Nielsen Online's web gauge could unleash ad spending


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Regional marketers will soon have another tool to measure the effectiveness of their online advertising campaigns when Nielsen Online offers a website to track web usage in the Middle East. Online advertising in the region accounts for an estimated 4 per cent of global advertising spending, but industry experts say it is increasing rapidly and may triple by 2014.

Limited access to affordable high-speed internet for residents of the region has been cited as a major factor limiting online advertising - if the market is small, the quantity of advertising will be small. But marketers also do not have the detailed analysis of online activity that they need to shape their campaigns. While services such as Google, Effective Measure and Quantcast provide analytical data, Nielsen Online is preparing a suite of internet marketing offerings in the Middle East that should help push more of the region's advertising spending to the web, said Diego Semprun de Castellane, the managing director of emerging markets for Nielsen Online.

One of those tools is Nielsen Online's "Market Intelligence" service, a browser-based audience measurement tool that provides robust analysis of a website's users, performance and other critical data. The tool has been available in the US and Europe for a number of years and is considered to be one of the leading online analytical services. "It's a lot like people meters for television but for online," Mr de Castellane said. "It's extremely complex, sophisticated and expensive, so we need to build the business capacity to support that ? We are able to provide a broader understanding of the market and provide metrics of things that aren't that easy to measure."

Internet usage has steadily increased in the MENA region, with 35.7 million unique browsers being tracked in March, up from 28.4 million in February, figures from Nielsen Online show. The number of unique browsers should not be taken as an accurate measure of the region's total online population, as one person can access the web through multiple browsers across a range of computers and mobile devices.

"The increasing usage of technology, bandwidth, content and social media has already changed a lot of things," Mr de Castellane said. "It's giving users in the region a broader way to communicate internationally." Mr de Castellane says additional services from Nielsen Online and its competitors are crucial to improving the size of the regional online advertising market."It is part of a system of things that need to happen," Mr de Castellane said.

It is estimated that US$96 million (Dh352.8m) was spent on online advertising in the region last year, compared with $60m in 2008. "While we think these tools are a way to improve the transparency of the market," he said, "there is also the need to have an industry association that brings all the players in the regional online space to discuss ways on improving the sector." dgeorgecosh@thenational.ae

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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