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 Some famously bad predictions:
“Stocks have reached what looks like a permanently high plateau.” – Irving Fisher, economics professor at Yale University, 1929
“I think there is a world market for maybe five computers.” – Thomas Watson, chairman of IBM, 1943
“Who the hell wants to hear actors talk?” – HM Warner, Warner Brothers, 1927
Oh, and how we laugh now, we of unlimited knowledge and perfect vision. That is, perfect hindsight vision. Your correspondent defies the vast majority of people to point to a definitive moment when they picked that one key, killer trend as the wave of the future.
Let’s face it: as a species, we can be spectacularly crap at predicting the future. And yet, we keep on doing it.
In the regional media industry, the laughable-prediction-of-choice has been online advertising, and its supposed take-off “definitely this year”. Anyone trotting this one out – and there’s always at least one – has been fabulously wrong every year for the last decade (before which, of course, we all used smoke signals and fax machines and the like to exchange useless knowledge).
This being the case, it’s perhaps not surprising that over the last couple of years, regional pundits have become somewhat more circumspect about predicting the unstoppable rise of the Middle East online ad market – which is frankly a bummer for us, as it doesn’t make for exciting headlines.
But if there’s one person who could reasonably predict a bumper year for online, it’s the vice president and managing director of Yahoo! Middle East: Ahmed Nassef.
“I do feel we’re seeing a serious change. It’s difficult; every year we go around saying ‘this year HAS to be the year’, right? But 30% growth as an industry is good, especially when you look at what happened with the rest of the advertising industry – that’s a big sign,” says Nassef.
See? Even he’s being slightly cautious, despite being at the helm of one of the very few major online success stories from the Middle East. Yahoo’s acquisition of Maktoob’s portal business (and associated bits and bobs) took a company enjoying 60% year-on-year growth and added the endorsement one of the best-established – if, currently, somewhat tarnished – online brands in the world.
Which is nice.
Nassef is now at the helm of Yahoo’s regional operations, covering both responsibility for the US company’s regional portal, and the local Maktoob.com business. With a combined total count of 40 million unique users, Yahoo!/Maktoob is a very serious regional player, and is now working to beef up its offerings even further, with the Arabisation of Yahoo! and the continuing development of Maktoob.com.
So, granted, Nassef is in the best-case-scenario situation. But he has good reasons behind hoping for a good 2010 for online.
“From the reaction we’ve seen from the industry to this announcement over the past few months, I think it’s very encouraging. I think we’re seeing a substantial change happening, in terms of adopting online as a serious medium. At the advertising agency level, there’s a change. We’re getting meetings today that we wouldn’t come close to getting two years ago,” he says.
“The interest now has gone from not just the online guys, but now we’re getting interest from the heads of the agencies. And it’s the same on the client side, it’s gone up to the media director, the marketing director,” adds Nassef.
“The numbers are there, the audience is there, the tools are there, and the advertisers need something that’s more measurable, more efficient, more effective – I just don’t see any reason for it not to happen. The signs are very positive.”
Of course, online advertising is not so much an idea whose time has come, as an idea whose time came a couple of years ago (at least), and has been resolutely ignored.
“The users are way ahead of the publishers and advertisers. There’s 50 million internet users in the Arab world, and when you compare that with the kind of products and services that’s there, the kind of content – there’s a big disconnect between the quality that’s being offered for the region and the need, the obvious need,” says Nassef.
“So many new users are coming online – we’re looking at another 50 million to 60 million users in the next two or three years. It’s not a problem of, like, the users aren’t there.”
Which makes it something of a puzzle why otherwise astute business people (well, some of them must be...) just ignored a potentially-profitable market. Nassef suggests that it may be a case not of the industry ignoring online, but of being somewhat over-cautious, after previous bad experiences.
“I think a big part of what happened was, early on there were some really good initiatives. There was some money pumped into these initiatives early on – probably a bit too early. And, it just didn’t happen, in terms of industry acceptance, in terms of users themselves, back in 2000, 2001. There weren’t many people online back then, probably a million, 2 million users,” he explains.
“Back then, also, the advertisers that did try online – because there were no users, and because the local publishers were promising the world, and couldn’t deliver – had some bad experiences that got people worried.
“I think from that experience, from an investor standpoint, people became much more cautious about supporting these initiatives, so that was a problem. It was very difficult for Maktoob too, it took a lot of patience – these were very tough times to hold on until we finally found some support in the industry,” Nassef adds.
For Maktoob, at least, holding on paid off. Now the challenge for the company is making the most of the boost it’s earned thanks to its acquisition by Yahoo!, and putting in the slightly painful-sounding amount of work that lies ahead.
For Yahoo/Maktoob, the immediate future seems reasonably assured; and as for the rest of the industry, we’re happy to go along with Nassef’s cautiously-optimistic outlook: “I don’t know if 2010 is going to be that tipping-point year, where we go at 100% as an industry – I think it could be, there’s no reason for it not to be.”
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