Following the subsequent acquisition of Maktoob by Yahoo, Samih founded Jabbar Internet Group, an integrated group of online companies and websites. The group’s assets extend from e-commerce sites to online games, to advertising products & search services.
I caught up with Samih to find out a little more about the companies within the Jabbar Internet Group, and the future of digital marketing in the Middle East…
Can you tell us a little bit about Jabbar Internet Group?
Jabbar Internet Group was formed after the acquisition of Maktoob by Yahoo, one and a half years ago. Jabbar invests in leading internet businesses in the region, mainly in the consumer e-commerce field. Our companies include souq.com, which is the largest market place in the region and cashu.com, the leading alternative online payment solution. Our other companies also include Sukar.com and Cobone.com, the private shopping club and group buying services. Jabbar Internet Group also owns Ikoo.com, the leading online advertising network, Joob.com, the travel site and Tahadi.com, our games company.
How is online marketing developing in the Middle East and how are brands adapting to digital communications?
With the growth in social media internationally, and the demonstration of its power in the recent Arab Spring uprisings, many brand managers now realize the power of online media, and the strong ties and mobilization it is able to create. Since early 2010, many brand managers started to realize that the ability to engage in a discussion and a two-way communication with customers provided them with greater insight and allowed for deeper brand engagement that isn’t possible with traditional marketing methods.
With the growth of social media sites such as Facebook, Twitter and other social tools, that communication became more accessible and open, and this helped increase the profile of online as a marketing channel, and eventually increase the online spend in the region.
What would you say are the main barriers to digital marketing in MENA, and how can businesses overcome these hurdles?
While there are many infrastructure and economical barriers that limit the access to the internet for the greater part of the Arab region, the number of users online in the Arab countries exceeds the number of users who are actually reading a daily newspaper, while spend on advertising on daily newspapers is at least 20 times higher than online.
The main barriers to increasing the digital marketing spend are education and research. Educating about the advantages of digital marketing in (interactivity, measurability, efficiency, and growing reach) should be done at all levels, universities and professional. As well providing more research about digital spend, audience measurement, and the trends of digital content, consumers in the region will support the case for growing digital marketing budgets in all organizations that seek to reach and interact with wider base of clients.
What advice do you have for entrepreneurs and start-ups working in the digital industry in the Middle East?
There is a lot we learned during our ten year journey. Now is a better time for digital as penetration is higher and more investment is available compared to the time when we started. I advise entrepreneurs to take this as a long term business, build a sustainable revenue model, and build a strong team, brand and company culture. I advise them to focus on building their companies and not on how to exit the company and become rich, which will come as a reward when you have a solid business.
How easy is it to recruit digital talent in the region, and what steps can companies take to bridge the skills gap?
To be honest, it’s not easy and it’s one of the biggest challenges. I’m so proud that I see many people who used to work with me in Maktoob have now moved on and are either starting their own online businesses or are leading the digital projects in many good companies. Maktoob was truly a digital university in that sense and we are now trying to do the same with Jabbar, where we are training and supporting people to learn the e-commerce business.
I also urge companies to look worldwide and to hire the best skills that can train local teams. One specific target market I like to tap are the Arab Americans who work in Silicon Valley and who are looking to come back and benefit the region.
What can companies do to further foster innovation in digital?
They need to invest more in the digital field as this is the present and the future. They need to look at their investments as long-term and to build teams, skills and knowledge in that area and to let go of the resistance to the medium and the worry that it will hurt their non-digital business. Digital should become an integral part of their strategy, business and culture.
When conducting business in the Middle East, what local laws do you particularly need to take into account, and how does this vary across different countries?
For business in general, it really differs from one country to the other in the region and there is a big range starting from countries where it is so easy to setup and work and others that are much more difficult. Regulations and taxes also differ from one country to the other. When it comes to online business, some countries have some new laws and regulations for example regarding online publishing or payment etc. and others have no laws at all yet.
How big is the mobile marketing opportunity for brands operating in the Middle East?
Many of the Arab countries rank on the top list internationally when it comes to the percentage of mobile usage in relation to the population. No-one can deny how essential mobile has become in the lives of the majority in the Arab world. There is a huge untapped opportunity for marketing on the mobile. Customers have this attachment to their mobile devices that could result in very effective marketing campaigns if done with consideration to users’ privacy and preferences.
One great potential for mobile advertising is for local businesses, where many mobile devices today are location-aware, allowing companies to provide marketing messages that are not only tailored to the user, but also to the location they are in, resulting in more relevant and effective advertising results.
Ikoo is the leading ad network in MENA. What is the online advertising landscape like, and how does it vary across different countries in the region?
We are seeing growth in online advertising across the region. Countries that started earlier than others in online such as UAE and Saudi are still growing, but we are even seeing stronger growth from countries that just started with the online such as Egypt, Morocco, Lebanon, Jordan, and Qatar.
It is without a doubt that the region is witnessing a digital growth in all areas, whether advertising, content consumption (video, etc.) and buying services and goods online. Without a doubt, countries with better infrastructure and stronger economies are seeing higher growth, but as online usage increase in each country and the industry matures in it, greater growth is expected.
What do you consider to be the most important challenges or threats facing the ad networks sector in the Middle East, and why?
You cannot isolate ad networks from the advertising eco-system. The challenges are common with publishers, agencies, and other industry players. The challenges of education, content, and research are what all players in the market are facing, and are targeting in their strategies and plans.
Can you tell us a bit about Sukar.com? How popular are private sales and group-buying sites in this part of the world?
Very popular and growing very fast. Sukar.com is the first online private shopping club where we run events for members and in these events you can buy branded lifestyle and fashion products at discounts that can go up to 70% and more sometimes.
This model has been very successful for us and we are growing fast to keep up with the demand. Our other group-buying site is Cobone.com where we offer daily deals at discounted prices to our members mainly in the services areas. This is also growing very fast. We have seen international players enter the market, but we are still in the lead!
What’s the business model behind Tahadi, and more broadly, how can businesses use social games for marketing online?
Tahadi focuses on publishing successful MMO (Massive Multiplayer Online games) in Arabic. We haven’t yet entered into game development, but it’s something we will consider in the future. The priority now is to publish games and help create a games ecosystem in the region that could be huge. The business model is a free-to-play model but you pay to buy virtual items within the game.
As for social games this is a big opportunity for businesses to use to market online, as game players are highly engaged and spend hours playing. The options range from sponsored games to in-game advertising to in-game item marketing etc.
What are some of your favourite local digital campaigns in the Middle East at the moment?
We’re seeing more creative executions, and ones that leverage the power of the internet for communication and interaction, rather than just “broadcast”. I can recall some examples that were executed with Ikoo, but there are others that stand out that were executed elsewhere.
Procter & Gamble and General Motors are two companies that believe in the power of online, and have successfully executed campaigns and competitions for their brands recently on it. As well, there are pioneering advertisers that are running Ikoo’s Engagement and In-Text Advertising such as Fanta and L’Oreal. Again, there are many others that this space won’t be enough to list.
What emerging trends make you optimistic for digital marketing in the Middle East, and what’s next for the region?
The emergence of e-commerce in the region and growth of content are both key for the growth of online advertising. With e-commerce growth, new types of advertising that depend on the performance are growing, and are allowing local business to generate sales through the internet, which will result in their increasing investment on online marketing. Performance-related advertising accounts for more than half of online-spend in USA & Europe, and we expect it to grow in the region at a fast pace.
As for content, with the growth of social media, along with a number of initiatives and investment from Google, Yahoo!, MBC and many other local players in the market, we started to see initial results of growing user engagement, and longer times being spent online. This will increase the brand and engagement spending for many advertisers, as it allows for levels of interaction not possible before.