Flip Media foresee the coming year's challenges in January 11 issue of Mediaweek.

In an article plublished in the January 11, 2009 issue of Mediaweek, Flip Media's CEO outlined his vision for the coming year, and the challenges the digital sector will face. Yousef outlined his optimism that a return by clients to accountable and measurable marketing will provide an enine for the growth of our industry. The full text of the article is detailed below:

The last decade or so has seen tremendous growth in digital in the Middle East. We’ve seen a shift from digital being a core business requirement, rather than a marketing requirement. Having a presence on the Internet is no longer an option—it’s a necessity; it’s non-negotiable.

Growth over the last two years has been fuelled in large part by the explosion in real estate, along with the automotive sector, FMCGs and travel—those are the big four, with real estate out front. Flip tripled its revenue in 2008, and a lot of that was on the back of property.

Needless to say, any slowdown in real estate in 2009 will affect us all—in fact, we’re already seeing this; it’s amazing how quickly this sector grew and then how quickly it just disappeared again. Certainly, the days of a developer spending millions just to warm the soil for a property launch are over—it’ll be more tactical, focused on providing better services, building better connections with customers.

While digital agencies will provide real estate companies with the means to achieve these things, we are under no illusions about the contribution the sector will make to our bottom line—revenues from real estate will be a fraction of what they were last year. This fact will force everyone—not only digital agencies—to work a little harder in 2009.

We are more optimistic about some of the other major sectors. The automotive industry, for instance—they’re going to have to work much harder to get customers, and the internet is a great medium for that. Already, 17 per cent of online spend in the region is from automotive, and we think we’ll see a lot more of that over the next year. It’ll be less about brand building and more about customer acquisition and retention.

Secondly, the travel and transportation sectors show promise. Hotels will have to work harder to drive sales and facilitate reservations. We think people like Emirates Airline will try to advertise themselves out of this recession, and online is an increasingly attractive option as budgets tighten. Further, with brands like Emirates, or Jumeirah - outfits with a global presence and a unique site for every market—content management will become an increasingly large part of our business as they reach out to global audiences and seek economies of scale.

Retail finance is another potential growth area for 2009—there are something like 60 banks in the UAE and only 1.5 bankable customers. We think they’ll use the web more and more, especially to drive mortgages, credit cards and automotive loans. In the FMCG sector, meanwhile, there’s plenty of room for growth—there are a few brands that get digital, and the rest don’t. I’m not sure we’ll see a dramatic change in this in the coming year, but there will be some improvement.

In terms of media, we expect social networking to not only grow in 2009, but to initiate major changes into the marketing industry. Regional brands have finally realized that they cannot be the next Facebook and are instead learning how to live alongside social media. They have also realized that there are no longer any excsues to ignore the fact that Internet has become the key battleground for customers' hearts and minds. The coming year will have to see improvements in how we meet the challenges and opportunities here.

In general, across the industry, we’ll all have to sharpen our pencils a little bit, get back to the fundamentals of doing business. I think in this regard agencies like Flip will find themselves at an advantage in this regard—even in the good years, digital has accounted for around 1 per cent of overall media spend, so there's massive room for growth in our industry. We’ve always felt like mice fighting over the scraps that fall off of the table. So we’ve always had to work with challenging budgets and learn to do "more with less."

Those of us in the digital industry will have to work harder in 2009 to communicate this, along with the ROI benefits we offer—one of the really great things about the internet is that it’s so measurable and so accountable, but we’re not doing enough to show people this.

Overall, we don’t foresee much growth in business this year. I do think that things will eventually balance out—that while we will lose some opportunities, we will gain new ones. As the market tightens, some of our competitors will lose interest and get out of the Internet game, or simply go out of business. I think a lot of ad agencies will fold their digital offerings into the larger agency — they’ll no longer be stand-alone brands.

I do, though, think online will come into its own in 2009. Print is in decline around the world, and a lot of media companies are recognizing that the Internet is one of the few areas that can help them pick up the slack in circulation and ad spend. From a client’s standpoint, online offers them a chance to improve on their functionality, their sales or recruitment channels, their ability to communicate directly with core consumers.

Maybe 2009 is the year that the geeks will finally inherit the earth..