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Over the past few months I’ve had the opportunity to participate in Workshops around South East Asia with Internet and Mobile Publishers. This is the first such workshops I’ve done with publishers, as most of my time is spent organizing the advertisers in the industry to spend money. The main purpose of these publisher workshops was to discuss how to help the publishers make more money.
My role was to discuss the challenges facing the industry when it comes to increasing the overall advertising spend on Digital Media. I remember back in 2004 when the internet spend in the SEA region was around half of one percent. In putting our 5 year forecasts together we estimated that by 2010 that more than 5% of all advertising expenditures would go towards digital media. Not unrealistic at a time when China was close to 3% and the UK was over 10%. We could not have been more wrong. Today, the internet only represents between .8% to 2.2% across the core 6 markets in South East Asia. The average is a little over 1%.
One main factor is that the penetration rates are still far below those in more developed countries. However, this doesn’t make sense if in a country like China there is an internet penetration rate of around 30%, but the internet spend is close to 10%. The SEA countries also range from 20% to 30% penetration rates, yet their spending lags far behind.
I truly believe that the main cause behind this lack of growth comes from the fact that there is not a mutually agreed upon and accepted standard of audience measurement. I’ve heard so many times from agencies that they get push back from their advertising clients who don’t trust the internet or don’t believe that their audience is actually online. They chose websites to place ads on based upon the ones that their children surf, as opposed to a credible governing body. “If only the rating agencies like Nielsen and TNS would provide us with data, then we could justify larger budgets.”
So why is there not a mutually agreed upon standard in these markets? Why have audience measurement companies not invested in these markets? It’s partly due to the chicken and egg effect. Without large expenditures to begin with, the business model doesn’t support the effort for either the measurement companies, the publishers or the agencies. But there is hope on the horizon. Companies like Effective Measure, TNS, Comscore and Nielsen Online are starting to adapt their model to meet the needs of these markets. IAB has entered Singapore and we can see chapters forming in the outlying countries. Let’s keep a close eye on the effect of standards over the next 5 years. Can we reach 5% of spend? I’m certainly keeping my fingers crossed!!!
I have more posts that can found on my blog
Companies Mentioned:
· Effective Measure TNS Comscore Nielsen Online
Written on Tuesday, 15 December 2009 09:52 by Russell Conrad
