Catcha-Says merger to change digital advertising game: Page 2 of 3
By Gabey Goh May 22, 2013
A smart marriage
The deal has also caught the attention of media agencies, with Tommy Tan, media group head for MediaVest, calling it a “brilliant partnership” in this emerging market, and also a demonstration of the growing importance of content creation and digital distribution.
“It seems a smart marriage,” said Andreas Vogiatzakis, managing director of the Omnicom Media Group (OMG) when asked for his take on the deal.
He noted that Catcha has plenty of content and Says has a large social community base, which is the perfect brew of content plus social, equating to social content curation.
“When it comes to sharing, social media users have gotten smarter; many no longer post Facebook statuses about what they ate. Instead, they are using social networks to share their passions, ideas, and content they love. The recent general elections was the best showcase of this explosion,” he added.
Despite the oft-stated importance of digital channels in marketing efforts, digital marketing spend remains relatively low in Malaysia.
In 2012, out of a total of RM7.1 billion in advertising expenditure recorded, Internet ad spend accounted for RM203 million or 2.83% of the total. However this figure is expected to rise in the coming years as more brands shift their attention, and money, to the digital realm.
According to Vogiatzakis, the reason for traditional media still commanding the lion’s share of spend is due to the fact that most Malaysians spending more time online are from key urban cities such as Kuala Lumpur, Penang, Johor and Selangor.
“In the rest of the states (suburban/ rural areas) it’s still marginally higher towards mainstream media. This is why brands still cast a wider net to reach and cover all the masses when it comes to their marketing mix,” he said.
Another reason put forth by MediaVest’s Tan is the fear many people have toward change.
“Clients especially find security in habit, and change requires adjustment or adaptation to a new environment where everything seems different. That said, many brands have ventured into the digital space, albeit each at their own pace, and it is a healthy sign for the industry,” he added.
Tan added that moving forward, he believes advertising will be less about messages and more about content curation, creation and distribution, and increasingly about utilities and services.
“Hence, as more brands start to focus on creating experiences, we are excited about the merger and new ways to tell stories, engage and deliver value to consumers,” he said.
When asked about whether the merger would see some overlap and possible direct competition for the same digital advertising pie, Says' Ng said it would not.
“Absolutely not, because we're providing a big piece of the puzzle as a media solution, but the advertising agencies and media agencies are our partners in putting these pieces together,” he said.
Tan also agreed with Ng’s assessment of the eventual role the new company will play in the advertising landscape.
“They will definitely be a partner to media agencies. The nature of the media business puts focus on communication management and optimisation, which sees us reaching out constantly for partnership and collaboration,” he said.
Next: A sign of things to come?