Why Singapore marketers are still overspending on offline mediums

Despite the talk of digital mediums growing in importance, Singapore marketers still overspend on offline media while under-investing online. Paid social has the least support in APAC, with 15% of marketers in ANZ and 13% in India planning to reduce their spend.

This is a key finding from the Media Budgets Index research, published by Econsultancy in partnership with Datalicious.

Marketers are failing to match their media spend to where customers actually spend their time, said the study. Budgets are still largely allocated on the basis of historical performance rather than customer behaviour or external insights. Globally, only 31% of executives surveyed saying they base their media spend on customer time spent in each channel.

Agreeing with this was Simon Kemp, regional managing director of We Are Social. He added that the worries of click fraud in the digital world definitely factors in on why marketers might not be very big on paid social.

When it comes to online versus offline, Kemp said marketers need to forget ‘lines'; instead of thinking which medium to invest marketing dollars in, they should plan around people’s lives, and where and when the marketing will be most relevant  and plan for 'content in context', not ‘messages in media'.

Marketers are obsessed with the line, but it’s a distraction.

The study also  said digital is where the most consistent growth and investment is being seen, said the study. An examination of total spend across online and offline channels shows that TV advertising continues to dominate budget allocation. In fact, 50-60% of executives plan to keep their TV commitments the same for the coming year. However, EMEA and Singapore are displaying more caution in this area.

Several traditional media channels are continuing to experience declining investment even though some, including radio and print media, show a reasonable degree of ongoing consumer interest.

Rajesh Mahtani, head growth and strategy officer at Starcom MediaVest Group Singapore said:

Singapore's small geography also contributes to why marketers might find traditional mediums attractive. But the traditional ad spend is no longer increasing year-on-year.

"While the country and its people might be digitally digitally savvy, its space constraint makes it easy to grab a majority share of eyeballs with a simple print ad or OOH execution. Moreover, the staple of traditional mediums available have been tried and tested which gain marketer confidence," he said.

Mahtani however, also added 2016 will probably be the year where many clients shift and become more sophisticated in their digital media spends.

"Progressive clients have already been investing a but of their dollars in digital and a majoprity of clients now understand data and tech better to create personal and precise ads. 2016 will definitely be a pivotal year for clients," he added.

While most executives expect to increase their exposure on mobile platforms, the sector is slightly more volatile and 6% voiced an intention to decrease their investment. Email is continuing to enjoy a resurgence, with over 90% of executives stating a commitment to either maintaining the status quo or increasing their investment.

Nonetheless, Asian executives said have the most confidence in their ability to monitor consumer time, with the UK being least confident in this area. The study states however, only a third of global marketers have a good idea of where consumers are spending their time, and a further half (49%) can measure this to at least some extent.

Jim Clark, research director at Econsultancy, said: “The research underlines the fact that despite the rising number of digital signals available, organisations are still struggling to evaluate and understand how to get the most ROI from their marketing investments.”

Conversely, the US seems to strike almost the right balance between online and offline (although there are disparities when it comes down to a per channel basis), with only a 3% margin either way which, interestingly, sees the nation spend less than optimal amounts offline. Australia and New Zealand are under-indexing offline and overspending on online but by a slightly larger margin, around 7%. The UK exhibits a more than 10% disparity in spend versus consumer time spent and favours offline media more than it should.

The report, based on a global survey, desk research and in-depth interviews with executives across the UK, EMEA, US and Asia Pacific, questions the extent to which marketers are looking at the relationship between media spend and where consumers are spending their time, and compares this across regions.