Asad ur Rehman pens his thoughts for the MENA Media and Communications Industry for an interesting year that is almost upon us.

Asad ur Rehman

It is a great time to be rethinking investments in media and communications. As I write this, Big Tech (Meta, Amazon, and Alphabet) have reported perhaps their worst quarterly growth ever. Most of them have attributed this to the alleged weakening demand in digital ad spending, the economic turmoil, and the extraordinary inflation across the globe. On the other hand, the top agency networks including Omnicom, WPP, Publicis, and IPG have all raised their growth forecast, albeit without as flamboyant a profit growth. Whilst the economic challenges of inflation and efficiency are uniform across, most of the big advertisers (by measurable spends) across the world have also reported healthy growth. Unilever, P&G, Coke, Nestle, and Loreal etc- all have done this mostly on the back of their ability to take price increases. Some of them have also publicly registered their intent to increase their investments in brand building, while some have said they will temper the spends down. 

So, what is really going on here? Where is that growth in investment going that the agencies and brands have reported? A simple conclusion here might be that the growth in communications spending (not advertising spending) isn’t all going to the usual suspects anymore. A second conclusion might be that the economic situation has affected the substantial and long-tail of big tech revenues far more than it has the big businesses.

MENA will not be dissimilar to this global picture. In fact, the volatile nature of our markets will likely lead these trends. There are a few factors that will continually change how investment will flow across the industry in 2023.  Brands will diversify their spends at a greater pace than they have in the past. Whilst the industry will likely grow in line with the GDP, not all this growth will go behind the traditional channels. We can also safely assume that all social media minus TikTok is traditional in nature now. Whatever the brands eventually do, they will invest where the consumers are likely to be. I will give you a snippet of my thoughts on some trends that will shape our industry in the coming quarters.

E-Commerce (Retail) Media Will Have Its Wake-Up Moment:

While a massive global trend, in MENA none of the commerce players except Amazon have really invested behind this area as they should. Whilst Noon, Carrefour, Jumia, and Delivery Hero are gearing up, their progress will have to match the demand of retail media inventory which is not the case at the moment. Most of these players are also “data-shy” and not “teach-ready” when it comes to unearthing the power of performance of their platforms. Eventually, it will be a push from the brands that will shape up the platforms to deliver on this- if this push isn’t already in play.

Gaming Will Grow at a Greater Pace than Other Channels:

Gaming is perhaps the most under-invested area by brands everywhere. More so in MENA given the audience engagement with gaming is disproportionately high here. At its most basic, live and recorded streams on platforms like Twitch and YouTube are a source of eye-balls and inventory and, at its best, gaming attracts large sponsorships moneys in e-sports tournaments. There is a vast spectrum of opportunities in the middle across this that is waiting for someone to take on and laugh all the way to the bank. Gaming is also the least understood opportunity by brands. Anyone who makes an effort in this area will likely accelerate their own- and the industry’s- growth.

Broadcast/Streaming TV Will Rethink their Content Game:

There isn’t anything else in our industry that rests on its weakening laurels like the broadcast and streaming TV content does.  This is truer for the Ad-funded content than it is for the subscription channels. With Netflix going on the hybrid advertising/subscription model, Disney + making its mark, and Starzplay honing in on Sports, the traditional MENA players have to seriously re-evaluate how they do their content to gain back share of the viewership. Whilst the scale of Saudi investment in the entertainment industry are not a secret, a lot of that is not invested in transforming longform content. We also need a serious challenger in this space for this sector of the industry to arrest the decline.

1P Data Play Will Become More Important:

With tighter privacy regulations, platforms like Apple closing in on how a user data is used by publishers and apps, and Alphabet’s Chrome coming under pressure to finally kill the 3P Cookie, brands are looking to build the strength of their own data. Their allies in building this strength will come from unlikely places. Technology, Cloud, and CX platforms such as Microsoft, Salesforce, Snowflake, Sprinklr and Adobe will take a solid chunk of the marketing investments. There will also be investments going into start-ups who are innovating in this area well. Not to forget this advantage of data will also bring some new applications of technologies such as Artificial Intelligence into play quite fast. Most of these developments are considered inevitable and will come at the cost of investments in other areas.

And Then There is the Metaverse…

VR Tech is clunky in its user interface, and the Metaverse is largely a badly animated world with limited use cases beyond gaming. Not many examples of Metaverse in the world of advertising and brands offer any real advantage beyond “the spirit of innovation” – or so is the case at least in the short term. 

While the NFTs might sound like a relic from an era gone by, the underlying blockchain technology has evolved, and has solidified the value of its use-cases. Brands that can benefit from an innovative use of these technologies will certainly create a return for themselves. There is sizeable potential in the use of blockchain and NFTs in commerce, loyalty, and in consumer experience management. Imagining that use, however, requires under-the-hood understanding and a relentless desire to innovate. Those who have it, will win.