What's Making MENA Tick?

We take a look at some of the biggest ad tech trends shaping the landscape in the Middle East and North Africa.

With an ad tech industry worth $5.9bn (~£4.74bn) last year, and a forecasted growth of 6.2% in 2024, ultimately reaching $6.9bn (~£5.45bn), MENA’s ad tech industry is on the precipice of massive growth.

Stretching from the bustling streets of Cairo to the futuristic cityscapes of Dubai, MENA is not just mirroring global ad tech trends, but is actively reshaping them. We explore the unique mix of innovation, shifting consumer habits, and here-to-stay trends that are rewriting the rules of advertising in this vast region.

A Mobile-First Region 

It’s important to note that ‘mobile-first’ has been the dominant narrative when it comes to digital advertising in the MENA region, and this is not looking to be replaced anytime soon. Home to one of the most penetrated mobile markets in the world, MENA’s consumers overwhelmingly favour mobile apps as their preferred channel. 

Retail purchasing decisions are ruled by momentous increases in mobile usage in the region - this also extends to the use of social media. For example, shopping in the region is becoming more socially oriented, mirroring the rise of social commerce observed in China and several Southeast Asian nations. This significant change in shopping behaviour and spending patterns is identified as the primary factor fueling the expected increase in social media expenditure by retail chains and corporations, currently estimated to be around $3bn (~£2.3bn). 

The synergy between social media and mobile usage is playing a pivotal role in shaping advertising technology strategies in MENA - multiple countries in the region rank above the global average in terms of the percentage of the population using social networks. Globally, the wider Middle East and North Africa region is ranked second for time spent on social and messaging. Insider Intelligence found that in H1 2022, internet users in the region spent an average of 3 hours and 5 minutes per day using these services, with only the Latin America region exceeding this. This makes social media a critical arena for advertisers to engage with their audience, and moreover, understanding user behaviour patterns on social media in MENA also remains crucial. Considering the extent of adoption, it's expected that a significant portion of the region's online advertising budget is allocated to social networks. The annual online advertising expenditure in the MENA region currently stands at a staggering $5.5bn (~£4.4bn), and accounts for around 47% of total spend, and projections suggest this figure will increase to $7.9bn (~£6.29bn) by next year. 

It’s All About Out-of-Home

MENA is a region that is constantly pushing for technological innovation, from Saudi’s futuristic NEOM to Dubai’s City of Innovation, and this appears to be spilling into the digital advertising realm in the form of DOOH. This growth is also driven by several key elements, including government-led initiatives to foster technological innovation, a heightened focus on inventive advertising strategies, and an increasing trend towards utilising programmatic methods in out-of-home marketing activities. These efforts are buoyed by the integration of digital technology and strategic placements in high-traffic areas. For instance, Dubai's use of digital billboards along Sheikh Zayed Road showcases high-definition advertising, targeting the city's affluent and mobile population. In Cairo, the introduction of LED screens across major squares has revolutionised OOH by offering dynamic content that captures the attention of both pedestrians and drivers. In Saudi’s Capital, Riyadh, there are plans for extensive OOH advertising to achieve Vision 2030 goals, tapping into a captive audience with long exposure times. These all underscore a trend where traditional billboards are being transformed into interactive experiences, leveraging the region's infrastructure developments and technological advancements to reach consumers in the public sphere more effectively.

In-Game Opportunities

In MENA, the gaming boom is well underway - it's projected that by 2025, gaming revenues will surpass the $5bn (~£3.97bn) mark, while the total gamer population in the region is anticipated to reach 85.7 million. The youth in MENA, with their fingers on the pulse of the latest tech, are leading the charge in gaming. In fact, the entire narrative of gaming in the MENA region is significantly shaped by its demographics. With a total population of approximately 400 million, nearly half of these individuals are under the age of 25. The younger demographic, having been raised in the digital era, are naturally inclined towards the latest developments in apps and gaming, particularly through mobile devices. 

Particularly noteworthy is the UAE, where gamers' spending per capita ranks among the highest globally, and Saudi Arabia, which recorded the largest video game consumption in the MENA region last year. There is a forecasted growth in gamers within the UAE, Saudi Arabia, and Egypt, reaching approximately 85.76 million within three years. This, of course, presents a prime opportunity to capitalise on the region's clear inclination towards gaming.

Understanding how to effectively plan media for in-game advertising is crucial, especially given its 'always on' nature. This channel is dynamic, unfolding live and in real-time, necessitating a deep comprehension of how gamers engage with content and what captivates them. Consequently, programmatic in-game advertising emerges as a potent strategy for advertisers to leverage in this fast-paced environment. 

Shaping the Future of Advertising in MENA

Mirroring trends in the rest of the world, data privacy concerns will undoubtedly shape the future of ad tech in MENA. With 71% of countries enacting data privacy laws, the digital advertising landscape is rapidly evolving. The phase-out of third-party cookies on Chrome in 2024, following Safari and Firefox's lead in 2020, is a key part of this shift as is the legal requirement for brands to have data privacy and governance measures in place to ensure they are capturing and storing their customers data with the proper levels of consent, using this data in a compliant manner while also giving consumers the right to request for their data to be destroyed.

These two separate yet connected forces has left brands, publishers and those operating in the ad tech and martech space no choice but to pivot towards growing their first-party data and pivot away from solutions that either rely on third-party data or not privacy compliant. As is the case across Europe and the US, in MENA retailers have started to capitalise on the rich consumer data they sit, realised the value here and are starting to develop advanced retail media capabilities. In an industry where operating margins can be wafer thin many are starting to see this as an asset they can monetise and use to bolster their primary business. 

This, coupled with MENA being one of the fastest growing digital ad markets in the world right now, means that these trends are likely to lead to an increase number of ad tech vendors viewing the region as a fantastic source of growth and will hopefully see more enter the MENA market, in particular those operating in the identity resolution, consent management and activation space. What they will all have to navigate, however, is laws like the Personal Data Protection Law in Saudi Arabia and the UAE, enforceable from September 2024 which may pose technical and legal challenges. This same scenario is creating a divide in the ad tech industry, with those capable of adapting to these changes likely to thrive, while those who do not face an uncertain future.

Kamal El Agha - IAB MENA Measurement Task Force / Havas Media MENA