It’s no secret that as an industry we have major headwinds coming our way. The IMF is projecting a major cut in government spending, GDP growth projections for Gulf countries are being drastically slashed due to low oil prices, and businesses are looking to cut costs as consumer confidence and spending decreases. This is no different in the advertising market, which is expected to drop on average 8-10 per cent year-on-year for the next two years.
At the same time there has been a parallel phenomenon that has been happening for many years, and that is the convergence of technology with marketing. That convergence so far in the Middle East and North Africa has been limited to automation of a very small share of media and marketing processes to drive efficiency as well as reduce costs, with very little focus on insight and measurement. We have also witnessed a bigger obsession in collecting and hoarding data with or without a strategic output.
In MENA, we have seen that in times of crisis accountability grows exponentially. We saw it in 2008, a year that witnessed an acceleration in digital growth, and we are seeing it again now. What was a tactical approach in 2008 has taken centre stage today. The whole organisation is looking at digital as the way forward and upward. Globally, businesses have looked at data to unify responsibility across the organisation and derive value even at the most granular levels.
The marriage of data and technology provides a strategic advantage to businesses in a fast-paced economy. Generating and acting on insights at a strategic and granular level becomes essential.
However this data is not limited to consumer or transaction; every business unit within an organisation generates and has access to different sources. One of the key data sources, especially in the travel and e-commerce spheres, is operational data; this data could play a critical role in optimising consumer messaging as well as consumer experience, the bread and butter of some industries.
Operations data that historically sits in enterprise technology is not solely owned by any team within a client organisation. This means the decision making on tools and data collection is now owned by multiple parties within that organisation. The chief technology officer, chief information officer, chief financial officer and even the CEO will all have a role to play. Therefore the collection and utilisation of data is now a strategic choice that the whole company needs to align behind.
The biggest threat to such a practice is working in silos, and collecting data for the sake of data, with no real strategic outcome. The most important thing is that organisations need a unified set of key performance indicators across all functions, that each can build out their own key performance indicators from. That would increase cross-functional accountability and eliminate the silos.
This poses a lot of challenges to the marketing function. Being the largest generator and consumer of data in organisations, the CMO now needs to go beyond the marketing need for insights and data. Data empowers marketers to draw bold conclusions about the contribution of marketing or company growth, therefore moving marketing from a cost centre to a measured revenue-generating activity.
Marketing and tech functions now have to operate hand-in-hand, which is why we are seeing the emergence of a new breed of marketers: the chief marketing & technology officer (CMTO).
With that transformation happening on the marketing side, legacy CMO partners such as agencies and media partners can’t continue to operate the way they currently do. In fact, even an adjustment is no longer enough; this environment needs to be completely reimagined, and it’s already happening.
Across Europe, the Middle East and Africa, consulting firms who typically stayed away from media and marketing as disciplines are already either acquiring or developing talent in those fields. We are also witnessing a new breed of agencies built around data intelligence and analysis, with media buying and planning as secondary services; and creative agencies built on data-driven creative using first-party and third-party signals to solve for media and content messaging.
Even classical media agencies are making a ton of investment either in acquiring such boutique players or pouring investments into their data and analytics practices. It’s no longer possible for data analytics teams to be the forgotten departments that struggle to get resources within advertising or media agencies; these teams need to be now front and centre to achieve this transformation. The pitch is no longer to the CMO alone but to the CFO, CTO and even the CEO.
In MENA today, the uptake of technology platforms has been growing in the past few years. However, the current utilisation of data is below 10 per cent, compared with more than 50 per cent globally when it comes to audience buying. If the digital transformation tells us anything it is that this number will change rapidly, and that change will sweep away those who do not transform their business to meet the modern day marketing challenges.
How? you may ask. We will leave that to another day.
Rayan Karaky is head of media buying solutions at Google in MENA