Year of digital advertising

  • Business
  • Saturday, 17 Apr 2010

THE digital segment should be seeing the most growth in advertising expenditure (adex) this year compared to other forms of media, says McCann Worldgroup Malaysia chief executive officer Tony Savarimuthu.

“Digital advertising will definitely see growth as it is starting from a relatively low base. It should grow in excess of 20%,” he says.

For the first quarter of this year, Internet advertising grew 35% year-on-year to RM10mil on the websites monitored by Nielsen Malaysia.

Universal McCann chief executive officer Prashant Kumar says Nielsen’s digital spending figure far understates the actual spending. “Social marketing, search marketing and ad networks are not captured in the data,” he says.

Prashant says Universal McCann tripled its digital billings last year, and its top three clients spend 9% of their total communications media spending on digital.

“There’s a psychological barrier in front of clients which I see in the next two years digital will be able to break through. Then clients will start putting serious money on digital,” he says.

Technology and travel players are already using digital advertising, and Prashant sees huge opportunities for finance, automotive and fast-moving consumer goods clients.

“Last year digital got a foothold into a lot of doors that were previously closed. Clients tested and learned as they were forced to spend on emerging opportunities like digital when their budget was scarce. But this year it is moving from experimentation to serious allocation for digital,” he says.

Omnicom Media Group managing director Andreas Vogiatzakis says digital will play a crucial part in the growth due to the nature of the content and the behaviour of the current digital savvy or capable consumers.

“Digital is under-exploited or under-utilised. With the growing trend in consumerism, there will be a surge in social media, lifestyle and news platforms,” he says.

In a recovering economy, he says, advertisers will have more funds to invest in digital media and be more willing to explore new platforms while continuing their conventional advertising commitment.

On the growth of digital marketing, CEO of Grey Group Kuala Lumpur, Nicky Lim, thinks it would be steady growth rather than a surge.

“While the economy stabilises, we should see an increase in digital advertising expenditure as marketers are slowly moving away from traditional advertising to a more ‘entertaining and fun’ approach using digital advertising,” he says.

He foresees that there would be at least 20% or more increase in digital spending this year due to the fact that clients took the plunge last year, exploring digital possibilities and agencies proved that it worked with a measurable return on investment.

“The economic downturn did bring about a solid future for digital advertising in Malaysia,” he says.

DiGi Telecommunications Sdn Bhd head of products & segment marketing, Albern Murty, says when the company markets to consumer segments with high Internet usage, such as youths and young professionals, the telecommunication company would spend 15% to 50% of its campaign budget on digital media.

“It also depends on the type of product being marketed,” Murty says, adding that DiGi will be putting more emphasis on digital initiatives.

“We believe Malaysians have become more Internet-savvy, and DiGi is determined to explore this new space more than ever. We have already started evolving beyond ‘traditional’ digital advertising and managing our social media communications.

“In 2010, we will be using the digital medium to build more conversations with consumers, nurture online communities and provide even more responsive customer service than ever before. Since we launched our 3G/Broadband service for big and small screens, we have leveraged on our product value propositions and used online media to engage with our customers.”

Honda Malaysia Sdn Bhd managing director and chief executive officer Toru Takahashi says despite the rising influence of online activation, marketing mediums would be based on the customer profile that it is targeting.

“Our media spending depends on the target audience, as different products and campaigns call for different media consumption. We usually use both channels in our activation depending on product models as well as target audience behaviours.

Takahashi adds that digital and non-digital communication platforms appeal to two different groups of target audience and, when executed thoughtfully, messages would be delivered more cost-effectively.

Naga DDB chief operating officer David Mitchell says that globally, he expects digital adex to grow 9.6% in 2010 versus a total industry adex growth of 1.2%.

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