As advertising costs continue to rise, global digital ad spend will increase 8.4 per cent in 2024, and privacy regulations tighten, it’s becoming increasingly difficult for marketers to stand out and drive results. Oleg Egorov, CMO at Flowwow, offers valuable insights into the key challenges facing performance marketers in the MENA region.
1. Rising costs and increasing competition
The growing popularity of performance marketing channels like Google Ads and Facebook Ads has led to a significant increase in the cost of clicks and conversions. Retailers have faced a substantial rise in CPCs, with some experiencing increases of up to 40-50 per cent in the past five years. Additionally, the intense competition for audience attention on popular platforms can drive up costs.
To navigate these challenges, consider less saturated platforms like TikTok and Snapchat, which can be more cost-effective for reaching younger audiences. Here at Flowwow, we’re currently experimenting with Pinterest. We began testing paid advertising tools in the UAE in September. We’ve seen a significant increase in engagement rates (+220 per cent), clicks (40 times more clicks), saves (+76 per cent), and total audience (+187 per cent).
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2. Increased data privacy and analytics challenges
As privacy measures tighten and SKAdNetwork attribution becomes more prevalent, local advertisers have shifted their focus towards collecting first-party data and utilising contextual targeting. These strategies allow them to bypass privacy restrictions and gain valuable insights into their target audience. By actively collecting and analysing first-party data, advertisers can build lookalike segments and tailor their campaigns to reach the right audience. This data-driven approach is essential for navigating the evolving privacy landscape and achieving successful advertising outcomes in the MENA market.
Automated ML strategies are also gaining prominence in the advertising landscape. Advertisers are prioritising creative content over audience segment settings to capture attention and drive engagement.
Moreover, there’s a growing emphasis on accurate targeting without relying on personal data. Search targeting and contextual targeting based on webpage content are becoming more relevant.
3. Fraud fighting
Fraud is a significant challenge in performance marketing, increasing customer acquisition costs and misleading advertisers. In the UAE, 42 per cent of companies reported a rise in fraud. This includes financial losses, labour costs, and other associated expenses. According to a report by Appsflyer, mobile fraud has surged to $5.4 billion by early 2023.
One common type of fraud involves emulating device identifiers and generating fake clicks. This can be identified by unusual spikes in clicks and impressions without corresponding app installations.
To combat fraud, advertisers should implement robust protective measures, utilise third-party analytics tools, and partner with reliable MMPs. By taking a proactive approach, businesses can minimise the impact of fraud on their campaigns and ensure accurate performance measurement.
4. The narrow segmentation issue
Understanding your target audience remains crucial. Moreover, many marketers struggle with audience segmentation, often overlooking valuable first-party data sources. This missed opportunity hinders personalisation efforts and can lead to ineffective campaigns. Of the 30,000 new products launched in the US every year, 85 per cent of them fail because of poor market segmentation.
Remember the Tropicana case? Despite generating over $700 million annually with its old packaging, a poorly executed redesign led to a 20 per cent drop in sales within just two months. This was due to the incorrect assumption that a consumer segment would be receptive to change without the benefit of in-depth consumer research.
In the MENA region, where consumer purchasing power and behaviour vary significantly, a more effective strategy is to target a wider audience and then refine approach based on creative performance and user data. By utilising broad targeting options and offering culturally relevant content and promotions, we can effectively reach audiences in this market.
5. Balancing short-term goals with long-term branding
Performance marketing often prioritises immediate conversions, which can sometimes hinder long-term brand building and customer loyalty. However, the MENA region’s high social media engagement presents opportunities for branded content to effectively complement short-term goals. Invest in performance campaigns to drive immediate results, and remember about brand-building activities. Storytelling and influencer collaborations can create a deeper emotional connection with your audience and help maintain long-term brand interest within the performance marketing framework. Invest in creative solutions that differentiate your brand and capture attention.
To determine the optimal balance between performance and branding, assess your unit economics. Identify key metrics that are crucial for your business’s success and set benchmarks for these metrics.
Emirates’ viral ad campaign with the Expo 2020 Dubai A380 is a prime example of effective brand-building through a creative campaign. For this ad, the stuntwoman was standing at the pinnacle of the Burj Khalifa with a message to visit the world’s greatest show, Expo 2020 Dubai, on the Emirates A380. It successfully captured global attention and demonstrated Emirates’ commitment to creativity and providing unforgettable experiences for its customers.
By prioritising creativity, data-driven strategies, and a balanced approach to short-term goals and long-term brand building, marketers can navigate the performance marketing pitfalls.
By Oleg Egorov, CMO at Flowwow.
