Yesterday BrandRepublic published a series of articles about how the economic downturn may affect the ad spend growth forecast.
The data is from the UK. However, i think there are merits to relate them to SG or SouthEast Asia region.
I include here some of the main points from 3 articles: “ZenithOptimedia revises global ad spend growth forecast” by Arif Durrani, Media Week; “Online adspend growth halved in 2008” by Fiona Ramsay, Marketing and “Online ad spend up 21% while total ad market falls” by Jacquie Bowser, Brand Republic:
- Global ad spend growth forecast reduced to 4.3% for 2009 (by ZenithOptimedia) due to Economic turmoil in the US and its “domino” effects on the global markets
- However, the important thing to note here is the growth rate is not uniform so it really depends on which markets/region you look at
- Online ad spend growth rate for 2008 is 21% with spend on search (Paid Search mostly and SEO) grows 28%. However, right now Spend on Search for the UK take about 58% share of the spend for Online so many people think that it has reached its maturity.
- Spend on Display ads increases 16% year on year for the UK market
There have been many good comments from readers for the article by Jacquie Bowser as well.
So what all of the above got to do with ad spend in Singapore or SouthEast Asia region?
My personal take on it are:
- SouthEast Asia region has been long considerred emerging markets for Online marketing in general due to low share in the whole marketing budget. (less than 5% of the overall marketing budget)
- There are about 85 millions internet users in SouthEast Asia !
- Many MNCs have their HQ for SouthEast Asia in Singapore
- Markets in SouthEast Asia countries are moving closer to US/UK in terms of the split in marketing budget. Many global brands are forced to rethink their marketing strategies in this economic climate and have to find a better way to engage with consumers
- Spend on Search represents less than 1% of the overall marketing budget for most companies (MNCs, big local corporations etc…) in SouthEast Asia.
As you can see from the figure, there are still ample growth for Online Marketing in general and Search Engine Marketing in particular for SouthEast Asia. Markets in general haven’t really scratched the surface in terms of their understanding about Online Marketing/Search Engine Marketing (SEM) or experienced what SEM can bring yet.
Previsouly everyone said that the spend for Online (Display, SEM) would increase at least 30% for SouthEast Asia. I will make a bold predictation and say that the economic downturn presents a golden opportunity for Search Engine Marketing cause it really forces Marketing managers to think twice about how they spend their money. Hopefully there will be mandate spend from Global HQ for Search moving forwards.
I expect the growth for Search Engine Marketing to be at least 40% or even more in 2009.
Glad to come back to this post later on for reviewing the numbers!
What say you?