Digital marketing expected to exceed RM450m for 2012

  • Digital advertising, marketing bigger than you think
  • Watch out Spock, mind-meld coming

Digital marketing expected to exceed RM450m for 2012ONE of the standout comments made at the May 2 Malaysian Media Congress panel session, Digital Dilemma: Will Digital Replace Traditional Broadcast, was made by Prashant Kumar, UM (Universal McCann) Malaysia chief executive officer: “Three years ago in Malaysia, there was probably one company with a digital budget of RM5 million or more. Today there are over 20 companies in Malaysia. So, I am telling you that digital advertising has arrived.”

[RM1 = US$0.33]
 
Having heard the frustrations of the likes of Google Malaysia and Yahoo’s Asia Pacific head of marketing about how the portion of Malaysian digital ad spend seems to be stuck at 1% of overall ad budgets, I thought Prashant’s comment was intriguing and went to see him for a brief chat.
 
(Disclosure: Naturally as the owner of a digital property, I have a personal interest in the subject.)
 
Prashant says that digital spending in Malaysia last year was over RM300 million, while UM’s predictions is for it to be over RM450 million for 2012.
 
“Digital (ad spend plus marketing) is finally here and the debate around it too has become much more sophisticated,” he observes.
 
What he means is that it is no more a question of should one engage with digital but rather about the where, the how, what campaigns are suited for one’s messages and the expected returns from the campaigns.
 
But here’s a point that is even more intriguing. Prashant says that not all the digital spending in Malaysia is being captured. For instance, the likes of Google, Yahoo and Microsoft do not share how much they pull in from their Malaysian operations. Nor is digital ad-spend well captured by the Nielsen Adex report, the yardstick by which ad-spend in the country is measured.
 
Says Prashant, “Telcos, airlines and banks spend huge amounts in the digital space but not all of it is captured and that is why the market habitually underestimates the digital ad-spend.”
 
But shouldn’t the likes of Nielsen move with the times and try to capture as much of the digital ad-spend in the country?
 
“Yes. But I think those who know, they know. There are some who know but pretend they do not know,” he says.
 
But isn’t it hard to pretend anymore? “Yes, because people can see (popularity of digital platforms),” he says.
 
In fact, Prashant believes that digital advertising has already entered the exponential growth stage with the inflection point coming last year though he can’t put it down to a single catalytic event.
 
Rather, it has been a combination of many factors with two of the key drivers simply being that there are just so many Malaysians living their lives digitally.
 
For instance, Prashant says that there are 13 million Malaysians on Facebook, “Which means it rivals the reach of the most popular broadcast networks.”
 
Meanwhile Twitter counts over 300,00 Malaysians as using its service, a number, Prashant observes, larger than the circulation of the best-selling English daily.
 
Yet this situation is not unique to Malaysia. “At least half the world lives a digital life but do you see digital ad-spend at 50%?” he poses.
 
Surely the trend toward digital ad-spend will pick up steam as Prashant observes has already happened in Malaysia. What will happen eventually is that, to borrow a phrase from Star Trek, a “mind meld” will happen where the old ways and new ways of advertising will come together to share experiences and knowledge.
 
Prashant uses the term ecosystem and it includes the agencies, their clients, vendors and partners and requires a change in mindset, in processes, of acquiring the right skill-sets and coming up with the right measurement metrics.
 
“The ecosystem has to evolve between the current way of doing things and what seems to be the evolving shape of the future. And, a smooth handover needs to happen.”
 
He believes that media agencies are at the centre of this transition and they need to hand-hold their clients to invest more in what he calls “This Digital Blue Ocean.”
 
Various reports frequently highlight Malaysians as being among the most active if not the most active digital natives in South-East Asia, and Prashant acknowledges this fact, especially in social media.
 
“Malaysia is a leader in the social media space. One example of this is how we set up a social media arm called Rally in Malaysia first back in 2009. In fact it has been so successful that we just launched Rally across our Asia Pacific network this month. So, it is a Malaysian export to Asia.”

 
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