Advertising Evolution: why online matters

The internet is no longer a "new" media, it is mass media. So why then is it still considered a niche product? Advertisers today have a plethora of digital media choices with internet, IPTV, mobile, digital radio, digital outdoor, emails, text messages and so much more. 

The one thing that the advertising industry needs to get their heads around is that online advertising is still wrongly being treated as a "niche" new media and advertisers are still allocating a disproportionately small segment of their budget to online advertising.

Consumers are using the web more than ever: seeking information on search engines and blogs, advice on forums, friends on social networking sites, seek news and information and bargains that will make their money go further (especially in this economic downturn).

According to the Synovate PAX 2006 media survey, internet access is up 132% over the past 10 years. However, in most markets, online advertising budgets range from 5% to 10%, but the actual time spent by users is more than 40%, according to Synovate. Furthermore, advertising on TV has remained at an all time high, although TV viewership is stagnant and in the younger demographics declining. Case in point, Synovate Young Asians Survey 2007 shows that consumers aged 15 to 24 years spend more time on the internet than watching TV in China, Taiwan, Singapore, Hong Kong and Malaysia.

Online moves with technology

Online is a word that continues to grow with the technology. As consumers are growing increasingly tech-savvy, they want the most sophisticated means of exchanging information. Traditional mediums such as print and TV are limited in their offerings because there is no room for interactivity or personalisation. These are all factors that the end user (ie the customer) will be drawn to, in the midst of the un-targeted advertising "clutter".

The web can do everything that TV and traditional media can do in terms of movies, videos and commercials through VOD, pre-roll, post-roll, YouTube and a number of video platforms. The web is also no longer about the desktop or even laptop anymore, with increasingly more users acquiring smart phones such as iPhones and Blackberries; now web destinations are all portable in the hands of the user. It is exciting because the creativity is limitless.

It is "prime time" all the time

With specific customer segment targeting, advertisers can connect with the very targeted and desirable audience on the web, minimise wastage on their ad dollars. The Synovate PAX 2008 media survey discovered that internet users are more frequent travellers and more avid shoppers. In Asia, three times as many internet users travelled in the past 12 months compared with non-internet users. The online-savvy crowd from the Asia-Pacific region, in general, bought more luxury items, watched more movies, attended more concerts and owned more tech gadgets.

We think that advertisers also need to understand that advertising online is a measurable, accountable and a trackable platform. Online click-through rates and conversion data can be easily be analysed to help calculate and further increase ROI. This level of accountability and quantifiability is not possible in conventional advertising. Through online advertising, companies can not only enhance brand recognition, connect with consumers and in turn boost sales - but they can also simultaneously gather valuable consumer data that will help to better fine-tune future messaging.

The problem I think has to do with the mindset and most marketers are too comfortable with what has worked for them in the past. But they need to realise that these conventional means are no longer working as media consumption changes rapidly. Conventional wisdom says that advertisers should be ahead of its users but the digital media has proven that users are leaps and bounds ahead and advertisers are slow to catch on to what users want online, on mobile - on all digital platforms.

We think that marketers simply need to re-think their strategies for advertising and must think about digital more seriously if they haven't thought about it in the past. Of course this idea of a stronger emphasis on online advertising is nothing new. The internet industry has been touting the benefits of online advertising for almost a decade now. Advertisers need to be educated in order to see the value of interactive/ performance-based marketing, or else they may be left behind especially with competition catching up and fully embracing digital platforms.

The good news is many advertisers (such as Kellogg) are starting to show signs of getting serious about online advertising. Also, note that budget cuts during these glum economic times may shift ad dollars from traditional media to digital, which will in turn help to shield online advertising spending from the recent advertising downturn, and may in fact, even boost online advertising.

Kevin Huang
CEO
Pixel Media