MENA Online Advertising Industry

Google Confidential and Proprietary1

Abdulrahman TarabzouniRegional Manager, Emerging ArabiaGoogle

aitmit

MENA Online Advertising Industry

Google Confidential and Proprietary 12

Internet Industry

3

Infrastructure Content Commerce

3

Infrastructure Content Commerce

3

Infrastructure Content Commerce

337MPeople

5x

$8BAd Spend=

=

30%

Market: MENA Market Highlights5% of World PopulationYoung Population: 33% of them < 14 Years Old

2.5x Poland Ad Spend ($3B in 2009)GDP Real Growth at 6% vs. 3.1% Globally

R1

R3R2R4

22 Countries+33% below 14 yearsArabic in the top 10 languages in number of search queriesArabic is spoken by +80%Highest GDP per Capita $110k in Kuwait2nd Language is French in R4 vs. English in R3Over 60% of MENA users are Males

Insights:

GDP per CapitaPopulation

Excluding Yemen, Iran, Sudan and Syria

Advertising Expenditure

Over 70%

Over 8%

Over 9%

Top Countries

Egypt

Unknown

Morocco

Jordan

Saudi & UAE

Sources:: Ministries of Telecom, CIA Fact Book, AC Nielsen, Madar

5

Online Advertising in MENA

MENA Online Ad Spend in 2010 = 110m-130m USD

GulfNorth Africa

Saudi Arabia

Levant

Ad Market Size in $M

Internet Penetration

Google Confidential and Proprietary6

63MInternet Users > Population 75% PopulationInternet Users

287 (21%)

60 (73%)

63 (18%)MENA

90 (45%)

311

234

MENA

1,354

1,224

348MENA

3rdPopulation

6th# of Internet Users

Confidential & Proprietary Copyright © 2010 The Nielsen Company

Page 14

Saudi: Duration of usage (Minutes per day)

Internet TV Mobile Internet Mobile Phone Radio Magazines Newspapers

2526

3945

68

130133

• Over 2 hours spent daily on Internet on desktop / laptop and watching TV.• Those using internet on mobile spend almost an hour everyday.

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Use a Search Engine

Visit internet portals

Send or receive emails

Instant Messaging / Chatting

Visit / access social networking sites

Listen to music online

Download music, videos, etc

Watch videos / TV programs

Play games online

Access / Download / Upload video clips

Access / Download / Upload photos

Download applications /software / updates

Write / read blogs

Research an item you are thinking of buying

Click on an online ad banner / link

Use online banking / pay bills online

Set up your own website

Post online ratings / reviews of products / services

Complete Online Transactions / E-commerce 8

11

11

19

22

22

26

29

33

35

46

46

48

58

64

68

76

87

94

Very low

Low

Medium

High

Very High

97%

3%

Google Others

Online Activities and Search Share

Google Confidential and Proprietary

Search Trends

Queries in Arabic represents:

+54% of MENA queries

+80% of Saudi queries

Google Confidential and Proprietary 1111Google Confidential and Proprietary

Online Advertising: How do I stand out on the web?

Google Confidential and Proprietary 13

Google is in the “Connections Business”

Connect consumers to ALL the information

they care about

Connect marketers to ALL the customers

they care about

Google Confidential and Proprietary 14

Reach Customers- Advertise on the Google Network

network

Google Search:

The whole Google Network reaches around 86% of Global Internet users!

Search partners:

1

2

Display partners:

3

Google Confidential and Proprietary 15

Targeting options on the network

Search campaignreach Customers

searching on Google

Contextually targeted campaign

reach Customers surfing hundred of

thousands of 3rd party sites

Placement Targeted campaign

reach Customers surfing selected sites on Google’s Display

Network

Reach customers through various advertising touch points:

Search (97%+ reach in MENA) Display (80%+ reach in MENA)

Search campaignreach Customers

searching on Google’s

search partners

Google Confidential and Proprietary 19

Sponsored AdsCost Per Click (CPC)

On search

Natural Results(unpaid)

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On Display Network- Contextual targeting

20

Reaches millions of users as they read content online

Google scans a page, interprets its content and

serves relevant ads

Recipe for Roasted Garlic Pasta Sauce

Relevant ads Targeted in real-time

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Google’s Pricing Models

Content Targeting

• Cost per thousand impressions

• Only your Maximum bid is considered

• Access to Reach & Frequency reporting

• Content Network

CPM Model CPC Model

• Cost per click

• Maximum bid & CTR are considered

• Reach & Frequency reporting not available

• Search & Content Networks

5 Google Confidential

Google AdSense Enables You to Monetise Pages Across Your Entire Site … And Beyond

Search Pages Content Pages

Plus, more ways to monetise with other AdSense products

Expanding the AdSense Family

7 Google Confidential

Google AdSense for Search

7 Google Confidential

Google AdSense for Search

12 Google Confidential

AdSense technology maximises ad relevance and performance

• No manual intervention• AdSense automatically

understands the content of a specific page, and

• Dynamically targets ads as the content on the page changes

• Competitive hand-mapping solutions only target the static category level

Freshness and Relevancy are vital to page performance

13 Google Confidential

Linguistics Processing Delivers Superior Matching

Through linguistics processing, we know that this page is about coffee, not programming or a vacation spot

MENA AFC Partners

Confidential & Proprietary Copyright © 2010 The Nielsen Company

Page 56

Do they click on ads? (Saudi)

• Nearly half of those who recall seeing online ads on desktop / laptop click on them.

Always Sometimes

Click online ads on Desktop / Laptop

Total 15 - 24 Yrs 25 - 34 Yrs 35 - 44 Yrs 45 - 54 yrs Males Females

33%10%

37%19%18%18%19%

27%

34%

29%

29%28%34%31%

29%46%

24%44%41%38%39%

11%10%10%8%13%10%11%

Base: All recalling seeing an ad on Desktop / Laptop (789)

Question: Do you click on the ads you see while accessing the internet from a laptop / desktop?

Click online ads on mobile

Total 15 - 24 Yrs 25 - 34 Yrs 35 - 44 Yrs Males Females

36%10%20%18%18%18%

17%

28%24%21%28%24%

28%47%44%40%

40%42%

19%15%12%21%14%16%

Base: All recalling seeing an ad on mobile (287)Question: Do you click on the ads you see while accessing the internet from a mobile?

• Marginally lower resistance to clicking on ads seen on mobile!

Rarely

• Men more likely to click on online ads both on desktop / laptop as well as mobile.Never

Always Sometimes Rarely Never

Confidential & Proprietary Copyright © 2010 The Nielsen Company

Page 57

Saudi: Impact on purchase decision

Question: How often have your purchase decisions been influenced by any sort of online advertising?

• Over 40% people say online advertising does not impact their purchase decision.

Always Sometimes Occasionally

Total 15 - 24 Yrs 25 - 34 Yrs 35 - 44 Yrs 45 - 54 yrs Males Females0%0%0%0%0%0%0%

44%41%56%

42%41%42%42%

30%30%

23%

28%28%33%30%

22%26%19%

28%27%21%24%

4%3%2%2%4%4%4%

Never

Base: All internet users (1067)

• Online advertising at best impacts purchase decision only occasionally.

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The dominant online behaviour remains “ROPO”

4

% of tech product consumers who used online during the purchase process(average of TV, Audio, PC, Cameras categories)

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In this complex journey, search engines are the compass

6

Search engine(s)

Typed address(es) directly into browser

Followed links from other websites

Already had website(s) in favourites / bookmarked

Followed links from email received

0% 18% 35% 53% 70%

0.06

0.23

0.23

0.27

0.68

Found website by:

Q26 Which methods did you use to find the websites you visited during the research and purchase process? Base: All researching online, n=1,141

0%

23%

45%

68%

90%

2%5%6%6%15%

0.9

Other

Challenges

DSL and mobile Internet access remain expensive

Usage between an emerging and a developed market:

Smartphone usage rising but still low

Mostly tier-2 phones e.g. S60, BlackBerry

Many tier-3 (feature) phones (small screens, mainly phone / SMS)

High prices and lack of access to entry point to the web

27

Search queries

More than 50% annual growth in mobile

subscriptionsover the past 5 years

Lack of high quality content

5% users speak Arabic vs. 2% of the content online is in Arabic

Forums are very popular in the Middle East and North Africa(35% of content vs. 10% elsewhere), but :- unstructured ;- lack quality.

Challenge for a search engine to ensure- relevant- high quality- and freshresults to surface to the top spots.

28

Low credit card penetration ratesLack of online forms of paymentRequired infrastructure still

catching up

Addressing and postal systems still in development in some countries in the Middle East

Low credit card penetration (<5% outside of Gulf countries)

E-commerce & inter-country trade laws not yet ready

SMBs not online

29

! Security still a major issue e.g. North American airlines

review 3% of transactions vs. 80% by Middle Eastern

airlines

Google Confidential and Proprietary 12

Case Studies

Google Confidential and Proprietary 13

Test Objective

Quantify the impact of search advertising on Vodafone’s in-store sales

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Objective: create a measureable difference in Google AdWords spending between test and control regions and determine the impact on in-store sales.

1. Determine a baseline of sales activity in each test/control region before the experiment

2. Increase online advertising for defined product categories (handset/generic keywords) in test markets

3. Determine the difference in sales between test and control markets due to altered online spending

Test

Control

Test Design

Selected a representative set of 94 Vodafone stores from 5 test regions across the UK; matched control stores were taken from other parts of the country

Google Confidential and Proprietary 15

AdWords are a highly effective driver of in-store sales at Vodafone

“Vodafone’s additional investment in generic and upper funnel keywords was an effective way to drive incremental in-store sales. We now have a better understanding of the impact of online research on retail purchase behaviour and we’ll have to rethink the way our current attribution model works.” -Mike Durbridge, Head of Direct Sales, Vodafone UK

1Overall sales lift of 1.5% in test markets when compared to the control markets; additional lift of up to 10.5% in specific categories (e.g. Sim-only contracts)2 Positive 400% return on advertising investment (Vodafone received £4.26 in sales for every £1 spent on AdWords)3 27k new customers visit Vodafone stores as a result of increased online spend

4 1.75 in-store connections are driven by AdWords for every 1 online, showing AdWords has an even greater impact in-store

Vodafone up-weighted spend on handset and generic keywords and significantly increased in-store sales

Results

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1.Scale

Google Confidential and Proprietary37

Dawn of the world until 2003

5 exabytes of information

2 days

667 exabytes per day

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2.Reach

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3.Speed

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Spring Mid-Nov19 Dec31 Dec30 Dec7:30PM11:10PM11:50PM

11:55PM11:58PM

11:58PM

Scale 1,000,000 years into 1 year

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