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DAN MENA Digital Predictions 2017

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Loft Office 3, 208/9 - Dubai Media City - PO BOX 502177 - Dubai, UAE
www.dentsuaegisnetwork.com +971 4 447 4996

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ZEBA MAHMUD
EDITOR-IN-CHIEF
EDITOR IN CHIEF & CEO
ZEBA MAHMUD
zeba.mahmud@arabianmarketer.ae
GROUP EDITOR - MENA
SANA MAHM...

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MICHAEL NEDERLOF
CEO, DENTSU AEGIS NETWORK MENA
L
ast year, we had commented that 2016 could be regarded as the year
of di...

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DAN MENA Digital Predictions 2017

Continuing with its annual tradition, Dentsu Aegis Network takes a close look at the key trends that the marketing and advertising industry should look out for in 2017. Dentsu Aegis Network’s future looking trends provide a guideline to what lies ahead in 2017. These will play a role not only in what marketers should look out for but also the kind of questions they should ask their agencies to better understand which of these trends would most apply to them. These
will also assist marketers in creating the right expectations to benefit from all that a technology-led age has to offer.

Continuing with its annual tradition, Dentsu Aegis Network takes a close look at the key trends that the marketing and advertising industry should look out for in 2017. Dentsu Aegis Network’s future looking trends provide a guideline to what lies ahead in 2017. These will play a role not only in what marketers should look out for but also the kind of questions they should ask their agencies to better understand which of these trends would most apply to them. These
will also assist marketers in creating the right expectations to benefit from all that a technology-led age has to offer.

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DAN MENA Digital Predictions 2017

  1. 1. Loft Office 3, 208/9 - Dubai Media City - PO BOX 502177 - Dubai, UAE www.dentsuaegisnetwork.com +971 4 447 4996
  2. 2. ZEBA MAHMUD EDITOR-IN-CHIEF EDITOR IN CHIEF & CEO ZEBA MAHMUD zeba.mahmud@arabianmarketer.ae GROUP EDITOR - MENA SANA MAHMUD sana.mahmud@arabianmarketer.ae EDITORIAL TEAM KIRAN KIDWAI kiran.kidwai@arabianmarketer.ae ASMA WANGDE asma.wangde@arabianmarketer.ae ART DIRECTOR AHMAD SHAMSHAD ADVERTISING IN ARABIAN MARKETER TARIQ AHMAD​ marketing@arabianmarketer.ae For subscription please write to marketing@arabianmarketer.ae For feedback please write to editorial@arabianmarketer.ae TEAM DAN Alex Jena, Head of Research & Development, DAN Mark Brown, Head of Digital & Data, Carat Faisal Ahmed, Sr Digital Performance Manager, iProspect Sara Paye, Marketing & Communications Manager, DAN Bassel El Sawy, Group Account Director, Isobar Pragna Prabhulingam, Director, Research & Insights, DAN Karen Abou Jaoude, Business Development Executive, DAN Quoting a famous cliché, but with good reason - the digital revolution in the Middle East and North African (MENA) region is here to stay. Though consumer trends in various countries in the region have set records that beat the likesof United States, Western Europe and Asia Pacific in smartphone penetration and social media adoption, there is still a long way to go before the region becomes a fully developed digital economy The fact that the Middle East economy has realized only 8.4% of its digital potential is indicative of this, and also reflects the long and happy road ahead. At a time when digital disruption continues to remain a chaotic concept for the region, and attention has become the new currency, Dentsu Digital Predictions 2017 analyze the trends that will rule the region and help accelerate digitization in the overall ecosystem. Some of these trends have to be understood from the long term purpose they promise to serve. Some of these trends go even beyond marketing in their application. All of them however are suggestive of the remarkable year that 2017 promises to be, at least through a digital lens. Needless to say that the best minds of Dentsu Aegis Network have compiled the digital trends of 2017 in this report, and The Arabian Marketer is proud to render reportage and editorial expertise as the publishing partner for the report. We hope the report empowers stakeholders of the business in devising digital strategies, fostering digital innovation, meeting consumer’s ever growing demand, seizing the opportunity to create home-grown digital platforms and establishing a vibrant digital startup ecosystem, while empowering the digital workforce for the future. Happy Reading! DISRUPTION AHEAD 03
  3. 3. MICHAEL NEDERLOF CEO, DENTSU AEGIS NETWORK MENA L ast year, we had commented that 2016 could be regarded as the year of digital ‘graduation’ in MENA. If we continue the analogy, 2017 will be the year where the region’s advances in social, mobile, technology and commerce really start getting to work in terms of scale and business impact. While these might only represent four of an endless array of digital based principles that are impacting the way modern marketing is carried out, they are the four most relevant for the Middle East and have been progressing in harmony with each other. Social media stands for more than connection. In the region, it has been relied upon as a source of more credible news and information, and also a vital resource for creativity, expression and inspiration. It has given society the ability to shape an identity virtually, a welcome respite for many who are constrained and limited in their expression in the physical world. The mobile is of course cited as the most personal, intimate device, but in MENA, it is for many their first device that isn’t shared. The rate of device development negated the need to really consider desktop PCs or even laptops. The ease of access for owning a smartphone has had, and continues to have, the biggest technological impact on a micro scale. In MENA, technology is also entwined with socio economic progress. Dubai’s designs on becoming a ‘smart city’ are more than a pamphlet motto. As country leaders place technology at the top on their development agenda, the broader society, especially in the more advanced cities in the region, are benefitting from an infrastructure in their day to day lives that leapfrogs many capital cities in the Western world. Finally, digital commerce remains in relatively nascent stages, but given the aforementioned simultaneous changes in social, mobile and tech, commerce is set to be revolutionized by consumer’s preferences and habits in the coming years. How these advances will shape and benefit the communications and marketing field lies in scale and business impact. If we look at scale, it is the citizens of the region that are the real driving force behind the digitization phenomena. Given the youthful, energetic and culture hungry demographics, it is no surprise that Bahrain, Qatar and UAE score higher than the US on smartphone penetration; that MENA is ranked second in the world for YouTube video view and that consumption of Facebook embedded videos is now double the global average. These consumers remain in sync with the culture of global content and themes -- Netflix binging, Pokémon go-ing, bottle flipping, mannequin challenging, political memeing to name a few. Inequalities exist and the whole region doesn’t share the same levels of addiction as the GCC. That said, the trend is only going in one direction with an optimistic projection of the region hitting 60% overall smartphone adoption by 2020 matched with the availability of two zettabytes of data in the Middle East – that’s more bytes than the estimated individual grains of sand covering the entire Arabian Desert. The digital consumer is always on, increasingly mobile and always connected. Yet even though digital has a positive impact on their entertainment, their connections, their identity et al, it creates a storm of uncertainty and complexity for businesses. The rate of progression and the mass scale on which it has occurred has given rise to a whole new economy, a Digital Economy, where traditional processes, ways of working and ways of communicating are rendered obsolete. Traditional business models are being turned on their heads, digital-first brands are disrupting major categories and consumers now have sky-high expectations in service. Retail channels can now operate omnichannel. Sharing and service economies have become on click and on demand while having a profound effect on business and society. The clock only needs to be wound back to 2009 for the word ‘Uber’ to be thought of as an adverb of German origin to both senior executives at motoring corporations trying to cut fuel emissions and many housewives living in Saudi Arabia trying to get around town. The blistering pace at which the Digital Economy has been ignited has presented challenges for many companies, more so for multinationals. The pace of change is getting faster and faster – driven again by acceleration in technology (sparing the detail on Moore’s Law, whereby processing power doubles every two years) as well as the breakdown of barriers for digitally orientated companies to thrive in a short space of time. We are now seeing bricks and mortar give way to connectivity and code on an almost daily basis. Closer to home, the developed Middle East is the archetype of modernity, with sand dunes turning to skyscrapers in little more than a decade. And the notion of a Digital Economy is certainly here. However, the ill effects of international politics and economic uncertainty in the post-Brexit, post-Trump era are fused with downward pressure on domestic commodities and uncertainty for multinationals wanting to invest in the region. This has created a difficult climate for MENA EMBRACING THE DIGITAL ECONOMY 04 DENTSU AEGIS NETWORK MENA DIGITAL PREDICTIONS 2017
  4. 4. business leaders trying to grow and scale their companies. Fear not. There lies both challenge and chance for business and commerce to be able to keep up with the pace of change. The opportunity lies in re-examining ways of marketing in this digital context. In this industry, having an appreciation of the local nuances and implications on major global developments is certainly a progressive step towards embracing this new economy. The specific challenges for marketing and advertising professionals will naturally vary by industry, vertical, geographical presence and even the focus demographic of consumer. However, there are a handful of themes that apply to many. Understanding how the customer’s journey is adjusting to digital behavior and the redefined role of offline and online touchpoints is a major task. Within this, the specific online user experiences continue to evolve and merge with mainstream media and social media, which ask for new rules of engagement. The power of the screen remains as strong as it has done for decades, but new device habits and content preferences raise questions for many marketers about what the right combination of screens is and how to have the most effect. Every single digital interaction on any device and at any time of day has a data point - and behind each data point is a human. The most effective marketing relies on a sharp, accurate portrait of the consumer and the task of painting this portrait has become even more essential to every marketing dollar spent. While a potentially overwhelming undertaking, investing in the right tools, software and platforms will enable businesses to make sense of the wealth of data available to them and move from audience based to people based targeting. Finally, modernizing a company to match the expectations of the Digital Economy is perhaps a more universal challenge irrespective of vertical. Organizational agility and the need to rethink how a company caters for the needs of younger workers bring more cultural and structural complexity to an organization. The companies that navigate this uncertainty to win, thrive and prosper will be the ones that can adapt to the Digital Economy the fastest. They will make it a priority to ensure that digital works much harder for them in the most important areas of their business, especially media, advertising and communications. 2017 will be the year where the region’s advances in social, mobile, technology and commerce really start getting to work in terms of scale and business impact Constant connectivity has given rise to the Digital Economy and there lies both challenge and opportunity for business and commerce 05 DENTSU AEGIS NETWORK MENA DIGITAL PREDICTIONS 2017
  5. 5. 06 A rguably, it was never easier to be a marketer. The granularity of available data; the multitude of platforms that are both cost effective and have tailor made solutions; the role of technology in decreasing advertising wastage; the expert advice, insights and other similar weapons –– marketers never had so much at their disposal. All a marketer has to do today is ask, and a host of partners surface to simplify a complex ecosystem and suggest effective solutions. Therein, however lies critical question number one – what should the marketer ask? Dentsu Aegis Network’s annual digital trends report is a good starting point in that direction. Highlighting areas that can help better connect with and engage consumers, gives a broad sense of the areas that a marketer should factor in while deciding on the best course of action to meet her or his business objectives. It gives advice on what makes a media vehicle more or less desirable for a particular brand. But what next? And that is critical question number two. Once a marketer has a sense of the areas that will matter in the year ahead, how should that information be utilized in order to create a plan that is stronger and more effective than last year. The more one has to think about creating ‘bigger and better’ than before, the more options begin emerging. When a marketer begins navigating through that maze, constantly seeking innovations that are transformational or ideas that go beyond just selling products, the job does not look so easy. Despite all the help at hand, marketing has to eventually make a noticeable and measureable impact on business. The onus on marketing is much more today because marketing has proved its role as a sound business function. And hence, there was never more pressure on marketers. On this journey, a marketer has to divide time in seeing what is in the rear view mirror and what lies ahead. The wisdom of the past should not be ignored while preparing for the future. In the MENA region, as also seen in some of the trends that Dentsu Aegis Network has listed, areas such as the multiscreen approach or the role of ecommerce or influencers have been important but it is their development that marketers need to observe. There aren’t newer trends coming into picture as much as there are newer traits of existing ones. This difference is important because it chalks out which domain has the bandwidth to continue to grow, and remain important. In comparison, the technology led solutions are a completely different ballgame. Bots or sensors are not just fancy words. They have proved their worth and their change making abilities in different industries. Marketing professionals have only just begun their journey here and if initial results are anything to go by, the impact of these solutions will be nothing short of transformational. After the broad idea is understood, the specifics are decided and the plan is executed, the next step, or critical question number three, is how do you know it all worked? Sales and business objectives are one way. All metrics that a marketer is used to is another. But when we are speaking about how much a new age media plan delivers, or what its incremental value is as opposed to a tried and tested media plan, marketers are looking for more concrete answers. Richer analytics and more comprehensive benchmarks that apply as much on legacy media as they do on new become important. If there is one thing that marketers are definitely expecting in 2017, it is more accountability from their agency and media owner partners. Borderline paranoia is on the cards, and everyone will have to be prepared of what that would mean for the industry, and also how it would be a good thing in the longer run for the business. EYE ON THE BALL If there is one thing that marketers are definitely expecting in 2017, it is more accountability from their agency and media owner partners. DENTSU AEGIS NETWORK MENA DIGITAL PREDICTIONS 2017
  6. 6. CONTINUING WITH ITS ANNUAL TRADITION, DENTSU AEGIS NETWORK TAKES A CLOSE LOOK AT THE KEY TRENDS THAT THE MARKETING AND ADVERTISING INDUSTRY SHOULD LOOK OUT FOR IN 2017 I n MENA, the key element to focus on revolves around the digital economy. The marketing and advertising landscape may still have to catch up to more mature markets, but all aspects of the economy are exhibiting trends of digital empowerment. The role that some of the governments are playing to create smart cities or the interest from international players that some of the markets have due to their consumer base is all lining MENA up to experience a growth in opportunities that comes with connectivity, mobile internet and technology. On top of the Dentsu Aegis Network’s trend list is Multiscreen. The power to implement omnichannel planning, and the tools that can make this happen, is more than just an ideal concept now. Ecommerce has continued on the list but this year with the sheer growth seen in the domain last year, Dentsu Aegis Network predicts it to be a year of transformation. Digital Wallets are all set to change the way consumers shop, and in many ways, the transform the purchase funnel itself. Dentsu Aegis Network has included this among its top three trends to watch out for in 2017. The rise of Micro-influencers, as opposed to the rule of the influencers, on social media and extended platforms, is testimony to the fact that even if social media consumer is constantly evolving, the search for the genuine or the authentic has remained the same. And it is this hunt that would continue to see changes in this space. Digital Dialogue or the bonfire approach instead of the fireworks approach has come to marketing. The concept of one mega move is being replaced by smaller but continuous bursts that keep the marketer in conversation with its consumers over a longer period of time. Proximity, essentially the use of sensors, has revolutionized various industries and the impact on marketing and communication is obvious. The likes of near field communication have been spoken about for some time now. However, the work that beacons and sensors have accomplished today, have made the process smoother and more available for marketers bringing some exciting solutions that have a direct impact on business results. Bots – a term that is used in generic to explain all things machine-led, whether it is artificial intelligence or machine learning or intuitive media and marketing solutions, is also going to see some real action in 2017. A lot has already moved on this courtesy the launch of chatbots and the kind of work marketers have already begun but this is one area, where the industry has still only scratched the surface. Attention – or moving beyond basic measurement metrics and analytics is also going to be high in the year, according to Dentsu Aegis Network. Agencies will have an important role to play in ensuring that publishers are collaborating with agencies and marketers to follow the highest industry standards. The benchmarks for digital will go beyond the surface and be in line with what is observed in legacy media. Transformation Z – or adapting to the demands of Generation Z, also known as Centennials – will be another area that will demand attention and focus. Solutions have to cater to Millennials and Centennials while understanding the fundamental differences between these two consumer groups. THE JOURNEY AHEAD Dentsu Aegis Network’s future looking trends provide a guideline to what lies ahead in 2017. These will play a role not only in what marketers should look out for but also the kind of questions they should ask their agencies to better understand which of these trends would most apply to them. These will also assist marketers in creating the right expectations to benefit from all that a technology-led age has to offer. 07 A STEP FORWARD MULTISCREEN ECOMMERCE DIGITAL WALLETS MICRO-INFLUENCERS DIGITAL DIALOGUE PROXIMITY BOTS ATTENTION TRANSFORMATION Z DENTSU AEGIS NETWORK MENA DIGITAL PREDICTIONS 2017
  7. 7. Second screening, screen stacking, media meshing – many terms have been used in the last few years to define a fundamental change in consumer behavior – the seamless consumption of at least two of four screens including TV, laptop, tablets and mobiles. While audiences are accessing content, connecting, or performing a function all at once – the marketer is looking for solutions that can lead to omnichannel planning. This area of focus will continue to be critical in the year ahead as well, as it keeps evolving and perfecting a more sophisticated consumer, creating important implications for marketers and advertising professionals. GETTING IN SYNC WITH THE MULTISCREEN WORLD WITH OMNICHANNEL PLANNING 0808 DENTSU AEGIS NETWORK MENA DIGITAL PREDICTIONS 2017
  8. 8. THE The proliferation of multiscreen viewing that was documented in 2016 is still in effect Traditional broadcast is still a cornerstone of in-home entertainment, especially for Millennials, but convergence between screens is rising. Ipsos estimates that up to 84% of viewing audiences watching TV are also simultaneously using another device while around 40-50% of 18-24 year olds in GCC are turning to their social networks during TV ad breaks (CCS) Also as predicted, the major networks (Facebook, YouTube, Twitter) have not only been improving their video based advertising products but are also advancing in the approach of combining video with TV For younger audiences, mobile consumption shares an evening peak with TV but also has a stronger ‘all-day’ consumption pattern Calls/ Text/ Chat via Mobile Apps TV Social Network on Smartphone/ Tablet The new rules of peak? Mobile and social networking behavior in the UAE typically starts earlier and extends into later hours compared with TV viewing 100% 80% 60% 40% 120% 0% AED0 AED50,000 AED100,000 AED150,000 AED200,000 YouTube Investment (incl. discount) Hover to see Budget & Est. Reach AED169,463 Est. Reach (% of CCS population*) REACH DATA SOURCE: CCS, Ages 15-64, FY 2015, UAE NOTE: CCS is proprietary tool that captures data and information regarding consumer behavior, attitude, lifestyle, and media consumption DEVELOPMENTS 09 Established video players (e.g. YouTube) are now giving digital planners greater access to impression and reach levels by demographic DENTSU AEGIS NETWORK MENA DIGITAL PREDICTIONS 2017
  9. 9. Almarai had success with TV and online video planning. A 10-day blast campaign on YouTube reached 50% of the target audience as well as uplift in brand metrics Channel Mix Analysis (Females, 20-40 – Brand Awareness) TV Advertising vs YouTube/ Facebook Video 50 % 45 % 40 % 35 % 30 % 25 % 20 % 15 % 10 % 5 % 0 % BrandAwareness 0 % 10 % 20 % 30 % 40 % 50 % 60 % 70 % 80 % 90 % 100 % % Budget Allocated To YouTube – Video Ads, Facebook, Target Ads USD 600,000 USD 400,000 Low Optimal Range USD 500,000 Optional Mix High Optimal Range Sophisticated tools are needed to account for the overlap in screens viewed. Dentsu Aegis Network’s proprietary planning tools use single source audience viewing data to allow for a truer projection of reach across screens THE Availability, use of and interpretation of data are critical to mastering multiscreen planning and thus optimizing an overall broadcast approach across screens A multichannel approach will still involve multi plans and multi reports. The biggest implication here is in the ability to account for the multiscreening phenomena that exists within people’s new screen behavior – i.e. accounting for the overlaps To understand the single user or ‘segment of one’, advanced tools that can account for any overlap will become critical to understanding how budgets should be split across screens and measuring an integrated effect Creativity also needs to flex to the context of the screen environment. Video on mobile is on portrait format, unlikely to be played with sound and has to work harder to capture attention Convergence with e- or m- commerce will add a further dimension to demonstrating business value IMPLICATIONS 10 DENTSU AEGIS NETWORK MENA DIGITAL PREDICTIONS 2017
  10. 10. The Middle East is relatively new to the ecommerce party, but the recent news of Amazon gate-crashing the ‘party’, has created expectations for 2017 to be the transformational year. Local players are working on making their mark in both the vertical and horizontal ecommerce marketplace. In the process, MENA is gearing up to create more home-grown unicorns, emerging from the online commerce domain, much as seen in the case of Souq.com. THE YEAR OF TRANSFORMATION 11 DENTSU AEGIS NETWORK MENA DIGITAL PREDICTIONS 2017
  11. 11. How Often Do You Typically Make An Online Purchase? ONCE A WEEK ONCE A MONTH 2-4 TIMES A MONTH ONCE EVERY 2 MONTHS LESS THAN ONCE EVERY 3 MONTHS 0 10 20 30 40 Across the GCC, 44% plan to shop online in the next year with 20% preferring credit card and 70% cash on delivery SOURCE: Effective Measure, Nov 16 Investments, acquisitions and expansions are making the MENA ecommerce landscape more competitive than in 2016 12 12 21 17 39 THE Across MENA, growing adoption of smartphones and improvements in delivery options and the appeal of goods available outside the region are boosting ecommerce to a predicted USD 10 billion in 2018 in the UAE alone Fashion, gadgets and travel continue to be the most relevant verticals and whilst cash on delivery (COD) remains popular, the ‘mobile wallet’ phenomena is developing in parallel Government initiatives continue to raise awareness by hosting regional events; ‘The Ecommerce Show’ is the region’s leading event catering to commerce in the Digital Economy (May 2017, Dubai) The landscape is becoming more competitive. Souq.com is rumored to have a USD 1 billion acquisition from the global giant Amazon. New player ‘Noon’ is also launching with a USD 1 billion backing. New eGrocery and eFashion brands are also competing in UAE DEVELOPMENTS 12 DENTSU AEGIS NETWORK MENA DIGITAL PREDICTIONS 2017
  12. 12. Renault launched its new ‘Koleos’ SUV with a live, interactive virtual show-room experience for prospect car buyers in UAE Emirates and Careem collaborate on Skywards Miles - Members will earn 1 Mile for every USD 2 spent on the app-based car booking service THE Opportunities are now arising for digitized versions of traditional shopper marketing tactics. Careem has integrated with the Emirates loyalty program, and Trolley.ae is testing couponing and virtual sampling options that are matched with the shopper habits of their users The gap between a brand/ content based experience and the ability to make a transaction is decreasing. The opportunity is within ‘brand commerce’; experiences that are powerful for both perception and driving sales Both online retailers and shoppers in MENA are in sync with the international flash sales – Single’s Day, Black Friday and White Friday are here to stay. In 2016 Souq.com surpassed all online shopping records with a 100% increase in gross merchandise volume (GMV) and 37% credit card usage Advertisers will need to evaluate how central ecommerce can be placed within the overall marketing ecosystem IMPLICATIONS 13 DENTSU AEGIS NETWORK MENA DIGITAL PREDICTIONS 2017
  13. 13. The rise of digital wallets in the Middle East has been evident not only in the increase of players in the domain but also in the collaboration of these with various products and service providers. By definition, digital wallets are systems or online devices that allow people to make electronic commerce transactions. In application, they bring unprecedented convenience that is widely accepted by a new breed of consumers. THE FUTURE OF ALL TRANSACTIONS IN THE MIDDLE EAST 14 DENTSU AEGIS NETWORK MENA DIGITAL PREDICTIONS 2017
  14. 14. THE According to Arabian Business, mobile wallet payments are set to exceed AED 50 billion in five years in the UAE alone As part of the Smart Government initiative, the mobile wallet project aims to digitally transform over 90 government services in the UAE. Plans are under way to upgrade all UAE banks with devices to accept mobile wallet payments. The UAE Banks Federation report says 35% of transactions to be made through mobile within five years Finance and telcos are a major driving force behind the trend, but retailers and merchants are also upgrading infrastructure. Beam wallet panels are becoming more common across the UAE High smartphone adoption makes such commerce projects more achievable. Near-field communication (NFC), biometric or retina recognition technology is now mainstream in GCC DEVELOPMENTS Smartphone Owners Who Use/ Are Likely To Use Digital Wallets NOTE: Data Refers To Select Countries, July 2016 INDIA SOUTH KOREA SOUTH AFRICA UAE USA AUSTRALIA CANADA UK GERMANY 0% 100%75%50%25% ALREADY USING VERY LIKELY TO USE LIKELY TO USE LESS LIKELY TO USE ENOC and EPPCO in Dubai have allowed for cashless and cardless payments at their stations; ENOC’s innovative payment solution is powered by Beam Wallet, in collaboration with MasterPass by MasterCard Gulf bank implements facial recognition software as identity authentication Beam wallet mobile app is used by more than 100,000 users in the UAE 15 DENTSU AEGIS NETWORK MENA DIGITAL PREDICTIONS 2017
  15. 15. MasterCard global is implementing a fingerprint and ‘selfie’ payment technology MasterCard launches cashless payment in IMG World in UAE In the Apple store at the Mall of the Emirates in the UAE, users with the dedicated store app can complete a transaction by simply scanning the barcode of the desired product and walking out. THE As the habit and acceptance of mobile wallets grow, the lack of trust towards payments that are not cash-on-delivery is expected to diminish While consumers benefit from the convenience of seamless transactions, banks, merchants and retailers will have access to more consumer spending data. Spending patterns, locations, preferences and impulse decisions will be available for analysis, which can in turn help tailor more personalized offers Mobile wallets will have an impact on the convergence of media - we may see campaigns that integrate digital wallets, linking communications with direct payment A futuristic retail experience could be closer than imagined. Amazon is changing the way people shop with the likes of Amazon Go shop - people will be able to shop without needing to check out or wait in line as they will be automatically billed as soon as they leave the store IMPLICATIONS 16 DENTSU AEGIS NETWORK MENA DIGITAL PREDICTIONS 2017
  16. 16. 13 Consumers in a digital world resonate more with brands and brand voices they find authentic. This trend led to the early form of social media celebrities and influencers. Over a few short years, as brands and consumers continued the search for the genuine, a newer breed came to play – the micro-influencers. Proving to be both cost-effective and better engaging with consumers, this is one trend that is poised to pick up momentum in the year ahead. EMERGING FROM THE NEED FOR ORGANIC & AUTHENTIC CONTENT 17 DENTSU AEGIS NETWORK MENA DIGITAL PREDICTIONS 2017
  17. 17. THE In the last attempt to combat the algorithm effect within social media, and for a brand to gain organic buzz, influencer usage was common within media plans in 2016. According to eMarketer, 86% of marketers say they will explore usage of influencers in the next 12 months Some of the first cohort of digital influencers in MENA have quickly been promoted to ‘digital celebrities’, with ever increasing fees This has led many marketers and agencies to question the authenticity and effectiveness of such high profiles. The issue of promiscuity has become more apparent – big names may promote several and in some instances, competing brands or services within a month Talent platforms are emerging regionally and globally allowing brands to diversify and use ‘everyday advocates’ or ‘micro influencers’ as opposed to the obvious household names DEVELOPMENTS 18 DENTSU AEGIS NETWORK MENA DIGITAL PREDICTIONS 2017
  18. 18. Why Influencer Marketing Matters to Brands MORE AUTHENTIC STORYTELLING OFFERS A BETTER ROI THAN OTHER MKTG CHANNELS BETTER TO REACH CONSUMERS MAKES BRANDS FEEL MORE PLUGGED INTO DIGITAL GOOD ALTERNATIVE TO TRADITIONAL ADS HELP US REACH MILLENNIALS AND CENTENNIALS SOURCE: Topinfluence/ Altimeter Group, Marketing Charts 2016, BI Intelligence 2.78 1.92 1.29 1.18 0.96 0.86 Burberry launched Art of the Trench in the Middle East using 37 regional influencers. The Iconic Trench maintained the focal point of the campaign 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 THE A change in perception is needed. Authenticity is more powerful than scale in the long term. Brands need to think ‘indie’ rather than ‘blockbuster’, and they will be rewarded with more relevant, likable and trusted ambassadors Perhaps the biggest assessment of relevance to ask is whether or not this individual would naturally use the product or service in question. Unnatural fits stand out more than the industry perceives Talent platforms help eliminate the uncertainties and combat the unknowns. Guaranteed scale or engagement can be achieved with cost per thousand impressions (CPM) or cost per engagement (CPE) based bookings and the networks have more control over the influencers themselves – e.g. penalizing for posting competitor products The agency leading the partnership has a greater responsibility to ensure the right balance between the influencer and the product/service that gets the focus in the content IMPLICATIONS 19 DENTSU AEGIS NETWORK MENA DIGITAL PREDICTIONS 2017
  19. 19. In the era of always on, dialogue has replaced monologue, bringing new challenges in its wake, for both content marketers and publishers. On the one hand, this way of communicating allows for a certain measure of precision, leading to better engagement with consumers. On the other hand, it has left some marketers grappling with what the right approach and spend should be. Solutions are however coming in the kind of work that new age media companies are doing. BRAVING A NEW SET OF CHALLENGES 20 DENTSU AEGIS NETWORK MENA DIGITAL PREDICTIONS 2017
  20. 20. THE In MENA, the younger demographics are always connected. While they are naturally following or connecting with their friends or the content they cherish, the incidence of following a brand that they have affinity with is also strong – more so for Generation Z This has given rise to thinking about how dialogue can be achieved with the audiences over a longer period of time, rather than a silo, monologue approach that naturally has a shorter shelf life From an advertiser’s perspective, many brands are adopting best practice from Facebook or Google in terms of always on content marketing It is also an area of reader loyalty for publishers. Saudi portal Ma3doo3 and Kasra (dubbed the Buzzfeed of ME) are recent examples of platforms where the actual content or editorial reacts to user preference; whether based on search data or content that is rising in engagement DEVELOPMENTS Data from Ipsos reveals that in MENA, 47% of 25-34 year olds follow a brand on social media Brand Engagement By Age DO NOT FOLLOW BRANDS 15-24 YEARS 25-34 YEARS 35-44 YEARS 45+ YEARS 54% 47% 45% 41% 46% 53% 55% 59% FOLLOW BRANDS SOURCE: Ipsos, KSA, UAE, Kuwait, Bahrain, Qatar, Lebanon, Egypt, Palestine, Oman, 2016 Ma3doo3.co and Kasra. co - examples of publisher agility and reaction to whatever is trending or having the most engagement with users 21 DENTSU AEGIS NETWORK MENA DIGITAL PREDICTIONS 2017
  21. 21. FMCGs rely on thematic storytelling to ensure they have more than product news to talk about. Dove lead in the ability to own a theme (female empowerment) and have a balance of higher profile ‘hero’ content with more regular ‘hub’ content HERO HYGIENE HUB Regular dialogue approach prevents dips in interest and helps build up momentum across a longer period Burst / campaign approach THE Telling a continuous story about a product isn’t sustainable. Successful brands aim to associate a story around a theme, movement or bigger purpose The pressure on creative resource is perhaps the biggest implication. Media precision can allow for more specific stories to be communicated, but the realities of production capabilities may not always match Given the above, micro influencers compliment the ability to plan effective longer term storytelling and it is getting easier to identity the right ones that suit a brand’s theme or purpose Google has documented success of the ‘Hub, Hero and Hygiene’ YouTube approach to balancing the right type and frequency To establish the right balance, the competitive threshold for campaigns needs to be a priority calculation before always on levels can be determined IMPLICATIONS 22 DENTSU AEGIS NETWORK MENA DIGITAL PREDICTIONS 2017 CAMPAIGN PLATFORM / SERVICE SOCIAL MEDIA BASE CAMPAIGN CAMPAIGN CAMPAIGN YEAR INTEREST
  22. 22. Tracking shopping patterns and behaviors, pinging discount codes in store and connecting with consumers in real time – eventually, all of this is about location. Many companies are using sensors and beacons to created new kinds of solutions to business problems. In the advertising and marketing domain, the technology is playing a critical role in better engaging with consumers and achieving business objectives. THE RIGHT KIND OF TRACKING 23 DENTSU AEGIS NETWORK MENA DIGITAL PREDICTIONS 2017
  23. 23. The limit in product variation is currently hindering the growth in proximity sensors market BEACON DEVICE THE Proximity sensors are nodes that detect the presence of nearby smartphones/ mobiles and emit electromagnetic radiation while also looking for return signals The proximity sensors market in MEA is expected to increase to USD 0.22 billion by 2018 at a CAGR of 4.77%, according to Research and Markets. MEA currently accounts for 5% market share of the global proximity sensors market The significant smartphone penetration in the region, and its continuous development, is a key driver in the growth of the proximity sensors market Accountability within activations has helped raise the profile of such tracking capabilities in the region. Whether it be an in-store, in an ambient location or around traditional out of home formats (e.g. roadside or airport), a more sophisticated measurement opportunity now exists DEVELOPMENTS 24 DENTSU AEGIS NETWORK MENA DIGITAL PREDICTIONS 2017
  24. 24. Seeketing can send messages to micro segmented consumers with app and without app, reaching 100% of users within a store. It is one of the more advanced technologies that can provide omnichannel profiles and communication based on proximity THE With relatively low costs and easy to set-up, proximity adds a richer layer of audience understanding in real world locations where it had been hard to assess It opens greater opportunity for the ‘Minority Report’ style, hyper personalized communications and understanding of ‘the segment of one’. According to Unacast, a marketing firm that specializes in proximity networks, 49% of the world’s airports plan to “directly contact passengers via their mobile phone over the next three years” Seeketing, that is now available in the region, provides a coherent and integrated solution based on mobile technology (WiFi, Bluetooth and cellular data), which allows the tracking of visitors either online or at the store. This facilitates the understanding of the full shopper journey while also offering the capability to push targeted communications to consumers when visiting the store IMPLICATIONS 25 DENTSU AEGIS NETWORK MENA DIGITAL PREDICTIONS 2017
  25. 25. The future of business commerce will be in conversations. As the conversational style is more natural to people, industry experts are looking at this as a whole new opportunity for brands to form better relationships with their consumers. Messenger bots are an opportunity for brands to re-invent customer service, accelerate both ecommerce and mcommerce and interact on a personal level, at a mass scale. As large platforms such as Facebook, Google and Microsoft open up their platforms to developers, some of the biggest spenders are experimenting with the likes of chatbots and other forms of artificial intelligence (AI). A CONVERSATIONAL FUTURE 26 DENTSU AEGIS NETWORK MENA DIGITAL PREDICTIONS 2017
  26. 26. THE Chatbots are automated identities in messaging apps that are set up to answer common queries about a product or service and more Globally, the chatbot phenomenon is gaining pace following Facebook’s enablement of bots to be developed within the Messenger platform and interface. Since then, 30,000 have been created In the region, Mercedes ME launched a chatbot via Facebook that allowed prospects to book test drives and explore the model range by just chatting For the finance category, where customer assistance and service is a core differentiator, chatbots are also being employed. Mashreq Bank and Emirates NBD have released AI agents and assistants to offer instant customer service in a more natural human interface. Card-less, cash transactions, low ticket local transfers and balance enquiries can also be performed DEVELOPMENTS The Dubai bot, developed by Microsoft Gulf, acts as a virtual tour guide for visitors to the Emirate, giving them an AI source for all their travel needs Mercedes ME and Mashreq Bank are among the first launch bots in MENA 27 DENTSU AEGIS NETWORK MENA DIGITAL PREDICTIONS 2017
  27. 27. Globally, Microsoft and Facebook are two of the biggest players in the bot development field, but many smaller products are available The tone, personality and feel of a chatbot has to be in sync with how the brand communicates THE In the digital economy, where user experience becomes more of a differentiator, service based companies have to continually find ways of keeping up with the always on, always connected user. Chatbots are likely to continue serving that purpose as they become more acceptable 24hr customer service is another major opportunity that caters to the atypical and night-owl-like mobile browsing behavior of young, digital audiences in the region. Finding out if a car will fit in a garage at 3 AM is now a reality The softer, more human characteristics of chatbots create another interesting consideration. The role, the personality, the fit of humor or adapting to young and old audiences need to be considered Globally, competition exists among bot services. Off-the-shelf chatbot products will become easily available and manageable in 2017 IMPLICATIONS 28 DENTSU AEGIS NETWORK MENA DIGITAL PREDICTIONS 2017
  28. 28. It is time to go beyond just scratching the surface of analytics, and moving towards a deeper appreciation of what’s happening beyond the ‘click’ or the ‘play’. The role of agencies has become significant more so as advertisers demand accountability and seek metrics that are not only in line with the industry’ s standards, but also make an impact on the business targets. Agencies also have the task for a deeper relationship with publishers and other technology partners to obtain more meaningful and deeper analytics. BEYOND THE CLICK OR PLAY 29 DENTSU AEGIS NETWORK MENA DIGITAL PREDICTIONS 2017
  29. 29. Clicks Are Not A Proxy For Offline Metrics CTR (%) R=0.05 (NS) CTR (%) R=0.05 (NS) CTR (%) R=0.04 (NS) 100 80 60 40 20 0 -20 86420 %POINTLIFT %POINTLIFT 0 1 2 3 4 5 6 7 AD RECALL BRAND AWARENESS PURCHASE INTENT 100 80 60 40 20 -20 -40 -50 %POINTLIFT 20 4 6 8 0 No strong correlations emerge between CTR and any of the Nielsen BrandEffect Metrics SOURCE: Nielsen BrandEffect meta-analysis of 478 online global companies that ran between Oct 2014 - April 2015 Earlier this year Facebook rolled out the option for Middle East advertisers to bid on a 10s view of its auto play newsfeed videos 3>10 SECONDS 30 SECONDS THE The global ad industry has developed a forensic understanding beyond the initial act of the ‘click’ or the ‘play’ and best practices are being encouraged in MENA For display, research from Nielsen indicates that there is no strong correlation between CTR and brand metrics such as recall, awareness or purchase intent Many publishers are now offering a more true measurement of attention or engagement; the FT and Economist have started testing alternatives to CPM such as time based pricing models such as CPH (cost per hour). Facebook also tracks ‘time spent’ within its canvas format According to a recent study, by Moat, on attention metrics in MENA: 41% of display ads are only visible for one second or more (mobile and desktop) 65% of video ads are in view for just one second or more DEVELOPMENTS 30 DENTSU AEGIS NETWORK MENA DIGITAL PREDICTIONS 2017
  30. 30. DigitalMetrics/Automatic ScaleMeasures(Machine Deliverables) VOLUME/ REACH Basic Measures Opportunity to View Viewable Impressions Page Views Unique Views Frequency Visits QUALITY/ ENGAGEMENT Type of Interaction Clicks (CTRs) Views, Likes, Shares, Comments, Social Mentions Scrolling, Video Play (+length) Video Completion, Time Spent Data Exchange, Advocacy Competition Entries Bounce Rates EFFECTIVENESS Sales Data Exchange (Leads) AUDIENCE MONETIZATION TECHNIQUES CPM CPA Dwell Time (CPH: cost per hour) CPC CPL CPX (x=anything) etc The IAB, a nonprofit organization that develops industry standards and guidelines, is yet to have a presence in MENA Analytics services are at the core of the iProspect service offering THE Agencies have a responsibility to help raise the standard of accountability and pressure publishers and tech partners to go the extra analytical mile. Time based attention metrics are now an essential complement in addition to clicks, impressions, CTR and Views In turn, an examination to assess any correlation of attention based metrics on brand and purchase intent measures will help determine digital ROI Meanwhile, the advertiser also needs to ensure that adequate tracking is present on any owned property – whether it is onsite analytics that can link browser behavior to a campaign or brand tracking to assess the sentiment and perception performance of online video content The region lacks the presence of an authority board that helps brands, agencies and publishers with best practice, guidelines and expert advice IMPLICATIONS DATA & INSIGHTS Data is the engine of performance. Information drives results faster than anything else. It’s all about how you use it 31 DENTSU AEGIS NETWORK MENA DIGITAL PREDICTIONS 2017
  31. 31. The first digital generation expects more from its marketing and workplace – demanding a cohesive and engaging experience across all aspects of life. Studies have quoted that the Centennials or Generation Z and Millennials would decline jobs if the company’s technology was not in line with the changing times. They exert similar assertiveness in various other aspects of life too distinguishing them significantly from their predecessors. FROM DIGITAL FIRST’S TO DIGITAL ONLY’S 32 DENTSU AEGIS NETWORK MENA DIGITAL PREDICTIONS 2017
  32. 32. THE For companies embracing digital transformation, safeguarding for the next generation is high on the agenda. The region has youth on its side and much energy and attention is given to Millennials. However, Generation Z, born after 1995, will be the next focal point In their early 20s, with graduation behind them, the Generation Z consumers will now have more autonomy in their decisions. Brands, advertisers, publishers et al will either be marketing to more of them, or recruiting more of them Much US/ European literature documents the differences between Millennials and Generation Z, especially their digitally gregarious and visually obsessed nature Generation Z is even more in tune with the global content and technology culture. Snapchat is often cited as the stand- out social media platform with highest affinity among the ‘screenager’ demographic DEVELOPMENTS Younger Generation More Interested In Money GENERATION Z MILLENNIALS GENERATION X BABY BOOMERS 50% 55% 60% 65% 70% 70% 64% 59% 59% Globally, Generation Z is more money driven and entrepreneurial than its predecessor Snapchat’s arrival in the region will present a new option for reaching both Gen Z and Millennials in MENA SOURCE: Monster Worldwide Inc. 33 DENTSU AEGIS NETWORK MENA DIGITAL PREDICTIONS 2017
  33. 33. GEN Y: THE OPTIMISTS (1981 - 1994) GEN Z: THE REALISTS (1995-2010) Gareth El Mettouri, Robert Half UAE on how the country is behind the generation’s workplace ideal Raised on the Web Two Screens Communicate With Text Share Things Present Focused Want to be Discovered Luxury Shoppers Digital Savvy Will Take Side Gigs & Juggle Multiple Careers Retention Driver: Money Raised on Social Web Five Screens Communicate With Images Create Things Future Focused Will Work for Success Frugal Shoppers Digital-Centric Want to Work Themselves (Entrepreneurial) Retention Driver: Career Advancement How Generation Z differs from Millennials. Tech-innate creators and realists THE From a marketing and communications perspective, the most common considerations include: their snackable and visual content preference; active researchers and fast decision makers; expressive self- branders and are connected anytime, anywhere via their smartphones In the workplace, employer engagement with such a young and impatient individual can be a real challenge. According to PA Consulting Group MENA, employers need to create an open-minded, connected and forward thinking working culture Four approaches suggested include: Tap into their entrepreneurial side, allowing them to create their own brands which align with the employer’s vision, values and beliefs; enabling a personal motivation and drive for their own brand plus employers Re-think and replace ‘traditional hierarchy’ which is known to stifle creativity Consider new incentives like work from home options and unlimited annual leave instead of old options Training needs to be more hands on, customized and with smaller, but more regular feedback IMPLICATIONS The UAE has ‘a way to go’ to catch up on working from home and elsewhere; younger staff do not see, with the rise of social media and Skype, why they need to be in the office from 8 AM to 6 PM” 34 DENTSU AEGIS NETWORK MENA DIGITAL PREDICTIONS 2017
  34. 34. ALEX JENA HEAD OF RESEARCH & DEVELOPMENT, DENTSU AEGIS NETWORK MENA Hello, you have made it to the last, concluding section of the 2017 predictions report. There’s a lot of information and thought provoking topics in there. Perhaps some of the topics might lead you to question whether your business or account is on the right track for 2017 in terms of keeping up with innovations in the region. While it could be tempting to act on as many elements as possible, perhaps the pragmatic and less overwhelming approach is to find three particular areas to explore further, test and learn from. It goes without saying that our team of innovators, thinkers, futurists and data geeks at Dentsu Aegis Network are more than happy to answer any questions or take discussions forward - there’s an email address coming up that can help make that happen. We referenced how the winners in the new economy are the ones that can adapt the quickest. The idea of an organization being more agile is more pronounced for the marketing and agency teams where digital transformation is happening very quickly. Our CCS data, for instance, reveals that smartphone penetration for Millennials in KSA increased dramatically from 2012 – 2015 rising from 35% to 76% respectively, which in turn has big implications for content, context and continuity. Across our network, the teams that have been able to innovate more effectively and challenge the status quo have kept a few working principles at heart for their planning: Collaboration: The nature of the trends and new practices will have an impact beyond the immediate marketing and communications teams. Breaking down any conventional divides and silos and instead, forming multi-disciplined teams across different skillsets and expertise areas can make a true difference. An increasingly popular system is to employ this collective approach on a focused, specific area or process that needs to be addressed and then hacking or sprinting at the potential solutions. This practice of quick execution is referred to as ‘the Hollywood model’ in the business and management sphere, borrowing the analogy of multi skilled teams coming together to make a specific part of a film project and then dispersing. Managing Risk: Planning for the unknown will carry some element of risk but how it is handled will have a major impact on whether innovative projects see the light of day. Agency teams have a responsibility to mitigate and de-risk the unknown where possible and break down in crystal clear terms of what success will look like and how much of it is hoping to be achieved. Data has contributed to reducing risks but in MENA, more effort is needed from the industry to work on guidelines, benchmarks and best practices. The stakeholders in control of budgets also have a part to play. Willingness to make sure that every campaign brings learning or discovery element ensures progression. Culture: Fostering a culture of innovation is likely to be a key mandate for the leaders that want to disrupt rather than be disrupted. Going hand in hand with collaboration, it’s clear that winning in the digital economy requires a shared, collective responsibility and vision for innovation – one that several individuals contribute to. In MENA, advertisers and agencies can learn from the global tech giants on how they foster such a culture. The common examples include running quarterly innovation hacks, allowing employees to leave the office to keep learning about new techniques or following and networking with other innovative companies. The latter is a real opportunity in MENA where agencies can learn a lot from spending time with startups. Whether in Dubai, Abu Dhabi, Beirut or Cairo the startup community is collaborative by nature. It operates on lean resource and embraces the attitude of test. It burns and learns to continuously improve its offer. It’s not easy to keep up with the pace of change…and we have to keep in mind that this is the slowest it will ever be. Thankfully, we’re in a region where digital is presenting us with more opportunities to break with convention and innovative thinkers are plentiful. The future belongs to the fast, and MENA has the momentum to keep pace. THE FUTURE BELONGS TO THE FAST 35

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