UAE to witness double-digit growth in direct marketing
The UAE’s booming economy has triggered the rapid growth of the advertising sector, with broadcasting, print, outdoor and cinema adverts all trying to grab the consumer’s attention.
Now a new medium is emerging – one that is less expensive and more focused than conventional channels. Direct marketing (DM) – where the advertising message is sent straight to prospective customers through mailshots, e-mail, SMS and other means – is expected to see double-digit growth in the UAE in the next few years. Ahmad Tahlak, CEO of Emirates Marketing and Promotions (EMP), a subsidiary of Emirates Post, explains what DM has to offer.
EMP has commissioned independent research into the advertising market. How does DM perform when compared with other forms of advertising such as media and outdoor?
What are the particular benefits of DM?
Direct mail and new channels such as SMS, e-mail and one-to-one phone marketing are being used more frequently and offer better value for money than other methods. DM is more meaningful and saves money and time on promotions. Its ability to create value is what makes it different.
Can you give any examples that prove this point?
In the US, the Direct Marketing Association found that each dollar spent on DM generated a return of $11.65 (Dh42.75), compared with a $5.29 return from every dollar spent on other forms of marketing. This clearly demonstrates DM’s return on investment is twice that of other methods. DM generates 10.3 per cent of the US’s gross domestic product and this shows the size and value of its contribution to development.
What is the situation in the UAE?
There are no reliable sources of information on the size or performance of the different DM channels here. But this form of marketing is currently in the development phase, and the market is expected to see double-digit growth over the next couple of years.
Who are the major players in the UAE?
One of EMP’s key focuses is to promote and strengthen DM and direct advertising in the UAE, and also the GCC.
What is EMP’s view of digital advertising, which has been growing but still represents a small part of the advertising sector?
Etisalat has one of the largest penetrations of e-mail account subscribers in the world, which does not indicate that the contribution of digital media is small. The number of mobile phone users, market size and penetration are ranked as among the highest in the world. This means SMS, which is a digital medium, has one of the highest penetrations here. The use of the digital media in EMP’s portfolio rose by the largest amount yet in 2006 and 2007. We believe this segment will continue to rise in the years to come.
What makes DM stand out?
It is more than just a marketing channel – it is a business process and an integrated strategy that deals with customers directly. This is the biggest and single most powerful element, that differentiates it from other methods. We are talking to customers on a one-to-one basis.
How does DM personalise the communication process compared with other types of advertising?
It enables businesses to build mature connections with customers, one at a time, by recognising their individuality and communicating relevant information in a responsible way. In this way it achieves results for both parties involved in the process – the advertiser and the consumer.
Print and broadcasting media have been in the spotlight due to the implementation of auditing to measure their performance. So TV advertising cannot be dismissed.
We are not questioning the power, penetration and reach of other advertising methods. Traditionally, TV has been well-established and powerful. But each channel has its strengths and shortcomings.
So who decides which method is most effective?
Customers decide which medium attracts their attention. But remember – the customer pays for the cost of advertising.
What are the main factors contributing to the growth in
Read More