in a more valuable and efficient manner. John Parnell spoke to ad agency OMD Digital about some of these new opportunities and the changing relationship between content and advertising.
Dimitri Metaxas, group director, OMD Digital.
Dimitri Metaxas, group director, OMD Digital.

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Digital platforms offer advertisers new methods of reaching potential customers, in a more valuable and efficient manner. John Parnell spoke to ad agency OMD Digital about some of these new opportunities and the changing relationship between content and advertising.

In the Middle East, the combination of piracy together with the now vast availability of media on the internet, has forced ad agencies and media companies alike to find new ways to present advertisements in a way consumers will embrace.

Developing captivating content represents only half the challenge - advertisers must then also be convinced that these new platforms, increasingly digital, are in fact adding value to their marketing pitch.

 

"One application that cellular advertising offers up is location-based services... the technology is available now. Saudi Arabia is the first market [in the region] to promote these services. The technology allows you to identify a user's location in relation to the position of the mobile repeater stations. - David schilling, OMD Digital director of planning."
 

"If a client is to launch a digital advertising campaign, the first thing they must consider is how the campaign is going to be accepted by consumers. Typically, the client wants to deduce the 'measurability' of the ad format," says Dimitri Metaxas, group director of OMD Digital.



"Companies invest huge amounts of money in econometric modelling and developing complex algorithms to tell them what contribution a particular advertisement may have made to their sales. Those methods are still very important but what we can do now in the digital space is offer a more direct measurement. That ability has enabled us to get our foot in the door. The next level is to involve clients that perhaps cannot benefit from this direct measurement."

For multinational companies, digital advertising provides opportunities to achieve a new degree of interaction with consumers rather than selling the product directly via a digital source.

Metaxas is confident that digital advertising offers greater potential in this field compared to traditional advertising methods.

"No matter how many times you drive past a billboard, even if it's thousands of times, it is still a very limited form of interaction. The way brands can engage with consumers is key and of course with digital, that interaction is now two-way," he adds.

OMD Digital recently launched the first campaign in the region for in-game advertising. This new platform for ad space demonstrates the emerging media landscape and the shift of eyeballs from TV to alternative platforms. The advantages, both in terms of audience and revenue growth, are obvious.

OMD's recent campaign for Saudi telco Mobily leverages some of the best facets of digital advertising. Mobily are one of three mobile phone operators challenging in what is a very competitive domestic market.

"Together, they have been buying a very large proportion of the ad space in Saudi and they are running out of things to buy [sponsor]," claims Metaxas.

"The way it has worked previously, one company would sponsor a football team and then all the others would follow suit. We wanted to come away from that and do something on a new channel that was a bit more pioneering."

 

In-game advertising

Effectiveness survey

Massive, the Microsoft subsidiary responsible for developing the technology used in OMD Digital's in-game advertising campaign, recently commissioned new media research firm Interpret, to study the effectiveness of in-game advertising.

Interpret conducted detailed research on behalf of Massive and four of its clients, including a quick-service restaurant (QSR) brand promoting a tie-in to gaming and a specific menu option and a confectionary company marketing new creative material for its candy bar brand.

Across all game genres and advertisers surveyed, the research revealed that on average, 70 percent of gamers agreed with statements that the dynamic in-game ads "contributed to realism", "fit the games" in which they were included and looked "cool."

Among those gamers exposed to the QSR ads in Need for Speed Carbon, a racing title published by Electronic Arts, 39 percent said they would ultimately recommend the QSR brand to others compared to the control group.

Furthermore, 17 percent assigned the QSR brand the highest possible brand rating compared to the control group.

Meanwhile, fifty-six percent of all survey respondents agreed that the advertisements added realism to the game-play environment.

Interpret was also commissioned to survey responses to a branding campaign by the global confectionary company executed in "NASCAR 08," also published by Electronic Arts.

Seventy-five percent of gamers recalled the candy bar in-game advertising, with 56 percent recalling the specific ad creative. Within the test group, 72 percent agreed with the statement that the candy bar is "a great snack to eat while playing video games," an increase of 29 percent from the control group; the proportion agreeing that the candy bar "gives you energy" and "is cool" rose 24 percent and 21 percent from control group to test group, respectively.

"The depth of this research reflects Massive's commitment to offering advertisers an understanding of how in-game advertising can impact brands across game genres and advertising categories," said Cory Van Arsdale, CEO of Massive.

"As the in-game medium matures and establishes its position on media buying plans, advertisers and agencies are eager for insight into creative nuances and best practices for maximising its impact. We view this type of guidance as an essential part of our role as an industry leader and innovator."

Video games remain under the radar for the vast majority of advertisers in this region.

"The gaming technology itself is not new. The difference nowadays is that the consoles are connected to the internet. That's essentially what has opened the door to dynamic advertising developments. Previously, you had to have your ad programmed into the game from the outset and it would appear in every version of the game regardless of where it was sold. That is not going to appeal to an organisation such as Mobily."

"One fundamental concept is that the console does not have to be connected to the web for the ads to appear during the gameplay. The console connects intermittently in order to download updates and within that it may download a packet of ads. Studies so far have shown that gamers react favourably to this as it creates a more real-life experience. As long as you don't take away from the experience or interfere with the gameplay. But if we are talking about someone passing a drinks machine and it says Pepsi on it instead of Jumbo Cola or something generic, people prefer that. It's more realistic," he concludes.

 

The click-through rate for online advertising [in the Middle East] is around 0.5 percent [compared to] 0.25 worldwide. This may seem irrelevant, but given the quantity of online banner ads in the marketplace, it could mean the difference between 50,000 and 100,000 visitors to a particular site. - Dimitri Metaxas, group director of OMD Digital.

The Mobily campaign centred on the company's youth orientated Fallah offering.

Ads were inserted into Xbox and PC games including Guitar Hero, Need for Speed, and Tony Hawk's Wasteland among others.



"The campaign was not about reaching a mass audience and generating a huge response," says Metaxas. "It was about reaching a select group of influential kids and young adults, and showing them this brand is cool by saying 'we understand gaming and we are in your environment'."

There are signs that the commercial opportunities associated with video games are being recognised in the region with ADMC and Warner signing a $500 million deal for games production and UAE-based Colourblind Entertainment releasing a free video game based on its Sami action hero franchise.

Given the lower internet penetration rates in the region it might be assumed that online advertising, the most developed form of digital advertising, is not held in particularly high regard in the Middle East.

Metaxas says consumers in the region are in fact very responsive to the medium and advertisers are increasingly embracing the internet.

"The click-through rate for online advertising is typically twice as high as the global average. Worldwide this rate is around 0.25 percent whereas in the Middle East it is 0.5 percent," he says.

"This may seem irrelevant, but given the quantity of online ads in the marketplace, it could mean the difference between 50,000 and 100,000 visitors to a particular site," explains Metaxas.

Despite the higher click-through rates in the region, the acquisition rate - the number of people making a purchase off the back off the advert - is below the international average.

"This suggests consumers are a little bit more click happy and perhaps more curious," claims Metaxas.

"Maybe that's because the market is not so saturated. The online ad spend here is about $1 per person compared to around $25 in the United States. So an individual here is being exposed to far fewer adverts than someone in the US, which makes them more likely to respond, but when it comes to the end point, they are less likely to buy it. That doesn't mean that consumers here aren't buying anything, just not as much."

 

Location-based services

Mobile advertising

OMD Digital's director of planning, Philip Schilling, believes mobile advertising will prove the next big platform for advertisers.

"You have to adopt a more careful approach when developing cellular advertising services. I still receive spam from my service provider to sign up for Blackberry which I already have. They're also aware of what handset I use.

"One application that cellular advertising offers up is location-based services. For example, if you are a regular customer at a coffee house and you happen to pass by one of their stores, the retailer could send you an SMS to guide you to the location.

"The technology supporting location-based advertising services is available now and it is something we will be seeing a lot more of in the future. Saudi Arabia was the first market to promote location-based services. The technology allows you to identify a user's location in relation to the position of the mobile repeater stations and narrow their location down to a few hundred metres. However, the services that we are talking about are accurate to five metres if a user's phone is GPS-enabled," says Schilling.

"Globally, most people replace their handsets every two years, but in the Middle East, this figure is closer to six months. This means there are more consumers in the Middle East with access to the latest generation of mobile handsets, which makes the market primed for these types of services."

Metaxas also recognises the commercial potential of cellular-based advertising, stressing that the Middle East consumer trend towards technically advanced handsets meant the region was primed for the development of cutting-edge advertising services delivered via 3G platforms.

"Certain marketers have misused the internet horribly with media-rich overlays and pop-up ads everywhere and they almost shot themselves in the foot and killed the opportunity before it had started and this is what's happening on mobile right now," claims Metaxas.

"Users are getting spammed left, right and centre. There's no mobile marketing association or trade body that can go to telcos and request they stop it and remind them that in the future they're going to be reliant on the technology for revenue."
 

The commercial importance of digital advertising is likely to increase for broadcasters as subscription services become increasingly unpopular and consumers are encouraged to embrace new content delivery platforms.

"In the future we expect content to be made available free, and generally, regardless of the platform, it will be heavily subsidised by advertising," claims Metaxas.

This point is pertinent for those in the broadcast industry today.

 

We have consulted with representatives from MBC and Al-Arabiya and we stressed to them that long-term they should strive to become branded content providers. - Dimitri Metaxas, group director of OMD Digital.

Subscription services are unpopular, adverts are unpopular, but given the choice consumers would typically prefer to sit through an advert than put their hand in their pocket to pay for a subscription.

While traditional advertising platforms remain relevant, the return on digital advertising, with its improved targeting and potentially greater penetration, presents a potentially more reliable source of income.

Metaxas explains that banner advertising simply represents the first stage of development for online ads and expects branded content to take the leading role in the future.



OMD's branded content division, Fuse, has recruited several professionals with a background in production. Metaxas also says that as ad agencies become more involved in production they could begin to look at copyright sharing.

"We're predicting the future lies more in the branded content space," he says.

"Consequently, we would be looking to secure enhanced deals with broadcasters such as MBC, which are in a prime position to benefit from these types of opportunities. Now it is a question of re-formatting and re-packaging that content for these new platforms. We have consulted with representatives from MBC and Al-Arabiya and we stressed to them that long-term they should strive to become branded content providers."

"Future success is all about content, content, content. Industry types have been declaring this for years but now they are actually realising the strategy's true potential."

 

In-game advertising

Effectiveness survey

Massive, the Microsoft subsidiary responsible for developing the technology used in OMD Digital's in-game advertising campaign, recently commissioned new media research firm Interpret, to study the effectiveness of in-game advertising.

Interpret conducted detailed research on behalf of Massive and four of its clients, including a quick-service restaurant (QSR) brand promoting a tie-in to gaming and a specific menu option and a confectionary company marketing new creative material for its candy bar brand.

Across all game genres and advertisers surveyed, the research revealed that on average, 70 percent of gamers agreed with statements that the dynamic in-game ads "contributed to realism", "fit the games" in which they were included and looked "cool."

Among those gamers exposed to the QSR ads in Need for Speed Carbon, a racing title published by Electronic Arts, 39 percent said they would ultimately recommend the QSR brand to others compared to the control group.

Furthermore, 17 percent assigned the QSR brand the highest possible brand rating compared to the control group.

Meanwhile, fifty-six percent of all survey respondents agreed that the advertisements added realism to the game-play environment.

Interpret was also commissioned to survey responses to a branding campaign by the global confectionary company executed in "NASCAR 08," also published by Electronic Arts.

Seventy-five percent of gamers recalled the candy bar in-game advertising, with 56 percent recalling the specific ad creative. Within the test group, 72 percent agreed with the statement that the candy bar is "a great snack to eat while playing video games," an increase of 29 percent from the control group; the proportion agreeing that the candy bar "gives you energy" and "is cool" rose 24 percent and 21 percent from control group to test group, respectively.

"The depth of this research reflects Massive's commitment to offering advertisers an understanding of how in-game advertising can impact brands across game genres and advertising categories," said Cory Van Arsdale, CEO of Massive.

"As the in-game medium matures and establishes its position on media buying plans, advertisers and agencies are eager for insight into creative nuances and best practices for maximising its impact. We view this type of guidance as an essential part of our role as an industry leader and innovator."

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