Herve Cuviliez

I’ve been working in the online advertising business for the past 15 years. I have always considered that we all have a part of responsibility to help our market grow.

Today in the Middle East, online media investments represent less than 2% of the total media expenditure. That is abnormally low! Therefore, there must be a fight among all the actors in the digital industry to convince advertisers to invest significantly more online.

For this exact reason, I have extended my collaboration with the Webby Awards to become an UAE Webby Awards Ambassador.

This award is known to be “The most prestigious award in the world” by the BBC. Now that “The Webbys” are in the Middle East, we can say it is a first sign of the emergence of the Middle Eastern Digital scene.

It is now our chance to show the world that the Webbys’ presence in Dubai does actually make sense! So I strongly invite you to submit your blogs, startups and your digital creations to the Webbys. You can submit it here: Enter the Webbys

The more we will be active for these awards, the more they will take the region more seriously in the digital scene. Let’s win some Webbys people!!!!

In an international crisis like the one we actually living in, cards can be reshuffled in a snap.

Six months ago, Dubai had no competitor, everybody wanted to move there

When we took the decision to establish Kuv Capital head quarters in Beirut instead of Dubai, everybody explained us what enormous mistake we just made.

And when you look at the brutal facts, they were right.
In Lebanon:

• Broadband is expensive, slow and unreliable,
• Getting a stable electricity is a challenge
• Mobile plans are a ripp off
• Lebanon is unstable, etc..
• GDP is 4-6% at best

Where in Dubai:

• Broadband is fast and stable (but also really expensive and restricted)
• A double digit growth
• Freezone
• An international workforce

But our job is to anticipate trends, and we strongly believe that Beirut has a window to become a Digital Middle East Hub.

How I dare say that with that weak broadband infrastructure, unreliable power grid and Lebanon inability to reform itself?

Well, create a company is cheap and easy in lebanon (limited liability company starts at 3500 USD), so it is for office expenses, labor cost is for less expensive than in the GGC countries and last but not least there is great talents here.

All these are the necessary ingredients to create a startup and have a low burn rate. On the opposite, Dubai has been design to become the middle east headquarter for international groups, so offices are great but really expensive, so is the cost of living (talking about the expensive part), incorporation cost and minimum capital requested are too high, etc..
and this is not startup friendly.

So why Beirut is not considered? Because Beirut has a marketing/branding issue, nobody knows what is really happening here. I spent my last 8 months in Beirut and I can tell you a lot is happening here. I met amazing people and discovered great companies (see Rootspace for example).

How to solve that branding issue?

As a first step, we need to structure all initiatives as a real ecosystem by creating synergies, meeting, conferences, etc.. make it more readable for foreigners.

But to accelerate this change in perception, we need go a step further. we need an iconic project to create a international buzz.

So we decide on to work on a crazy project: Create a media city in Lebanon.

Here is the idea. Find old warehouses or factories, rehabilitate them in offices with decent broadband and electricity, free spaces for students who want to work on innovative projects, Showroom for high tech companies, etc..

No it’s not a only a dream. We have already spotted 3 places around Beirut, talked to investors, convince 6 digital related companies and a media group to move in, etc..

The Silicon Valley started like this 20 years ago by gathering one after the others in place around San Francisco, Why not us ?

We will air a blog soon to gather all the information and coordinate actions

If you think I’m crazy, please let me know,
if you want to help, please declare yourself,
if you just want to show your support, leave a comment
if you just want to get updates, drop me an email.

YouTube is real success, it’s worldwide used but since the beginning they are struggling at one thing: be able to monetize this huge audience. Everybody look at it like a unreachable gold mine.

They tried all good (not so apparently) old recipes. Ads in our videos, very badly welcomed. Brand Channels, nobody is giving a sh.. except for some major brands like Nike.

But today the spark might have come from Nintendo and their experience WII campaign.

Take a moment to enjoy it: http://www.youtube.com/experiencewii

If you can’t take 2 mins to enjoy it here is the story:
they have reproduce youtube video page in flash, and synchronize it with the video playing in. When Marion jumps to hardly for example, the page starts to break. Whose who didn’t find out, you can play with the broken pieces.

Brilliant, they deserve the buzz going around.

Who’s next ?

I just noticed this morning a local (middle east) ad on my facebook. I started chasing for some more. And here is my findings: Telecom, Banks, Online Service

I heard too many time that blogs and social networking are for kids not for real business, it’s good to see that’s things start to change.

So it might seems nothing but having some middle east advertisers considering facebook in their media plan is a great “moving in the right direction” sign for this region.

Note: Facebook is social network #1 in the middle east, 2nd is myspace

Some people have asked me if they need a domain name strategy, the answer is yes for this 4 reasons:

• Word of mouth is a strong source of traffic for websites but it’s also a source of
misspelling
• Every business becomes international, with this come the need to protect your
products names and brands in yours and future local markets
• Misstyping is a source of lost traffic
• To prevent cybersquatting (people that registers yours potential domain
names)

Domain names should be consider as an asset in a company but it’s to often undervalued by the management

Now, you know that the answer is yes, Where to start?

It’s quite simple

First thing, keep in mind that registering a domain cost only a dozen of dollars; so
don’t hesitate to cover all your needs.

Then, start to answer to each of the first 3 bullets point above. Remember that
generally, cybersquatters are more creative than us.

• What king of misspelling can be done with my brands and products? Commons are with or without “-“ for composed words, with or without silent vowel (try amazone.com) or an H in your name, etc…
• Try to forecast your international expansion and start to register all local domains you will need in the coming years (don’t forget to apply the misspelling check for each local market)
• With out being paranoiac, try to anticipate possible mistyping around your brands and register them (try amzzon.com or hervecuvilliez.com / hervecuvilier.com /hervecuvillier.com)

Once the list is done, select you registar and get your credit card ready.

Don’t forget to manage DNS on each domain.

Review it every year.

and one last tip, turn on the autorenew function, it will ease your life next year.

Most of startups are relying on online advertising with the very same principle: create a service, get a massive audience and try to monetize it.

Everything seems to be ok as long as online advertising is growing fast.
But the future of online adverising is elsewhere.

The online advertising 1.0 (today) is a copycat of the traditional advertising: Get me a massive audience, interupt what they are doing to expose my brand or at most click on my ads.
I’m talking about any kind of display advertising ( banners, over the page, etc..)

The online advertising 2.0 (what I’ve called Advertising on demand in a recent post) will be totally different by moving from a “look at my fantastic product” attitude to a “what can I do for you” one.
I mean by that propose to customers services they care about in your aera.
Nike made that move sometimes ago with product like Nike Ballers network, a facebook application where basketballers can: find a court, add your home court, find a game and schedule your own game and invite other players

Startups will have to review their copy if they want their share of the online advertising manna.

They will have to propose customizable version of their product in order to move their ad based business model to a b2b services businness model.
And from the success and the leadership will depend their revenues on the B2B side. Big brands don’t work will losers.

I had a discussion a couple of days ago with some internet marketers. I was really disappointed by their attitude regarding the mobile.

Of course, all of them will tell you that mobile is the future but in fact, they complain about the poor creativity capabilities in comparison with internet, you heard some “we are not there yet”, “mobile need few more years to be ready”,”there is no data usages”, etc…

Does that ring you a bell? the old media marketers 10 years ago when there were talking about internet.

If you recognize yourself in this, please wake up.

Mobile Age is NOW

To realize that, you need to look east (Japan, Korea, Singapore and an European exception Finland with Nokia) not as usual to USA (my opinion of USA telecom industry here), Iphone missed “rendez-vous” with Europe is another example.

+8* is a good information source for that

Then, you will realize why Google is so active with the android platform.

In a near future, their main competitor will surely be Nokia with their 40% market share (more than 300 millions handsets per year) and their Symbian platform.

I quote Tim O’Reilly in a recent post:

a platform beats an application every time.

the platform beats the application, the mobile will beat the Internet.
Who will be the next champion ? Do the maths.

I spend a lot of time talking, thinking about the evolution of advertising. I even get pay for that.

for a lot of peoples, Nike or Apple are the champions. In a way, it’s true. They have great products, they are really strong in innovation and their communication is really best in class.

But Google is the real champion as a brand and as a media.

1) Google Brand reaches the Top 20 (source: Interbrand Best global brands 2007) in less than 10 years without buying any media. For that, they have created the first business case of every advertiser dream.
How did they do that ? one key word: Innovation
Strong buzz around products: Gmail, they offered 1Go storage capacity by invitation only when others offered only 25mb then 250mb in reaction. Bottom line
Open Culture: Google maps, every website can use them for free, a real service and Google gets its logo on every page
Entertainment: how hasn’t play hours with google earth. Bottom line for them, you have called all your friends about it and spent hours with a Google logo in front of your eyes.

2) Google is the center of the advertising world
Having a website google search compliant is now mandatory,
they have redefine the advertising model by introducing remuneration based on performance, first online but TV is next to come (read here).
With Adsense, Google have provide a lot of startups their first stream of incomes. In a way, Google is also the most active business angel

To me, Google will be the spark that divide she advertising market into two worlds.

The “performance model” one where you will pay only for results based on its ultra dominant system Adwords. I’m not talking only for advertising but for all kinds of media, especially TV because of TIVOs systems and Catch up TVs.

It will the largest share of the market in term of revenues, but not in term of profit for the industry except for google of course.
This world will be good for generating sales, driving traffic but not to create brand or create your reputation. This last point introduce the second world in the advertising industry : the advertising on demand world.

Born with the Internet, the on demand advertising (ODA) can be define by one rule: if you have to buy ad spaces to promote it it’s not ODA.
ODA is and will be more and more about creating Branded Entertainment, Application or online services that people want to see, use even pay for it.
Need examples other than Google Earth? M&M’s e-commerce, Burger King Video games, etc..
Isn’t one of the best form of advertising to have people downloading your product, playing with it or spread the world about it?

ODA market will be small in term of market share by definition (remember no media buying) but will be the most profitable segment for agencies

Everything between those 2 worlds will disappear especially the good old $1 millions 30s TV commercial, but it seems that the industry is stunk in the old good “pay per view” model even Yahoo, so Google will have for years a bright blue sky in front of them.

I hope I will be wrong about that (no competition in front of google) but I doubt.