STRATEGY AND BUSINESS IN THE MIDDLE EAST

Some interesting snippets from the China Lux Conference in New York, May 2012 http://chinalux.eventbrite.com/

So the former head of investments for N2V has announced a new VC fund called Sinbad Ventures which will “invest in early stage mobile and web startups, helping them to connect with investors and mentors in silicon valley”.  $500,000 will be provided in return for a 25% stake.  This sounds reasonable.  Something I was thinking about, I was even ready to give more of my company away for this amount of investment. 

Takatkah continues:

“The goal is to focus exclusively on startups addressing a global market, says Takatkah. “A lot of startups are working in Arabic and addressing a local market. Plenty of investors are invested in them because they are considered low hanging fruit. But those trying to compete on a global level are not welcomed by the region’s investors because they come with higher risk. We are focused on those trying to create a global strategy.”

So my first reaction was, WHAT? We’re in the Middle East, we have loads of money. We have to diversify away from oil revenues, there are some government policies in place to support this, we should be able to get local investors and mentors no? Then I thought, well how can we compete on the global level? Is it a problem of capabilities from the startups?Given some of the lack of slick polished design and functionality on some of the existing apps and portals, one might think the answer is yes. But there are some real hidden gems around.

Then I thought, well still this is something very attractive to me, but with my ecommerce idea, I can hardly take it global because there are already people doing it in other parts of the world - that are doing it better.  So what is the definition of “global” ?  Would I still be eligible?

Qatar seems to have its finger in every pie across the world, and yet apparently we are struggling to find local investors and mentors that can take our startups global. So where is the problem?

Some might say it’s because whilst investors here have money, it’s not just about the money it’s about the experience and understanding of the digital environment that’s lacking.  And I would agree.  But then my solution would be to bring experts over to a hub, or set of regional hubs and really understand the unique issues that face the region. A bit like the Geeks on a Plane initiative or Dave McClure’s 500 Startups.  Then have those people impart some of their knowledge, funded by local investors perhaps.

Let’s not forget a lot of innovation and solutions come up as a result of the local issues we face. Some problems could be “global” in nature but the way in which different cultures overcome those problems vary, not to mention the syntax that people use when describing those problems describes a very different reality from region to region.

I worry that the goal of Mr Takatkah’s fund to link up with Silicon Valley types might be the wrong area for him to focus his global aspirations. I feel that India, far east Asia and potentially Africa are more similar in nature to the Middle Eastern society and economic landscape than America is.  There are excellent projects coming out of South Korea, Singapore, Japan, China and India when it comes to digital.  With the large percentage of Asians in the Middle East not to mention the continued influx of Chinese tourists, surely we should be looking to build our digital expansion based on the unique mix of cultures and influences that only occur in this region?

I would love if some of that $10 million (their target of fundraising) be spent on media campaigns which can alter people’s mindset and stimulate them to start being entrepreneurs in the first place.  When we talk about an ecosystem, it’s not just the money, it’s not even the money AND the expertise, it’s the money, the expertise AND the desire from actual entrepreneurs to do something.  

We are currently in a stage where most native residents of GCC countries won’t work for private companies, because those companies haven’t adapted to the local cultural requirements, meaning that potentially a lot of the skills to compete on a global level are being missed out on.  Could we not incentivize some of the youth to participate in private companies here, with a performance based bonus of being sent to a Silicon Valley (or European / Asian equivalent) to learn how to build their own company? 

This is the presentation and narrative from the talk I gave at the recent IAA workshop in Dubai. 

I was unable to embed the actual slideshare here, so if you click on it you can view it in a separate window. Since most of the presentation is pictures, the text below might be more useful:

Storytelling

People still want to be told stories and stories will all have the same basic order as they always have. What has happened is that people can control the stories, adapt the way they are told, delve deeper, break them apart, share them, add them. In the same way someone can take a story told to them verbally and adapt it

Do we all want to be interrupting the storyteller every couple of minutes? Do we want to manipulate it so much that stories stop being tales and just become chapters we can delve into?

We will watch TV shows through a TV (and a few other places). How they arrive there will change. What you can do when you watch them there will change — but often how you will interact with what you are watching will not be through the TV set but via other devices you have around you

NEWS AS A STORY

In an era when Americans increasingly turn to laptops, smartphones or ipads for routine news and headlines, CNN continues to rely on the business it virtually invented on cable: covering breaking stories.  “our bread and butter is in depth coverage of breaking news” says CNN worldwide Managing Editor Mark Whitaker.

It’s a strategy that works well when news breaks. When big news stories subside however CNN slumps back into 3^rd in the ratings.  The problem with big news networks is that they can’t quickly monetize surprising news events that bring in the huge audiences.

 Networks sell up to 70% of their advertising time nearly a year in advance, the remaining inventory is held back and sold at more expensive rates, at up to 15% higher to companies that want to take advantage of breaking news. 

CNN and other networks can be more nimble with their websites capitalizing on jumps in traffic by selling new ads which take just hours or days to kick in.  CNN’s primary differentiation is the ability to connect multiple screens.  More than 80% of their advertisers buy both TV and digital.  CNN.com led MSNBC.com in unique visitors for much of 2011

Google shows that one of the most viewed topics online in the Middle East is news.  

News is so in demand that Isam Bayazidi, CEO of Ikoo which represents the advertising interests of more than 120 regional news portals in the Arab world says the ad rates here are significantly higher than in the US or UK, leading newspaper portals – websites – sell at 4 to 5 times the rate what those abroad do.  A UK newspaper banner ad is about $8 - $10, here its about $30 - $40 if not more

Plus 7 did a survey in the UAE that showed more than 50% of respondents use their mobile multiple times in a day to access news amongst other things.  In fact those age 36 and above primarily use it to get the news, the younger cohort prefer to use it for games and social networking. 36 – 50 year olds tended to use mobile heaviest in the early morning and in the hours before 12pm.

Sky News Arabia has just launched, with the same focus as CNN.   They say they will “focus on straight, unbiased breaking news - light on pre-packaged programming and heavy on live footage” 

“Where we are different is we recognise that viewing habits have changed,” said Nart Bouran, Sky News Arabia’s director of news.   “We are built to go live, any time, while others will go to a ticker while they’re running a recorded program.”

FOCUS ON THE USER

Perhaps the most significant danger for content publishers is that we now have a marketing perspective which says  “the publishing sites on which the ads appear are unimportant”.

The goal is to reach people with particular characteristics wherever they show up.  The decoupling of audiences from context is a profound change.  Traditionally ads were placed where the environment of editorial matter or programming would fit with the commercial message.  Food ads in magazines about recipes for example. 

However, “who a user is, is now becoming more important than where users are”.  Thus, I would want to see different types of ads on my mobile than on my desktop and on my tv.  And the user might be different things in different stages or environments.

Have we really got a grip on understanding the user in the Arab world? Let’s have a look at if people are engaging with our commercial messages.  (CTR not the only indicator of success however)

According to Google’s research in Saudi - men more likely to click on ads on both desktop / laptop and mobile (female an underserved segment – we must try harder!)

For Desktop / laptop – 50% rarely or never click on ads across the whole sample

For Mobile – 42% rarely or never click on ads across the whole sample

USER EXPERIENCE

We want to start thinking about the type of experience we want to give our consumer. We can’t just say CNN or Sky News attracts “the business professional” – which is very generic. Rather than based on just the type of content that our ads sit next to – if there is breaking news about a plane crash obviously we won’t be showing ads for Emirates Airlines –we need to now think about what state of mind and what device they are using.  

Perhaps this will be a bigger predictor of conversion than just audience mapping.

Someone using a computer at work, may have the news website open and will flick to it occasionally for breaking news. He may also have his social networks open and receiving news in short snippets from there.  Perhaps the creative / communication message should be that the news station participates in the social networks and invites the user to engage in more rich experience on its website and delve deeper into its content, and perhaps register for more frequent updates etc.  

Those accessing on a tablet / mobile who are in transit will benefit from ads that perhaps relate directly to their surroundings. If they are in the airport for example, and there are digital screens with news, and they have their mobile open – they might wish to be directed to the nearest coffee shop so they can digest the news at leisure.  Coffee shop and news may be unlikely bedfellows on paper, but as we can see, in this context it makes a lot of sense.

The rise in cookie based targeting, ad exchanges and real time bidding will probably have the greatest influence on communication strategies across these 3 screens. As more and more information is collected across sites, registrations requirements, device usage and more, the ability to serve up a specific message on the fly will be extremely valuable to advertisers. Clearly the more areas one can capture information about the user, the better communication strategies you can develop.

THE CHANGING RELATIONSHIP BETWEEN ADVERTISERS AND CONTENT PUBLISHERS

Rishad Tobaccowala of Vivaki said in 2010 “Marketers haven’t ever wanted to underwrite the content industry – they’ve been forced to” 

He says no longer will advertisers pay to support news, information or entertainment around the ads – and this will mean the publishers have to play by the advertisers new rules.  Media buyers are already eroding the power of Web publishers.  The only way forward is the principle of personalization that will shape news, information, entertainment and increasingly, advertisements.

Research conducted for Yahoo by Publicis found that an ad customized to a person’s interest tends to work as well on a web page unrelated to that interest as it does on one related to it. 

Lisa Donohue of Starcom said “content has taken a center stage in how we go to market for clients and consumers are demanding more from entertainment in the world of digitization, personalization and interactivity”.

Personalization can mean material created for an individual based on that persons profile, on the other side, content doesn’t change but specific pieces of content are pushed to a person whose data suggests they have found similar content interesting in the past. 

It is quite possible today to change aspects of audiovisual programming and games based on the social background of an individual whose data suggest that he or she will purchase a product, however this can be expensive and require faster computer processing that most people have access to.

Old Spice personalized replies (using Isiah Mustafa) is a simple example of this, also, Coca Cola’s Polar Bear ads at this year’s Superbowl were another excellent example.  Between 20 – 30 pre recorded videos of animated bears acting out what could happen in the game were uploaded and then deployed live, based on the outcome; whether a team dropped the ball, scored a goal etc.

TRA, Inc is helping A&E Television networks increase their ad dollars by matching ads seen on TV programs by households with products they are actually buying. For example, if TRA sees a trend where households who watch whiskey advertisements on Mad Men series actually buy a lot of whiskey, then A&E can go to the different whiskey companies show them the data and tell them to allocate more ad dollars during Mad Men episodes

For the MENA region,  Supermarkets can collect purchase data at user level through loyalty cards. Cable providers (telcos, osn, etc..) collect return path data at the user level. Data Management Platforms like www.nPario.com  matches the two and come up with insights above. Everyone makes money and customer is happy since they are getting a better ad experience.

EXAMPLES OF HOW HOTELS ARE DOING IT

Customers at the 10 Hilton Worldwide brands will receive free 24-hour access to digital content from Gannett publications, including USA Today, under a new agreement.

The offering will begin phasing in this summer and will fully roll out in the fall. Content will extend from international news to local information such as restaurant reviews. Print copies of USA Today will continue to be available.

Customers who are members of Hilton Worldwide’s loyalty program will receive access to additional online entertainment (“powered by USA Today”). Depending on the status level, a customer could receive access to ebooks, more magazines and games.

USA Today said its research shows travelers want “trusted local insights across multiple sources.” Also, 70% of U.S. travelers “expect and look forward to receiving the national newspaper” at a hotel. A free USA Today has been a constant for years at multiple hotel brands.

Paul Brown, president, brands & commercial services at Hilton Worldwide, stated that customers expect the company to stay “current with emerging trends and technologies.”

Imagine the ability to alter the advertising messages at an individual level, if the data from that customers hotel stays are taken into account. Real time messaging through the digital medium. Personalized by language.  Local information can be prioritized and extended to the mobile screen whilst the visitor is walking around or planning his trip.  Discounts coupons and more could be included, customized to the user.  Who knows more about the user in this circumstance than the actual hotel?

Hotel chain Four Seasons Hotels and Resorts is positioning itself as an expert on luxury wedding planning with a new tablet magazine application and dedicated social media handles.

The hotel brand established a magazine that is available to brides on-the-go via a tablet app, a blog and a glossy magazine distributed at Four Seasons properties. There are now wedding-only Twitter and Pinterest accounts dedicated to sharing expert tips from the hotel’s staff and stories from real Four Seasons brides.

Every year, there are more than 4,500 weddings across the 86 Four Seasons properties

Magazine, social, mobile, desktop –and in room screens, the potential for data capture and optimization is huge. Since planning weddings typically takes a long time, brands like Tiffany and Cartier that are already advertising here can continue the conversation with the customer long after the customer has left the hotel. 

In addition, this allows people who are not yet customers of the hotel to engage with Four Seasons from a distance, and the hotel can possibly generate more revenue from that customer compared to one who stays just for leisure for 2 or 3 nights

SPONSORED CONTENT AND CONNECTIVITY

Hundreds of hours of television shows and movies can now be streamed online through the web based player OSN Play.  Initially available on computers, viewers will then be able to use tablets, smart tv’s, phones and Xbox and Playstation later in the year.

This is very interesting in terms of a sponsored content and connectivity model

Currently the consumer Pays for the device (the tablet) and pays for content (OSN subscription) and pays for connectivity (Etisalat). Why pay so much?  As a consumer I want to be paying one price to my telco, hopefully a subsidized one, which is supported by ads, and getting multiple types of content.  Is OSN partnering with telco’s to offer their content through the telco infrastructure?

 It is in the interest of the operator to uncover revenues beyond the price of the data volumes, as these will soon be commoditized, and there will not be much profit in them in the mid- to long- term (same as what has happened with voice revenues)

Clearly we need advertisers to come in and support this type of model and make it cheaper and easier for the consumer.  That may materialize in terms of advertisers paying to the telco for the right to have ads appear against content such as OSN play, or advertisers paying OSN directly – which is probably more understandable, and have OSN share revenues with the telco.

Since the telco already has so much data about consumption and user preferences across a triple play model (phone, web and tv subscription) – surely this will be more than attractive to advertisers.  It also can be useful in terms of personalization for both advertisers and content producers.

Let’s assume a segment of individuals live in Dubai, roam in China and watch content on the operator’s OTT platform. If Etihad introduces a new route to Beijing wouldn’t they be interested in reaching the above highly targeted segment at a premium across mobile / Display / tv advertising? 

It should be possible to get personalized content across the different devices here and subsequently  advertisers be able to personalize the ads.

Google has changed the roles of a traditional content provider.

Google has already laid 100 miles of fiber optic cable in Kansas, in a bid to bring superfast internet access to certain homes up to 100 times faster than a typical broadband connection.  They have been in discussions with Disney, Time Warner and Discovery Communications about offering their content via Google Fiber. Such moves fuel speculation that Google will become a content distributor. 

Analysts say that Google could use its raw data processing power to store TV programming, essentially creating a giant, searchable DVR in the cloud and distributing programming live or on demand to Android Smartphones, iPads and TVs.  It could also use the network to develop more targeted ways to sell and deliver TV advertising.

Could this also provide a basis for sponsored connectivity if ad supported? People would get access to the content essentially for free, or the superfast connection would be free, and you would pay per program?

NARRATIVES IN ACTION

Disney’s marketing campaign for the new Avengers film comprised an online game linked to the film, a monorail was covered in ads for the film, and the Disney XD cable network was running an updated Avengers cartoon program for teen boys.  More than 13 million people watched the movie trailer on Youtube.  Last week it added more than 65,000 likes on its Facebook page and is generating 17,000 tweets a day.

 Since 2010 Disney has been generating interest for The Avengers at the US version of Comic Con when the stars and the director appeared there. This year Disney gave away free screenings in 10 cities where the most Facebook users signalled they liked the Avengers – more than 1 million have done so.  The trailers have also broken records for downloads on iTunes.

Playdom (acquired by Disney in 2010) created its first social game for a Disney product.  Introduced on Facebook in March, Avengers Alliance has 640,000 daily users. 

Another $100 million is coming into Disney from partners hopping on the Avengers bandwagon from Hershey, Harley Davidson, hotelier Wyndham Worldwide and Honda

Compare all of that to my Dubai experience with Avengers by  5 Gum Arabia:

I was contacted by 5 Gum on twitter and invited to the pre screening at the Dubai mall.  After the movie, an usher was distributing gum packet at the door as we were leaving.

A few weeks earlier I had attended Comic Con here in Dubai. There were the Audi cars branded with Captain America, Thor, Ironman .  I saw no 5 Gum presence there.  Had they been there, this is their target audience, they could have distributed packs of gum.  Using AR, I would be able to see a trailer for the movie on the pack using my mobile.  At the end of the trailer it would direct me to somewhere online where I would be further engaged – either with the social game, or a 5 Gum dedicated area where i would be able to continue the story.  Based on my level of engagement, 5 Gum would then reward me with tickets for the full movie.

MULTI SCREEN TECH PARTNERS

With a tsunami roaring towards Sendai, Japan, HP’s Photon Engine software directs the response at a nearby command center.  Collecting data from traffic cameras, first responder vehicles, smartphones and satellites, the software displays information on a huge touchscreen.  It lets emergency personnel have full situational awareness.  Although this is a simulation, the Photon Engine capabilities have already been used. 

Its ability to take disparate forms of data – video streams, GPS co ordinates, 3D footage and more and instantly formatting them for screens of any size is amazingly flexible.  The data can come from iPads, traffic camers and the output can be displayed with cheap projectors or $100,000 screens appropriate for concert stages.  Fashion House Marchesa used the Photon Engine to demonstrate the Spring 2012 line at a store in Florida showing 3D images of models walking on a huge screen. 

The Marketing director credited the technology with doubling sales that weekend.  Its waiting for Windows 8 to come out later this year to prove what it can do in mobile

Intigral (Saudi Telecom) have an aggregated mobile content platform called Asrar just for women.  It gets feeds from Sayidaty, AnaZahra and all sorts of Arabic female content sites.  Many of these don’t have mobile enabled sites,  however the platform takes the feeds and optimizes them for mobile, enabling better advertising opportunities.  With your brand inserted in not just one piece of content, but in an environment where there is lots of similar content, the message might be re inforced with new formats, depending on the growth of the interface and UI. 

One could imagine an app for Asrar that would allow you to interact with products in shops and overlay the latest content that’s been written about the product on the various sites Asrar has aggregated. 

Rather than ask the customer to pro actively go into your branded social areas, thus taking away from the activity she’s doing at that particular moment, you push the social to them, in a relevant and customized manner, and in a way that fits in with the her original intent.

DESIGN FOR MOBILE EXPERIENCES NOT JUST MOBILE DEVICES

All Sony Xperia smartphones for the Middle East will be pre-loaded with the d1g.com mobile application, allowing users in the region to access, share and interact with d1g’s multimedia content database

When you open the www.d1g.com site, you see lots of Sky News Arabia advertisements everywhere.   So now we have Sony mobile users accessing d1g on their phones, clicking on Sky News Arabia and accessing their content.  We should think about what state of mind and what environment this user is in. We already know what device he is using!

Is the Sony user more likely to be interested in sports, action, politics? What parts of Sky News could be surfaced in order to make it more relevant to him? Need to capture data on when in the journey they are clicking. Multiple outcomes, perhaps the data will show that its worthwhile looking having Sky News Arabia app being preloaded onto mobiles.

After seeing a demo from Windows 8 at the Arabnet Conference – where a movie was started on the mobile, paused, and then picked up from the stopping point seamlessly on the tablet, I was inspired to think of possible user journeys. The stats from STC on mobile usage in Saudi supported emphasizing the mobile search aspect of the consumer journey to fit into the times in a user’s day when she’s on the go, or only able to use one hand. 

Imagine you have a brand of baby food:  shopper marketing would take care of her experience in store whilst she has her baby in one hand and her phone in the other.  She can interact with the product, scanning the shelf for a discount, or scanning the pack and getting relevant information, maybe she doesn’t have two hands to pick it up; she just scans it to see if it’s the right mix.

Later on, when she gets home, and her baby is fed, she can pick up the tablet with both hands and pick up the brand multimedia where she left off, the experience moves seamlessly onto the tablet and gives her an extended education video from the brand on baby nutrition

CONCLUSION

We need to think about constructing the brand experience in a totally different way.   Multiple screens means multiple partners – telco / tech vendor / content publisher and advertising need to work together. Today’s consumer is being asked to change her interaction with brands based around their strategy of how many paid, owned and earned properties they have.

What we should be doing is working out how the brand can create a relevant story for the user, give her an added extra for immersing herself in the story, and deliver personalized experiences based not just on the content environment, but on the device, time and location.

This is how you build brand equity across multiple screens.