Have e-media licences impacted influencer marketing in UAE?
Dubai - Social media has given birth to a new kind of celebrities; influencers.
You'd be hard pressed to scroll through any social media platform today without some bright-eyed, bushy-tailed face urging you to try the latest restaurant in town, or buy that must-have gadget. Those people are social media influencers and they've been changing the way traditional marketing works.
While the use of celebrities for product or service marketing is nothing new, over the past few years, social media has given birth to a new kind of celebrities; influencers.
And as Taghreed Oraibi, group account director at BPG Orange, told Khaleej Times, it has created "a totally new segment of marketing; influencer marketing", due to the impact these online personalities have on purchasing.
Companies now use these people as the direct-to-consumer tool of choice when it comes to monopolising their newest fad or product. But why? Ease of global reach has a lot to do with it.
A huge part of the booming influencer marketing industry relies on a person's follower numbers and online reputation. They have the platform to reach consumers across the world, within minutes; ultimately dwarfing the audience reach of a pricey television advertisement or billboard campaign.
But earlier this year, the National Media Council (NMC) brought in steps to regulate how this growing online business operates.
Much to the initial howls of some influencers, the NMC introduced a new mandatory licensing scheme for influencers and online media sites, which usually take on brand advertising and sponsorships.
In order to legally operate in the country, the three-tier option means influencers can buy an 'individual licence' at Dh15,000 plus trade licence; a 'partnership licence' at Dh15,000 plus a trade licence; or they can get registered under an official NMC-approved influencer agency.
Speaking to Khaleej Times, Dr Rashid Al Nuaimi, executive director at the NMC, said that so far, "the number of social media influencers who have been granted licences is around 650".
Additionally, 150 licences have been issued to companies that cover as many as 900 accounts on different social media platforms.
"These numbers are constantly on the increase as we speak," he said.
Nearly six months on, Al Nuaimi shed some light on how the introduction of these licences have impacted the social media influencer landscape in the UAE.
"The new regulations have been met with a positive response by the market, particularly so with respect to their stated aim of countering the phenomenon of 'fake news'. Fallacious stories that appear on social media can potentially have an extremely harmful effect on communities, with such 'news' undermining society by sowing distrust of legitimate sources of information." With electronic media now noted as a highly influential and widespread tool, he said it is "imperative that we enhance its reliability and develop the quality of its content".
"The introduction of these regulations will help bring in more powerful and more credible social media platforms that will for sure bring in an improved perspective to its landscape."
Regarding the benefits to the influencers themselves (who initially questioned if the licence fees would be worth the payback), Al Nuaimi said it actually strengthens their position within the industry.
"The regulations provide influencers with legal protection in the event that their financial rights were infringed by advertisers, while allowing the government's supervisory bodies to monitor all financial transactions."
Additionally, networking opportunities have increased, he said, as they can now legally participate in exhibitions, activities and events within the country. And the registration also guarantees registered parties with "full access to a list of individuals and entities accredited by the council".
The need to gauge audience perceptions is a huge focus of the NMC, and it has become increasingly important in light of the rapid changes being experienced in the sector.
During the 'Public Confidence in the UAE Media Index,' launched in early 2018, the NMC evaluated the UAE public's main sources of news and information.
The findings concluded that local newspapers were the highest form of local news reliance at 98 per cent, followed by radio stations at 72 per cent, television channels at 59 per cent and news websites, surprisingly, at just 34 per cent.
"We are expecting that the trust in online media as a resource of reliable information will be increased due to the introduction of the Electronic Media Regulations, and that it will reflect positively on its content quality and credibility," Al Nuaimi said.
Influencers, marketers have their say
A synonymous name throughout the UAE influencer industry, Alex Hirschi aka Supercarblondie, told Khaleej Times while some influencers initially shrieked at the idea of paying a notable sum of money to carry on working legally here, it has been a change for the better.
"The social media license has given businesses the extra bit of assurance that many of them were looking for in order to engage with a content creator on social media, and make the decision to apportion their marketing budget to something new."
Being represented by an agency in Dubai, she said they took care of the licensing process so "it wasn't a difficult process, it was actually a very smooth transition".
"It's probably too early to say how the license has impacted the industry as a whole, but it hasn't had any major impact on my business," she added.
Currently, Supercarblondie has 357,246 subscribers on YouTube; 1.9m followers on Instagram; and 4.7 million followers on Facebook.
But have social media marketing agencies seen much change?
"Yes. It has definitely helped to set a precedent for industry expectations. The introduction of the UAE's e-media regulations has highlighted for all parties - influencers, brands, agencies and consumers - the importance of transparency and the need to adhere to global advertising standards," Tanaz Dizadji, founder and CEO of Brandripplr said.
With "technology fuelling influencer marketing at a much faster pace", the growth of the UAE's influencer industry gave rise to multiple problems that preceded - and demanded - the newly enforced UAE legislation.
"From issues surrounding inflated pricing and 'diva' requests to concerns about fake followers and lack of accountability, the new e-media regulations are now shaking-up and reshaping the advertising landscape. These regulations have brought accountability to the forefront of industry practice," she said.
Andrew Thomas, Managing Director of Nexa said initially there was an amount of "uncertainty on who should register and what the law would cover", but ultimately, as more light has been shed on the license regulations, it has "cleaned the influencer landscape and helped regulate a fairly loose industry".
For Oraibi, the benefit of having the license in place has now "increased reliability from all parties involved, since they're operating within the UAE jurisdictions".
And depending on influencer to influencer, some social media marketing agencies said the presence of a license could give them the power to put a higher price tag on their endorsements. However no influencers shared this information with Khaleej Times.
Headquartered in Dubai, two BPG Orange studies conducted in 2016 and 2017 reported that over 70 per cent of consumers' purchasing decisions are affected by social media influencers. In addition, 94 per cent of in-house marketeers in the UAE believe influencer marketing is very significant for the success of their brands.
Due to their effect, Oraibi said "advertising, PR, social media, and media planning and buying agencies, are all in the business of integrating social media personalities in their campaigns".
So tight regulations are a need, not a want anymore.