Photo - Retro Traveler
So back to digital media in Dubai, UAE and across the region. My Mum always told me never to ask someone about their religion, their politics or how much they earned. Not sure how much of that stuck. I find no one ever asks about people's numbers and spend a life guessing. When asking in Dubai what the size of the digital media market in the GCC was, the view ranged from US$25 million to US$50 million for 2009 and closer to $US70 million for 2009. Interestingly when you hear the agency billing numbers and main publisher numbers I'm inclined to think the latter is more accurate. It may be an idea to ask people though - I find they do tend to tell you.
The big eye opener was the yields and sell throughs. Many publishers were saying average yields of between US$30-US$40 CPM weren't uncommon and 90%+ sell through was regularly being achieved!! Figures to dream of. This seems to be in part to the lack of direct response money that is being placed.
The age old question of how do you set your pricing? In the world of direct response - it's what ever someone is willing to pay to achieve the objective they have set - cost per .... you decide. The market is forced to price round the business model. There must be a balnce between how robust is the business model vs is the publisher over priced. I remember back in 2000 the agency had a client called petspyjamas.com, who always needed to push prices down and found that their media wasn't really working. Business model or publisher.
Famously Google took this all the way, letting the market price its media. Conversley, take magazines. You buy into the brand, the audience, the environment. People aren't maent to physically interact. So yields stay high. As a market it appears (and please correct me if I have got this wrong) - the % of "brand" money or non response money in the GCC is still relatively high (well over 50%). This is probably closer to 10% in the UK. Result is yields stay high in the high non response markets.
Google are growing like mad, the performance networks are entering the market and perhaps the cat will be out of the bag soon. The medium is only thought to be 2% of total media spend and perhaps the right pricing will mean a growth in online spend up to the15%+ seen across Europe and the US. The worry is, this is money straight to search and the reduction in yields will kill any category growth for the publishers.