Google recently commissioned research to understand the online presence and advertising behavior of privately-owned small companies (size of 250 employees or less) in the UAE, KSA and Egypt. The results showed Emirati, Saudi and Egyptian SMBs are missing the economic value of the web. More than two-thirds didn’t even consider having a website and the penetration of SMBs online remains very low. Only 18% of SMBs in the UAE are online, while small businesses in KSA and Egypt register at 15% and 7% respectively.
When compared to global markets, online presence amongst SMBs in the core MENA countries surveyed is far below markets such as France which has 60% penetration, the US at 40% and Turkey at 37%.
The research revealed that most SMBs do not find online advertising to be expensive nor complex; they simply don’t understand its benefits. A striking majority of respondents said they were unsure how being on the web can help them grow their business (92% in UAE, 90% in KSA and 80% in Egypt). In fact more SMBs in the UAE have a social networking page (15%) than a website (5%). Businesses in Egypt and Saudi Arabia said the main reason they have a website is to advertise their company (87%).
Two potential sectors expressed readiness to move online which are the travel and hospitality sectors in Egypt and KSA and the professional services in the UAE. Two-thirds of Emirati SMBs said they were ready to move their businesses online.
Tarek Abdalla, Head of Marketing at Google in MENA, commented on the study: “Small businesses in the region are missing a great economic opportunity by not embracing the web and reaching out to customers online. The internet and online advertising can provide small businesses with the same advantages that large companies have long had.”
By bringing small businesses online, the web opens these local business to global markets and customer opportunities. As more users are online, connected through smart phones and tablets, access to these customer opportunities is enormous. Users spend more time on the web than any other media including TV. SMBs with small marketing budgets can be more cost-efficient by using online advertising, yet the bulk of their ad spend remains on traditional media like print (SMB average online spend is below 5%). Those that do advertise online consider it to be cost-effective, easy and user friendly (62% in KSA and 61% in Egypt).
Online advertising is currently at 6% from the total advertising spend in MENA (Arab Media Outlook), while internet users in the region are expected to reach 141 million by end of 2013, representing more than 35% of the total population size. The Internet has made a significant economic impact globally, accounting for over 21% of GDP growth and contributing to over 4% of national GDPs in G-20 economies.