Online marketing: The next big thing?

Online advertising is not yet a big business in Egypt and the Middle East, but Google is banking that it will be in the future.

Google’s presence in Egypt and the rest of the region is by and large focused on marketing for the world of online advertisement, a field where the internet giant expects exponential growth over the next few years.

Online advertisement remains scarce in Egypt. Wael Fakharany, Google’s Egypt and North Africa business manager, says online ads don’t exceed two percent of overall advertising expenditure, which reached about US$700 million in 2009. The remaining 98 percent is spent by advertisers on traditional media, like television, radio and print. That might be changing.

“The financial crisis has served us because people who wanted to make advertisement for their companies were looking for alternative ways, so they started listening to us,” says Fakharany, who expects that in Egypt the online share of advertising expenditure will rise to five percent by the end of the year.

In the meantime, Fakharany’s target market is medium and small companies.

“I am not worried about big companies. If they don’t want to advertise with us now, they will later. I am rather thinking of the hundreds of thousands of small and medium companies who want to advertise but don’t want to spend so much money.”

Google’s advertising operation in Egypt started in 2008. Its work is empowered by an agreement with the Egyptian government and signed by the Ministry of Communication and Information Technology. Under this agreement, the state pays Google for advertising Egyptian services and products online in the fields of technology, investment, trade, travel and tourism.

But convincing local businesses to invest in online advertising is not easy. “The internet is normally a socialist construct," says Mostafa Abu Gamra, head of Techno Wireless. "You go on Google, search for something, thousands of websites respond to your question and you don’t pay a penny. There was no way to translate any of the services of the internet into a financial return. But when Google came to the region, it started to establish some mobility between different markets and among publishers.”

Techno Wireless partners with Google in Egypt to provide online media services to advertisers, helping them to plan their online campaigns and target audiences.

Abu Gamra assures that advertising does not compromise the democratic nature of the web.

“Google allows publishers to monetize their content by adding advertisements. They think about what the user wants and how to give him truthful and convenient responses," he says. "There is also a dimension of equal opportunity. As an advertiser, I compete on equal footing with anyone: a kid, a big entrepreneur and a medium business.”

“For the first time in the world of advertisement, it’s not the money that determines the ad quality, but it is the consumers who click on the ad and decide its quality.”

The Google team in Egypt devotes a lot of their time to raising awareness about the differences between traditional and online advertising, which is a more direct marketing tool, where little is spent on production.

Online advertising capitalizes on the vast world of the internet, where consumers are always looking for something. “People are looking for deals all the time, a good book, a good entertainment, a good educational program, a new job, etc.,” says Fakharany.

As part of its marketing of the service, last week Google launched a step-by-step guide for companies and individuals to set up their online ads using AdWords and learn how to monitor interest in their brands.

Abu Gamra’s company, and others like it, complement Google’s awareness raising work about online advertisement. Abu Gamra mentions that among different forms of online advertisement, Egyptian advertisers tend to choose banners, which have their roots in traditional media.

“We tell them that unlike the ad banner you find on the bridge that does not talk to you, the internet is a conversational channel," he says. "You don’t have to do banners only. You can have a YouTube space. You can do a small game that takes whoever clicks to a sophisticated landing page.”

He also says that unlike traditional media, online advertising campaigns aren’t over once they are posted. In fact, that’s when the campaign starts, with Google providing constant information about traffic that helps to refine the campaign.

“For example," says Abu Gamra, "advertisers were not interested in a search campaign," a form of advertising that focuses on optimizing content for search engines. "Now our customers are learning more because it’s the search campaign that makes traffic. We’re still preaching to the market to understand the whole concept.”

Google provides a variety of tools for information gathering, which are shared with online ad publishers to tweak their campaigns.

The message has reached some people in the marketing business, including Dahlia Bishay, the general manager of the marketing firm Incentive House of Egypt.

“No one can deny the fact that the internet is becoming a communication tool in the Middle East and is spreading to all social classes, especially during the past five years,” says Bishay. “Online ads are nowadays the least expensive advertisement tool reaching the widest and most diverse platform of audiences, even in the Middle East.”

Not everyone, however, is convinced, particularly among advertisers. Karim Boulos, owner of BMOE, an office supplies firm, says that the efficacy of online ads depends on whether the target audience is online, such as teenagers. “Advertising for iPods is different from advertising for a detergent,” he says. “[BMOE] are more back-to-back in the field of document finishing products, so I am not sure if my target market are internet users.”

Another challenge facing the growth of online advertising in Egypt is that e-commerce has not yet gained solid ground. Many Egyptians are still concerned about using their credit cards online.

Online ads have not yet achieved a majority share in the global advertising market, but it is growing. By the end of 2009, 17 percent of advertising in developed countries was online.

But Google’s investment in online advertising capitalizes on the no less than 3.8 billion search queries it receives worldwide on a daily basis. It also capitalizes on expanding internet penetration around the world. Approximately 1.8 billion people use the internet worldwide. In Egypt, the government estimates that roughly 16 million citizens have internet access.

With all those advantages in mind, Fakharany claims that he has the perfect job. “We draft the internet agenda in Egypt, for users, publishers, advertisers and creative agencies. We can see where the internet is going in the next years.”

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