Rico Chan, Managing Director of Oath Hong Kong, India and South East Asia.
As ad spend rises, programmatic buying matures and content marketing takes centre stage, Oath’s Rico Chan believes 2018 will be the year fortunes reverse for the media and marketing industry.
I believe one of my New Year predictions will come true – this being that 2018 will be the year that digital advertising in Asia-Pacific soars into the stratosphere.
And this isn’t just crystal ball-gazing, because we have the facts and stats to prove it.
Across the region as a whole, 2018 will contain the final 12 months when traditional advertising spend tops online investment.
According to eMarketer, 2018 will see 48.8 per cent of all advertising spend directed towards to digital, before nudging over the 50 per cent threshold in 2019.
By this time next year, the pendulum will have well and truly swung, never to swing back.
What’s even better is that these figures clearly still leave ample opportunity for regional digital growth, while the potential for increases in South East Asia’s core markets is even greater.
Forecasts for next year show that 27.2 per cent of Singapore’s total media spend will be in the digital space, Malaysia will account for 23.2 per cent, Philippines 21 per cent, Vietnam 20.6 per cent, Thailand 19.8 per cent and Indonesia 18.8 per cent, so there’s enough room for improvement.
The Interactive Advertising Bureau is predicting that each of these national markets will grow by around 10 per cent in the next 12 months. So what’s driving the digital advancement?
First, we will continue to see a surge in mobile users and mobile video spending. Mobile continues to be the marketer’s prime focus. The fact that consumers are so digitally tethered on mobile devices has been a boon to marketers. Every action a consumer takes on a mobile device is a potential signal to what that consumer needs, wants, likes, and more.
Worldwide, mobile video has witnessed the biggest growth in digital advertising this year and this shows no sign of abating.
This is driven by the large number of new internet users connecting for the first time on mobile. According to Adobe, smartphones were the source of 500 million new internet users over the past few years, with India and China contributing close to four-fifths of these new users. In fact, desktop and tablet traffic is stagnant or dropping across most of APAC.
Take Indonesia as an example. In 2015 mobile accounted for 13.9 per cent of total digital advertising spend, and just 1.7% of the total advertising investment. By 2020, these numbers will swell to 60.5 per cent and 13.9 per cent respectively.
It is a similar story in Malaysia where those figures will skyrocket from 21 per cent and 3 per cent, to 79 per cent and 18.9 per cent.
The second key growth drive for digital advertising spending will be the increasing maturity of the programmatic market.
At times programmatic has received bad press due to concerns over accountability, false impressions and dubious ad placements. But I am really encouraged by the efforts the industry is making to up its game and deliver exceptional service to marketers.
Here in Asia Pacific brands will be ploughing US$452 million into programmatic buys in the region alone by 2019, up from US$106 million in 2015, as confidence in the market continues to increase.
This is buoyed by developments such as blockchain, which if utilised correctly can increase trust throughout the marketplace.
We’re also seeing key industry players come together to strengthen the reputation and accountability of programmatic providers.
A classic example is ads.txt, which is a pre-formatted index of authorised sellers that programmatic buyers can use to screen for fake or misrepresented inventory. Ultimately, this helps prevent the sale of counterfeit and unauthorised impressions in programmatic transactions.
And then there is artificial intelligence, which has the potential to increase the speed, personalisation and scale of campaigns, while simultaneously being able to pinpoint ad fraud and the sites that reputable brands would not wish to appear on.
All of these solutions have the potential to build trust and between buyers and vendors, while at the same time providing more relevant collateral and content to consumers.
In addition, the sheer scope and potential of AI, which up to now has often been hampered by piecemeal deployment, is about to become fully realised.
Whether its creating customer service through chatbots, driving the next generation of CRM solutions, enhancing and protecting brand reputation or delivering hyper-personalised campaigns, AI will become even more embedded in the sales and marketing culture, resulting in cross discipline synergies and compelling campaigns.
Finally, content marketing still has considerable untapped potential in Asia-Pacific and will continue to take a bigger share of the digital advertising pie in 2018 amid surging mobile use, increasing awareness of its ROI benefits and ongoing concerns about the prevalence of ad blockers.
Encouragingly, we are seeing increasing sophistication from brands in the content space, as they move away from seeing it as something of a nice-to-have, to being a fully-integrated and fundamental aspect of a campaign.
Whereas once content marketing was often limited to increasing brand visibility, the most effective campaigns are now closely entwined with technology; developing the path to purchase, driving social media engagement, capturing valuable data and delivering user generated content to strengthen interaction and the ability to adapt campaigns in real-time as well as inform future campaigns.
All of this explains why a recent report from NewBase found that almost 60 per cent of Asia Pacific marketers and agency bosses believed content marketing to be the number one priority for the industry, while in North America and Europe it was placed second.
Each of these key drivers for digital success – mobile and mobile video, programmatic, artificial intelligence and content marketing – will combine to boost the fortunes of the industry in 2018.
The greatest reason for optimism lies in the fact that there is a growing understanding that the most effective campaigns are created when the dots are joined between these areas – leading to better results and an enticing proposition for consumers.
By combining these strategies we can create memorable campaigns and interactions that do not reduce consumers to numbers or demographic classifications, but instead recognise they are individuals with ever-evolving likes, dislikes and needs. This decidedly-digital future is what we really have to look forward to this new year.