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A

Syed Irfan Ahmad
  
 Ph.D,  Boston University;

iahmad@yahoo-inc.com

Director

Yahoo! Middle East

 

Previously:

 

Director, PACE (Pvt.) Ltd.   
(an international marketing company representing TIME magazine.)

 

member of the Prime Minister’s Task Force on Exports,
and State Bank’s Mark-up Committee.

 

Consultant for:
the Export Promotion Bureau

the United States Agency for International Development (USAID),
UK's Developing Countries Trade Agency (DeCTA)

 


 


Marketing, Advertising and Media News from Dubai, UAE and the Middle East

http://www.strategiy.com/interview.asp?id=20050918071650

 

 

Sunday, September 18, 2005

Interview with Dr. S. Irfan Ahmad
Director Yahoo! Middle East
 

With over 25 years of marketing and advertising sales experience spanning publications such as TIME, The Wall Street Journal, The Economist and Nihon Keizai Shimbun. He has organized participation of groups in international trade fairs such as CeBIT, COMDEX, GITEX, etc. He was also the organizer of the Pakistan Naval Defence Show in 1999.

Dr. Irfan Ahmad ventured into the online world in 1998 by launching the advertising sales representative office of Yahoo! for the Middle East, Central Asia and South Asia region.
 

Q. As one of the early movers on the Internet, how would you rate the progress of Yahoo! in the Middle East so far?

A. In terms of traffic, Yahoo! has more users than all other regional websites combined – Yahoo! has 13 million unique users. In terms of page views, more pages of Yahoo! are seen in a month than the combined pages of ALL Middle East websites seen in a year – more than 2.2 billion pages of Yahoo! are seen every month from the MENA region. How would I rate that growth – nothing short of fantastic!

Q. Why doesn’t Yahoo! have a Middle East edition, considering it has more than 10 million users in the region? Especially since arch-rival MSN has MSN Arabia?

A. Short answer: $$. The current online ad spend in the region does not justify setting up a separate Middle East section. We already have more page views and more users than everyone else. If the advertising industry in the region begins to allocate even 1% of its budget to online advertising we will be looking seriously at a local edition.

Q. Yahoo’s primary source of revenue in this region is online advertising. Can you tell us how big the online advertising market is in the Middle East? What is Yahoo’s market share?

A. My estimate of the 2004 online ad spend is about $5 million. Yahoo!’s share is about 25% of this.

Q. Do you think the revenue you generate in this region is good enough considering you have more than 10 million users?

A. “Good enough” is a relative term and after six years of selling online advertising in the region I feel that it is definitely not good enough! But I would be contented with a smaller share of a larger pie. It is the pie that isn’t good enough.

Q. Why is online advertising still small compared to conventional advertising such as print and outdoor?

A. Globally, online advertising remains small compared to print and outdoors but the trend is changing and online is displacing outdoors and magazines in the United States and Europe. It will take a few years and we will see the change here too.

Q. How do you see it shaping up over the next 2 to 5 years? Will it stagnate at these percentages for some years to come? Or will advertisers recognize the potential of this medium giving it a boost?

A. You pick up any newspaper in Dubai and see the double page spreads that appear every day – if only one of these advertisers started allocating the equivalent of one day’s newspaper advertising budget every month to online we would see a phenomenal growth in online advertising in the region. The change could happen tomorrow. But one has to be realistic, advertisers and agencies will take time to understand the medium. Currently we have more than 1.2 million Yahoo! users in the UAE. Take the combined audience of Gulf News and Khaleej Times – it is a fraction of Yahoo!’s UAE audience, but newspaper advertising in the UAE accounts for 40% of the total ad budget and online advertising is less than 0.5%.

Agencies and advertisers will recognize the potential of the internet and will allocate a bigger share to online – when? I hope next year or maybe in 2007!

Q. There seems to be a general reluctance among brand owners in this region to advertise online? Why is that?

A. Every new medium poses a challenge to advertisers and agencies. Pixels and kilobytes are a new language. A new newspaper can come up and brand managers and agencies will support it because of familiarity with the medium – 27cm X 4 cols for a quarter page ad is easier to understand than a 30KB SWF file. But having said this, both brand managers and agencies are now seriously looking at the internet and the younger generation of media managers and marketing managers are beginning to explore the online medium.

Q. Some observers say conventional media keeps getting a lion’s share not because the brand owner is not interested but because the ad agency does not push the media well. Your comments...

A. Commissions and negotiated rates exist in every medium. It is the hassle of managing a new set of creatives for the online medium which is more of a deterrent than anything else. And of course, since the volume of online advertising is so small, it is not worth the trouble so it is left out of the media mix.

Some agencies are now pushing their online job to “web design” houses which have very little media planning experience. Not knowing the strategy or depth of a client’s budget, they settle for scraps and try to maximize their own commissions rather than the client’s reach. While the agency is busy spending $100,000 on a one day newspaper campaign, the web design company allocates a hefty $3,000 for a one month online campaign – and haggles about discounts!

But the trend is changing and most of the larger agencies are beginning to hire in-house online media planners and web designers.

Q. Yet, there still seems to be a general reluctance among brand owners themselves in this region to advertise online? Why is that?

A. A brand manager trusts his agency to come up with a media plan. If he suggests online advertising, the agency can easily shrug off the matter by saying that the internet is still a fringe medium and they should look at it after a year.

Q. Is Yahoo! doing anything to help media professionals at ad agencies understand the medium better?

A. I spend more of my time educating than selling. Since 1998 I have been doing the rounds of agencies and advertisers in the Middle East. I have even given presentations at various universities and colleges –to catch them young. I have made some converts but the there’s a lot more proselytizing that needs to be done.

You can write to Dr. S. Irfan Ahmad at iahmad@yahoo-inc.com

 

 

 

 

 

 

 

 

 

 

 

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