Online ad spend to hit $182.3m by 2010
Published: Dec 10, 2008
Regional - Online ad spend will reach nearly US$200 million in Southeast Asia by 2010, with most of the growth in the next two years coming from display advertising, according to a new study by Yahoo and Nielsen.
The joint study covers Singapore, Malaysia, Indonesia, Thailand, the Philippines and Vietnam, and forecasts spend levels for both display and search advertising for the next two years.
Singapore's display market is expected to rise from US$23.99 million in 2008 to US$26.1 million in 2010, but will be pipped by Indonesia's growth which will hit US$28.45 million by 2010. Strong growth in display is also expected in Thailand, which is expected to reach US$21.36 million by 2010.
Singapore is predicted to remain top in the region for search marketing, with growth from US$17.49 million (2008) to US$25.47 million (2010), with Indonesia also growing strongly to hit US$13.42 million from US$4.68 million and Thailand to reach US$10.07 million from US$2.52 million. Both Yahoo and Nielsen claim their figures are "conservative" and growth levels could in fact be higher.
Stuart Pike, industry solutions director for Nielsen Online in APAC, said while Singapore would be the most "mature" market in SE Asia and Vietnam the most "immature", all five markets have "the basic fundamentals for growth".
"Vietnam, Indonesia and the Philippines will be driving 90% of the growth in the next five years. Indonesia has a bigger scope for growth. [But] it's definitely an exciting time to be in the online industry in Singapore," he said.
Pike said display advertising will grow quicker than search in SE Asia in the next two years, but they will change as each market becomes more developed.
"The more mature a market, the more search's growth outstrips display," he said.
Yahoo and Nielsen claim its Online Industry Review is a first-of-its-kind formal study of the online ad industry in SE Asia.
Ken Mandel, managing director and VP of Yahoo SE Asia, said because the region doesn't received as many ad dollars as North Asia (China, Japan etc), "we need to bring insights to advertisers otherwise they can't plan".
"There's a reluctance [for marketers] to go online because it's difficult - we want to reduce that," he said.
Pike said the global economic crisis is also pressuring advertisers to spend more money on digital.
"The downturn is forcing marketers to online. It's a stimulant to use online," he said.
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From the conversations we have been having the catalyst for dramatic change in online spend levels could come next year from necessity. The downturn is likely to see more marketers test out online options and try to discover for themselves whether the chattering classes in the online space are right that online is actually effective. If they find that it is in the hard times, when the good times come back, the spend levels are likely to remain steady and even increase. Do others agree the downturn may bring online front and center in Asia for marketers finally?
in theory, i agree. in practice i think it's a matter of two things: 1. how well educated the market is in terms of having confidence in digital marketing 2. brands getting the right advice to ensure that the attendant digital campaigns are strategised, managed and executed properly. i also hope that display advertising will be done much more either on a CPC/CPA basis or by using rich media and not mostly based on a CPM model using non-rich media creative since i really worry that display media on a basic CPM basis usually delivers so little value to brands. in addition, it can be harder to deliver really good ROI (although there are certainly exceptions!). also disappointing is that so little is projected to be spent on search marketing (SEM). done right, SEM can deliver so much value and great ROI--on average far better than standard, non-rich media bought on a CPM basis in my view. and this doesn't even count the vast potential of exploiting social media where in many cases the media cost is zero! of course, there are still manhours of time to be spent and other tasks that must be paid for but at the end of the day, the expenditure can be far less than traditional online media advertising and the payoffs can be huge--not only in terms of hard ROI but also in terms of lasting brand value derived from exploiting conversations and other web 2.0 benefits, lasting search engine juice and so on. jeff zweig chief guru, web guru asia http://www.webguruasia.com