Thumbs Up To Digital & MENA, Say Media Investors

There is much working for media in the Middle East and North Africa (MENA) region if investors and leading media players are to be believed. Some of the experts see two factors as MENA’s biggest strengths –– its young audience and the speed at which it has embraced digital.

Turi Munthe, North Base Media
Turi Munthe, North Base Media

Turi Munthe, Venture Partner at North Base Media captured the scenario well when he said, “The amount of money going in media is the same but it is being reallocated. There is a general shift in markets with in regions such as Sub Saharan Africa markets, where younger audiences are playing a key role in taking markets online. The old media does not work for this generation. Rebalancing of ad budgets is taking place with the increasing mobile and internet penetration.”

North Base Media is an active investor in media technology and digital media companies in growth markets.

Erik Saelens, Younnic
Erik Saelens, Younnic

For Erik Saelens, Founding & Investing Partner of Younnic, the “question” of digital is becoming moot in many ways. “Everything either already is, or will be, digital. Social media is nothing more than the digital version of the former way of communicating and networking. In the case of MENA, the fact that the market is expected to grow four times in the next few years makes it extremely attractive. There is merit in increased spend on something that makes people’s lives easier because that has the potential to grow,” he said.

The region is creating success stories by focusing on these points. One of the media players that has not only understood the dynamics of the market but has also been successful in monetizing its endeavors is MBC. “Demography proves us right. Over 65 percent population here is under the age of 25. Arabic content is resonating with this audience, and there is space for more. It will continue to play a critical role in the region’s future. In line with our focus on this, we are also spending in premium content that we believe has huge potential in the Middle East to grow,” remarked Mazen Hayek, Group Director, Commercial, PR & CSR, MBC Group.

Mazen Hayek, MBC Group
Mazen Hayek, MBC Group

The Digital Pennies
MENA is facing its version of the broadcast dollars and digital pennies. In the current scenario, advertising spend in digital is estimated to be around 500 million USD. It is also calculated that around half of these are taken by the established international players in digital, leaving a very small number for the other players to monetize or grow.

“There is far too little money going in digital, but it is going to explode. We are seeing massive acceleration and many new things that will lead to that growth. The challenge is not as much about growth as it would be about building authentic brands, across multiple markets, without destroying the brand,” Mr Munthe pointed out.

The fragmentation in the market with its rich culture and diversified dialects would be an area of strength than weakness. Investing in the region would be not as much a concern for some of the media investors as making profitable investments would be. To address the information fatigue syndrome and ensure monetization, companies would have to focus on increasing advertising effectiveness.

For the experts, who were speaking at the Step Conference 2016 in Dubai, the key trends for the region was better online content quality and not losing sight of the Arabic speaking audiences especially in markets like the KSA. Keeping an eye out for the pickup in online commerce was another area of significance.

Mr Saelens reflected that the disruption in media will come from outside media, much like it was seen in most other categories.

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