GULF

-

Vol. 15 I Issue III April 2011

THE

D

The Gulf's tipping point p.40 Companies to watch p.49

Can firms afford not to be on Twitter? p.56 Social networking p.66

INSIDE:

EXCLUSIVE INTERVIEW ABDULKAREEM ABU ALNASR

CEO of Saudi's Nationat Commercial Bank

PLUS: Will the UAE avoid the turmoil?

Small businesses go big

Mishal Kanoo: What revolution?

Bahrain •••••••••••••• BD 1.0

Kuwait ••••••••••••••• KD 1.0 Oman •••••••••••••••• R01.0 Qatar •••••••••••••••••• QR 10

Saudi Arabia ••••••• SR 10

UAE •••••••••••••••••• DHS10

38 gulfbusiness April 2011

..

CONTENTS

40/ THE DIGITAL TIPPING POINT How far has the region progressed with its digital ambitions, relative to the rest of the world?

49/ ONES TO WATCH

The pioneering digital companies to watch over the next year in the UAE and the Gulf.

-.

56/ CAN YOUR COMPANY AFFORD NOT TO BE

ON TWITTER?

Knowing how to exploit - and protect your brand online is

a must for success.

62/ GADGET GALAXY

Apple, Samsung and HP tablets are battling for domination globally and in the region. Who will win?

66/ CONNECTING

Social networking is revolutionising consumer behaviour and business opportunities.

April 2011 gulfbusiness 39 -

REVOLUTION

Business

201101G TO

ISSUE

TH'E GUlf'S

Driven by business, entrepreneurs, hungry consumers and a restless youth population, the region's passion for

digital has accelerated past the tipping point. Egypt recently highlighted

the internet's breathtaking power; its unrelenting momentum for driving, assimilating and realising change. The future is here.

Welcome to the other kind of Gulf revolution, writes . LAURA COLLACOTT.

40 gulfbusiness April 2011

The figures say it all. Today the Middle East is standing on the cusp of a digital revolution. The region boasts around 65 million internet users - fuelled by a webuser growth rate of 1,648.2 per cent between 2000 and 2009.

While North America already has

a penetration rate of 77.4 per cent, it is forecast that around 60 per cent of the region's population will be online by 2020, up from 19 per cent today. That equates to 260 million users.

In Saudi Arabia alone, 9.8 million

are internet users, and 2.5 million are hooked up to Facebook - out of a population of 25 million.

As growth areas go, this is it. But with this gaping opportunity come many challenges .'

~

"Digital marketing looks like a

dinosaur in this region," says Behhinn Kelly of Hellwa Fashion, an hautecouture blog. "It still shocks me

how far behind the vast majority

of marketing departments in this region are. Marketers in every sector, but particularly in retail, need to get themselves up to speed. We only have to look at Egypt to understand the kind of impact bloggers and online tools are having on the region."

And it's true. Ask anyone and they'll tell you that the Middle East

Dubizzle, is enthusiastic , about the unexl'loited potential in the region:

"The Gulf region is ~ot (Silicon v;;n;y, but theTe! is a great deal of talent and entrepreneurial

spirit here. I meet and am

I encour,aged often by new businesses and web sites that have local, creative ideas. There is still plenty of room to grow, and that is the exciting part."

There are key areas of growth. Social networking is huge in the region; people are turning to the net

for career advancement and job searching; mobile phone apps are big business; auction and classifieds sites are gaining traction; digital marketing is the subject on

everyone's lips; a-commerce is

a nascent concept with stellar

growth potential.

Alexander McNabb of Spot

,.pn PR, a veteran in the Middle Eastern digital scene remembers back to 1995 when internet was

first introduced to the region, spurring debate on whether it was good, whether it was anti-Islamic, whether it would swamp the Gulf with foreign content. "One journalist thought it was a passing fad," he smiles, "now we're having the same debate regarding social media.

1 ~I

I

"Our relationship with internet content is deeper than with more passively generated content. We choose. It's the hunter-gatherer instinct. The Tarzan effect."

- ... "" ..... ,.,. Nakad, managing partner of Brag, a live marketing agency, is every bit as emphatic

about social networking developments. "Social media is no longer a nice to have within a marketing mix but a must. Big advertising and media buying

agencies need to realise and accept this or risk going out of business."

Modern marketers are under pressure from the still relatively small digital sphere. Firstly, they must create dedicated web content to supplement traditional marketing channels.

"What used to be a repurposed print ad plastered on a website,

has become a potential source for a campaign-wide idea," says Raja CEO of Leo Burnett, MENA. "Tllere's

IIOur relationship with internet content is deeper than with more passively generated content. We choose. It's the huntergatherer instinct. The Tarzan effect."

based digital agency Prototype, agrees that the medium needs to be more adaptive, "breaking away from the traditional ways of communicating information to consumers" and become more focused on meeting customer needs. "It's about creating experiences for users that are engaging and result in referrals and recommendations," he says.

However, at the moment,

in this region, referrals and recommendations are as high as

April2011 gulfbusiness 41

digital marketers need to aim. E-commerce is relatively tiny compared to developed regions, in large part because of the low penetration level of credit cards.

In a region devoted to the humble cash and cheque book, driving sales online is a formidable task. But one set to change as mobile-phone payments begin to be introduced, hop skipping over the credit card requirement. With practically every Middle Eastern palm clutching a mobile device, it stands to revolutionise online shopping here.

As marketers seek to disseminate their messages and charm customers, they must do so in a more targeted, less 'scattergun' fashion.

"Today's advertisers have budgets that are under much closer scrutiny; they need to ensure their campaigns are hitting exactly the right

as online consumers ar ever-more discerning about the rel vance of the advertising content pr sented to them," notes Ahmed Nass vice ~resident and managing directo Yahoo! Middle East.

It's a requirement well suited to digital. "The beauty of digital is being able to measure precisely who listens and when they listen," says Steve Pulley, director of ARN Digital. This can mean anything from ROI tracking to syndicated country surveys and sophisticated reports that measure the benefits of digital marketing precisely.

There is a lot of so-called 'clutter' that companies should avoid. Lex Bradshaw-Zanger recommends avoiding simple, easily ignored banner ads, and instead develop web tools that either serve a purpose

Lex BradshawZanger, Regional Director, Digital Strategy & Innovation

(for example, GM's in-market search program) or adds value, utility and fun to the online experience (Kellogg's banner games, for example).

In fact, he believes that gaming

is another growth area for the Gulf. "It's waking up in the Middle East. Over 38 per cent of online gamers worldwide are located in the region and this can be an enormous platform from which to start. Egypt and KSA in particular have massive populations." Creating internet applications that serve a function, especially entertainment, will be key in the future to driving traffic and those crucial adWlrtising clicks.

A faster growing sector online has been that of online recruitment and professional networking. Linkedin has 101 million members worldwide, of which 2.6 million are in the Middle

INTERNET USERS IN 16 ARAB COUNTRIES

By end of 2009 there were 41.8 million users

INTERNET USER PENETRATION %

40%

20%

11.8% --ALGERIA-- 4,207

36.3%-------------BAHRAIN-- ....... 420 8.8%--t----IEGYPT·----<--------6,829

17,4%- --JORDAN-- 1,039

40.0% t----KUWAIT 1,395

28.0%------->--- LEBANON ----1,110 1.5%_MAURITANIA-47

18.9% --MOROCCO ---<- 5,941

13.1% --OMAN--- •• 391

11.5% PALESTINE - 459

25.6%--------- QATAR -417

39.9% -SAUDIARABIA- 10,000

16.3% >----SYRIA ----<----3,284

15.9% TUNISIA 1,656

51.3% 1---- UAE 2,371

9.9%----- YEMEN 2,261

60%

42 gulfbusiness April 2011

0%

o

~ ~

I

i

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~~ S_OO_R_C_E:_~ __ m __ ~W __ ~_G_R_OU~P

INTERNET USERS (10005)

3,000

9,000

6,000

12,000

- Business

2011DIGITRL

ISSUE

150

50

100

------------------------~--------------------------------------~536.6m

550

ENGLISH (in millions) 1-__,1---t--+--t---f---t--+--t--I-----!--+--r--f---t---f--t--I-----!I---+--+--+---1 o

East. Curiously, the site seems to have curried more favour with male members of the population, with 77 per cent of Middle Eastern profiles being held by men.

"We have seen tremendous change in the ways and speed with which job matches are being made as enabled by the internet," says Llma Ataya, chief marketing officer at Bayt.com.

"Jobseekers can reach a wider audience of top employers and vice versa and recruitment matches can be made directly via the job site without the need of or interference of an intermediary. They are now able to refer to Bayt.com salaries to compare their salaries to their peers before making job change decisions; they can read the industry's latest literature derived from our polls and surveys."

Not only this, the company has

also noticed a trend towards greater employment opportunities in the digital realm. Analysts anticipate that digital skills will be very much in demand in 2011 - students take note.

Take note, too, of the demand :or Arabic language content. The .Arab Media Outlook 2009-2013 report, released by the Dubai ?ress Club in conjunction with ?ricewaterhouseCoopers (PwC)

200

250

300

450

350

400

500

444.9m

153.3m

NUMBER OF INTERNET USERS BY LRNGURGES

SOURCE: MCCOLLINS MEDIA

Arabic is the 7th most popular language on the internet

points clearly to a demand for Arabic-generated content. "There

is undoubtedly a dearth of Arabic content," says McNabb, pointing out that Wikipedia is said to be opening a regional office to encourage the development of more content.

The report suggests that the ever-increasing internet penet tion and use of social platforms ill be key mediums of growth. U ng the Arabic language, in busin ss, helps to influence the right dec sionmakers in the region; so ially,

it facilitates dialogue be ween governments and comm nities.

But this same cultura advantage can also function as a n gative factor says Omar Christi is, the vice president of the Inte ational Business Alliance Group nd founder of ArabNet. He sa s that an

discourages innovation by reminding us that it fuels creativity, especially online where political borders almost cease to exist.

:Censorship has its own wellintentioned purpose," muses Mohamm~ Areff, managing director, Gulf & Pakistan at Avaya, pragmatically. "Innovation on

the other hand allows one to explore new ways of doing things. As long as this is within certain boundaries, it can flourish."

Few see why censorship should affect innovation. "It encourages it; life is full of constraints, be they about what we can do, how we can do it, or even with whom," says Bradshaw-Zanger.

"Alcohol and tobacco marketing the world over is heavily controlled but this doesn't stop some of the most creative marketers from developing

one-to-one programmes that can communicate with consumers.

"The digital landscape has changed a great deal over the last two years," nods Kelly.

"The change is slow and

frustrating but we are getting there. Twitter used to be blocked and flickr

a business that has a fairly igh risk of failure at the outset, and of losing face is a limitin factor. So, too, are family ties to business and an apparent reluctance to break out alone.

Internet censorship is a barrier of perception, more than practice. Nakad rejects suggestions that it

2011 gulfbusiness 43

FIXED BRORDBRND INTERNET

UAE, Bahrain and Qatar lead broadband adoption in the Arab world*

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20%

15%

14.6%

11.6%

10%

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was only unblocked in the UAE in late 2010. Unblocking them was a good move." So censorship barriers are arguably being eroded.

Infrastructure has, however, undoubtedly been a barrier to progress. Compared to other regions of the world, bandwidth is slow - "far below global standards", as Jayant Bhargava of Booz & Company puts it - and connections are expensive.

That is changing, not just because the infrastructure is being steadily upgraded, but

also with the advent of internetenabled smart phones and mobile internet devices. "My grandmother

Note: * The figures for the countries are for end of 2009.

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is learning to use the internet for the first time on an iPad," says Omar Christidis, organiser O£I ArabNet digital summit. "There are going to be more than 50 ~ million new internet users in the next few years. These people will

r come through mobile devices J because they are comfortable I with them."

Observers believe that the

region will soon be competitively connected. "Changes are going to happen overnight, particularly

in markets that are still heavily controlled by monopoly operators," says Bradshaw-Zanger, "Rumours of upgrade to 3G mobile broadband

..... C-l a:: u...

..... en a:: u...

"Participants described feeling fidgety and kept reaching for their mobile phones even when they weren't there." - Dr Gerodimos of Bournemouth University comments on new research showing that students who stayed away from social networking, emails and phones for 24 hours suffered withdrawal symptoms similar to drug addicts.

44 gulfbusiness April 2011

Omar Christidis, Oraganiser of ArabNet Digital Summit

in Lebanon abound. Gone are the you needed a fixed line at home an

tied up to it. Today we have wifi an

a number of new devices to get co

With the fast improvements in infrastructure and the swift growth in users, the region finds itself almost t the critical mass for substantial develo ment.

For companies, in terms of advertis ng and media, "digital media is very close t tipping point," according to Bhargava. "The e is a clear trend towards digital; it's th time when consumption of digital picks up t an extent that it starts cannibalising tradi onal media."

The trick will be for companie to manage their branding messag s across the diverse, mixed platform, tiJIli g the change in budgetary requirements fit with the evolution of the media. No asy task.

Doors are already be inning to open.

Christi dis is enthuse about the level of innovation and e epreneurship visible in the current eli ate. For the youthful, techsavvy po arion of the MENA region, there is eat deal of opportunity to break - and exploit - the digital realm.

He pinpoints the mega-deal of 2009 when Maktoob, one of the region's most popular portals, was purchased by online giant Yahoo! as a pivotal moment in the Arabian online revolution.

"The deal energised the private sector," he says. It certainly demonstrates to young colts what can be achieved with some grit and determination.

Christidis has nominated 2011 the year of the entrepreneur and hopes through his and other schemes to incubate more start-ups.

"Interest in entrepreneurship, the web and start-ups has skyrocketed," he says, "both in the public and private sectors. It is critically important that we take this opportunity to harness this wave of innovation and optimism, to sift out the best ideas and truly get behind them with the financial support and an ecosystem that lets the best of these many ideas thrive and flourish." •

Sometimes the only thing worse than not being talked about is ••• being talked about

ALEXANDER MCNABB, Group account director, Spot On Public Relations Twitter @alexandermcnabb

The changes in the way people are behaving have

. been almost insidious. If you weren't actually looking for them, you might well have missed them. It's not across the board, but we have certainly passed the 'tipping point - consumers have, moved online in the Middle East and this movement has had a fundamental impact on the way they react to brands, companies and governance.

Today we are looking at the 'empowered consumer' - a person who can, and will, Google any

new concept, phrase, word or even person they encounter. What they find when they do means they have access to more information, and more sources of information, than we have ever seen before. They also have access to something more powerful than raw information. They have access to opinion.

Consumer opinion online is

a game changer. Before, angry customers would wash up against the high walls of the call centre

or the disinterested clerk sitting behind plate glass in the bank's security-guarded premises.

There was little redress beyond

a strongly worded letter to the newspaper which likely wouldn't

be printed - or trying

journalist in yet another

disaffected customer. So many consumers learned to accept things the way they were. You could always vote with your feet, unless of course we're talking monopoly telco and utility markets, in which case you just had to put up with it.

Now consumers share opinions online with remarkable reach. That angry customer could

have a blog with hundreds, thousands of readers each day,

a Twitter account that reaches thousands more (and, through the power of the re-tweet, massively incremental reach) and hundreds of Facebook friends. By sharing their disaffection, anger and disappointment, today's consumers are able to cause enormous damage to brands.

The brands that are succeeding online today in the Middle East are already creating valuable relationships and 'first mover advantage' that their analogue competitors are missing out on.

Digital campaigns are hard to do well. It's about integrating your website and online public assets with social media platforms - and accepting

that you've lost control. The tide of opinion means your communication online needs to

Business

2mUIGITRL

ISSUE

be a two-way street. You actually have to talk to those upset customers, take their opinions on board and change the way you do things as a result of their feedback. Because if you don't, your competitor will.

A recent poll showed that 83

per cent of people in the Middle East are influenced by friends' recommendations when they purchase - 70 per cent are influenced by online reviews. Over 80 per cent of '!Witter users had

a preference for brands they had encountered on Twitter; Some 88 per cent of MENA internet users access the medium daily - spending more time throughout the day on the internet than they do with television, radio or print media. There are more Facebook users

in the region (23.8 million) than people who buy a newspaper. And people spend more time updating their social networks than they do reading a newspaper - because increasingly, they're getting

their news, views and sources of information from online sources.

Control of the marketing megaphone has passed to the consumer - they're the ones with the voice now. Screaming 'the customer is king' or slogans about how you're 'customer-centric' at consumers won't work anymore

- you're only as good as your last engagement with your customers. You actually have to make sure you are willing to live up to

your values, meet your claims of standards and listen to the people you purport to serve.

Because if you don't, they're going to do the worst of all things. They're going to talk about you. •

April2011 gulfbusiness 47

eRN YOUR COMPR, Y RFFORD NOT TO BE ON TWIT ER?

Knowing how to promote - and protect - your brand online is a must for your firm's success.

There might be no such thing as bad publicity, but companies have long realised that reputation management can make or break. Rapidly exploiting the niche, PR companies turned media and crisis management into an art form, using traditional media channels to mould and manipulate successes and failures to a company's advantage.

It's one thing when you only have print media, TV and radio to manage, but now, with a proliferating number of online channels

too, trying to keep track of your brand - and customers - can feel like a Herculean task.

Overwhelming consensus among those in the know suggests that online is no longer an optional extra.

"Over the past five years digital has risen from being a 'shiny cool thing to do' to an integral part of business strategy

for most consumer brands," says Jassim Ali, regional director of digital developme for Omnicom Media Group.

increase in the amount of user time spe on social media.

In the Middle East, 0 of the fastest growing online regions in t world, similar leaps are being reporte

"Repo such as the Arab Media Outlook have

Husam Jandal, senior marketing consultant, WSI

forecasted a significant shift towards online strategies in 2011," says Alexander Rauser, CEO of UAE-based digital agency, Prototype.

"You don't have to be a psychic

to forecast that digital will play

more and more of a role in business strategy. Internet users in the

Middle East are very active on social networks as it gives them a way to communicate with each other and the world. This is where consumers can be found now, and brands will have to meet them there."

Lex Bradshaw-Zanger, regional director of digital strategy and innovation at Leo Burnett MENA agrees: "Today if you are managing a brand then you need to be managing its reputation everywhere - this means not only the product and communication, but all media where it appears and this mJst definitely includes social media. If you aren't in control of your brand on TWitter then the chances are that someone else is managing it for you ~ and this doesn't always lead to positive results." If

conversations are occurring about a brand, the company should make its voice heard.

IT AIN'T NECESSARILY

SO ...

But it seems it isn't a 'must' to everyone. Even some of the biggest players have opted out, including global mega-

company Apple, which has next to

no presence in social media.

"The power of Apple is the

they have so many fans the

brand," continues Bradshaw

praising the company for release of information that it to manipulate social l.ou,au.upJLi> without active involvement.

Social media marketing for everyone. "It isn't a lllJ ..... ere

absolute necessi

"It is effective for B2C brands depending on their product andJ services, but B2B companies would have better results from other forms of digital marketing such as search engine advertising, SEO, and display advertising, to name just a few."

Nate Elliot, principal analyst at research firm Forrester, points out that, for all the hype, social media forms a relatively small cut of the digital marketing landscape; the bread and butter forms of online marketing remain SEO (Search Engine Optimisation), email and online display. He claims that to focus on this smaller segment of online at the expense of the basics is "madness". His advice to organisations is to have a presence in this sphere but focus efforts on streamlining efficiency in 'old school' digital methods.

But to a greater or lesser extent, an online presence - and a social media presence - is a business advantage. Ali draws a parallel: "Think of it as a cool party to which you've been invited but you're glued to the wall, not daring to make the move and join the others and

- Business

201101 IT L

ISSUE

have a good time. The brands that will succeed in the future are the ones that evolve in that social space. Consumers feel validated and treated seriously by brands that engage with them, the rest will eventually fade in the background."

Seemingly aware of this dynamic, companies are steadily increasing investment in understanding

their customers' online behaviour and tailoring their presence and campaigns accordingly. In the early days of marketing communications, businesses strove to develop reach - quantity of a defined target audience - and awareness - consumer knowledge of branding and messages - through a variety of 'push' marketing strategies. Today that

is transforming progressively into 'pull' mechanisms where consumers choose which brands they interact with and elect to participate in conversations with them.

Research is necessary in

such a nebulous, fast-changing environment. The challenge for marketers is understanding the modern audience: the uptake of online media is strongest in the youthful population, a demographic burgeoning in the Middle East.

'Generation Xers',

while their younger consumers are so called Millennials (those born in the 1980s); there is a

huge gap between the two."

April 2011 gulfbusiness 57

"There is a huge generational dissonance between marketers and their younger consumers," says Ramzi Nakad, managing partner

of BRAG, a li marketing agency. "Marketers are eneration Xers', while their youn r consumers are so called Millennials (those born in the

just about every.:J:bing."

The question for businesses then, having made the decision, is how

to develop an effective social media strategy. The medium does not have just

one business function and it can

be unclear who should manage an online presence. It can be utilised for research and product development by seeking consumer opinions, needs apd attitudes; for driving marketing messages about new products

and promotions; and for customer service, dealing with complaints transparently to boost credibility.

Online networking can serve as an internal tool too. Many companies may choose to prevent access to social sites in the office, concerned of the amount of time squandered by employees during the working day. But there are roles for social media internally. "An often overlooked aspect is its role in intra-company communication and knowledge sharing," says Ali. "Service-led categories, such as aviation, travel

and telecom, have a massive amount of information potentially worth millions of dollars but that is locked in with a few employees. Unlocking synergies and sharing ideas through social networking will enhance companies' success."

The trick lies in identifying the role you want your online presence to play and building intra-departmental collaboration to support it. And once a role is defined, organisations must build an appropriate brand voice that will appeal to their customers, an area that in itself can be fraught with difficulties.

Surveys have shown that

'\

the tone and messages used in

communications must be carefully pitched so as to keep consumers involved. Spot On PR is one of the few companies conducting surveys

R REGIONRL COMPRRISON OF CELLULRR PENETRRTION

COUNTRY

PENETRATION %

2

~

i

~

!

~~ OO __ UR_CE_:~ __ B_m_~_S_O_RG_R_OU_P~

UAE 205.5%
SAUDI ARABIA 178.2%
OATAR 151.5%
OMAN 132.9%
BAHRAIN 128.1%
KUWAIT 114.1%
JORDAN 101.4%
TUNISIA 93.5%
ALGERIA 92.3%
MOROCCO 80.3%'
: . • . :'. PALESTINE SYRIA YEMEN

53.2% 48.2% 35.9%

58 gulfbusiness April 2011

MAKE YOURSELF

USEFUL

How can you incorporate social media so that it complements your business operations? Look at the example of IBM for inspiration. The computing giant saves $100 million annually through customers using its online 'developerWorks' resource instead of contacting support. The programme has a base

of resources populated by

IBM that is enhanced by mingling corporate content, user-generated content and forums. The answers found within more than 30,000 articles saves the company thousands of business hours. As a reason for businesses

to consider their own digital media mix, it's compelling.

R

-

CONNECTING

WORD OF M9UTH

Husam Jandal, senior marketing consultant at WSI, a company that provides digital marketing solutions, believes that it has

put the power in the hands of the people, not just on a political level, but also on a consumption level. "Social media marketing and networking has given the upper hand to the consumers, it's all about word of mouth and the consumer, not the brand."

Companies can no longer rely solely on one-way broadcast branding to market their products - they have to interact with their evermore- feisty, rights-aware customers.

"Customers are more demanding today," agrees Paliyath. "They are

aware of global standards and expectation

is growing accordingly."

Facebook and local digital networking sites offer huge potential for engaging hearts, minds and wallets, writes LAURA COLLACOTT.

That the Egyptian government closed down internet and phone networks during the recent uprising is perhaps the most telling sign of the influence the social media medium has garnered in recent years. Today, there are about 200 million accounts on 'IWi.tter, a small but growing proportion of them in the Middle East, and more than 15 million Facebook users in the MENA region (according to the latest official figures from May 2010).

The surge of popularity

in social networks isn't just affecting the way we interact with friends, family, colleagues and politicians; it's affecting we shop too. No longer to rely on rnlnn,,,nu_,,r(1,Ul

information and printed customers use social nAl'lATr,1rln

information about products and services before they buy. And

the audience accessing these resources in the Middle East is growing apace.

"Look at Facebook," says Jassim

66 gulfbusiness April 2011

Ali, regional director of digital development for Omnicom Medi'a Group, emphasising the relevance of social media channels in

the Gulf. "Its fastest growing audience demographic is people in emerging economies. Twitter is about to localise its interface for the Arab world. It's no surprise considering the role social

media platforms are playing in channelling the aspirations of the region's populations."

"The major markets of the Middle East like UAE, Kuwait, KSA, etc.

are the fastest growing markets

to ensure they're at the front end of digital developments. "Consumers today are spoilt for choice and have limited attention. You need to be just as savvy as them if you want to market your brand to them," Jandal says. "It's about reaching out to and connecting with them instead of just feeding them slogans."

The marketers fluff it up, advising companies to build an 'actively engaged community around its

key brand messages' in the social networking sphere. In real terms, this means engaging customers

in transparent, honest dialogue

to provide customer service and accessibility. Smart corporates

are even using customer forums

to tap into their most avid fans

to help in developing the next generation of products.

,

HONEST COMMUNICATION

To take the shopping process chronologically, consumers use

social networks to research products prior to purchase. Where formerly potential customers might have asked friends, family and, notably, a company's (primed and commissionbased) salesman for product advice before making a purchase, today, they ask the online community.

"Fifteen years ago if you had a question about which camera you should buy, you would go down to the store and ask the person selling the camera," says Sim Whatley, co-founder of

WHAT IS SOCIAL MEDIA?

Social media is the process of gaining digital traffic and attention through social media sites. Such sites are those that provide novel social actions, such as the sharing of short messages (microblogging), blogging, soclal networking (sharing updates, photos, events and invitations), forums, online cornrnunltles and professional interaction. It is a set of online tools that allow people to collaborate, connect and share online.

WHY IS IT SUCH A HOT TOPIC?

the addition of features such

as comment, blog, community,

forum, reviews, etc, has created massive expectations in terms of

transparency and democratisation of information amongst consumers,"

Business

2011UIG

ISSUE

says Ali. "Today they can figure

out the most suitable products for themselves without intermediaries such as trade media, sales people and catalogues. They inform each other and even buy together to harness the full scale of their combined power." The people really have the power.

Nor is it just user reviews. Social media channels are also being used to open up transparent customer service channels in which customers can speak directly to the company, seeking assistance, advice and feedback. It's been touted as the next big CRM (customer relationship management) tool.

NOWHERE TO HIDE

For companies, it means fewer

places to hide. Is that a good thing, effectively harnessing public opinion to separate the wheat from the chaff? Whatley advises caution: in the relative anonymity of the internet,

perceived 'friends' and anonymous

MENA'S COUNTRY MEMBERS
TOP FIVE EGYPT 5 MILLION
FACEBOOK MOROCCO. 2.7 MILLION
COMMUNITIES SAUDI ARABIA 3 MILLION
TUNISIA 2 MILLION
UAE 1.8 MILLION
SOURCE: SPOT ON PUBLIC RELATIONS reviewers can as easily be a company marketer pushing their product as

a genuine fellow shopper. Not to before traditional beginning to invest in some form of

mention the obvious disparities that media channels social media presence to promote

arise simply as a result of subjective lose their majority their products aad services. "The

differences of opinion. Caveat influence and social -, thought, effort and investment that

emptor, as the Romans had it. . media can be wholly

"We are seeing the changes in ~ harnessed for brand

consumer behaviour everyday," says building and marketing.

Lex Bradshaw-Zanger, Regional Bradshaw-Zanger believes it "will

Director, Digital Strategy and probably have to go on for a while

Innovation at Leo Burnett MENA, before consumers move over to

downplaying the novelty of the prioritising corporate messages

latest marketing phenomenon. - and let a brand build 'equity' -

"The power of connecting people through social networking."

is changing the way that we interact Regardless, the population is

and also make decisions. Not only migrating to social media; businesses

this but it is also changing the must be there to meet them.

impact that media and advertising And they are. Ali Sinaei, head of

can have on forming opinions. Ten online advertising at Bayt.com, sees

years ago you had to believe the encouraging signs that most mid

ads or try it yourself; today you can to large sized corporations, both

connect with a tried and true review globally as well as regionally, are

before buying anything."

Ali echoes this. "Beyond brand communications, corporations have had to become increasingly open and transparent to their customers and other key stakeholders. It has opened up an unprecedented flow of information which can potentially lead to better, faster and more consumer-centred decision-making within companies."

However it will be some time

68 gulfbusiness April 2011

EGYPT

goes into that activity varies from company to company, but the trend is undeniable," he says.

LOCAL RELEVANCE

Catering to business and consumer demand in the region, the major global players are tailoring their products to the Middle East audience, with Arabic interfaces

and specific content. "The social media majors, such as Facebook, Twitter, Zynga, You Tube, Quora and Foursquare among others, all started small, catering to a niche or select demographic," explains Ali.

"They eventually gained a solid

"Beyond brand communications, corporations have had to become increasingly open and transparent to their customers and other key stakeholders. It has opened up an unprecedented flow of information which can potentially lead to better, faster and more consumer-centred decision-making within companies."

understanding of their user ase and adapted and tweaked their roduct to appeal to a wider group This also means that they will go af er not only the global hip crowd but also

should dominate, and where cultural sensitivities are more heightened.

Ali Sinaei, head of online advertising at Bayt.com

Business

2011DIGITRL

ISSUE

opportunities in the region for

online entrepreneurs to exploit,

even if challenges exist in the form

of resources, infrastructure and breaking the robust relationships

that exist in global advertising. Regional companies are likely to

use a combination of international and local sites to develop eminently appropriate channels to market their products, standing, for now, alongside traditional media marketing methods. As Ali concludes: "The success of

local players in China, Asia and France all show that if wielded effectively this could be a powerful trump card to build a sizeable user base and holding their ground against international giants." •

I

"The local players are competitive and smart," says Ali. "Anayou, Watwet, Jeeran and Ikhis, for example, are promising examples with exciting prospects in the region. They appeal to the burgeoning population of young, educated and increasingly outward-looking Arabs."

The key differentiator, aside from language - and what is likely to be the deciding factor in success or failure -lies in providing a uniquely regional answer to Middle Eastern needs, without simply mimicking international sites. And local players are at an advantage in that they boast proximity to the markets and fundamental cultural understanding.

There are substantial untapped

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