Brands switch ads to online in Asia

Tuesday 15th, March 2016


AOL has released research exploring the growth and potential of video advertising in Southeast Asia.

The study found three quarters of all buyers and sellers currently involved with video advertising increased their video budget in 2015. Respondents said they had shifted budgets from a variety of other channels to fund the increase, in particular television, search and display. Even so, for the majority of buyers the cut to television budgets was less than 10 per cent. Only one in seven said they’d cut more than 15 per cent of their TV budget to fund digital video.

Xerago comment: As with marketers in other parts of the world, budgets are being shifted to digital – and increasingly so. Unlike the US where traditional advertising and digital spends are almost neck-to-neck, Asia is displaying a far more cautious approach. It seems advertisers are in the learning phase and are trying to see how best they can utilise the medium and the opportunities for targeting and personalisation.

The report highlights two significant trends for the region. First, the preponderance of OTT video and connected TV as an advertising medium. It accounts for 25 per cent of the advertising budget of those surveyed, compared to just 16 per cent in the US and only 5 per cent in Australia.

Xerago comment: Most research from South East Asia shows that being connected to the Internet while watching TV is a strong user preference. Advertisers who can cleverly leverage this trend can see a sharp uptick in campaign effectiveness by creating a wow factor.

Twitter, which is very strong in Philippines and other regional markets such as Indonesia has witnessed a sharp uptick in tweets coinciding with live events such as the boxer, Manny Pacquaio’s fight etc.

Southeast Asia is also experiencing a rapid increase in the use of mobile video. In 2015, most publishers said their video sales had increased, with over a quarter saying sales were up by more than 25 per cent. The medium faces some challenges however, with buyers indicating demographic targeting, cross-device campaigns, and attribution were issues facing mobile advertising.

Xerago comment: It is not surprising that Asia is showing robust growth, perhaps even out-performing the US and European markets. Mobile penetration in Asia is so dense as to almost have reached saturation level, although it will be a while before the entirety of the population move to smart phones. Nevertheless, unlike the US where desktops still account for a large portion of Internet access the Asian region is driven by mobile access.

Social media is wildly popular in Asia and is a popular means for native populations to keep in touch while on the move. Cities like Bangkok and Jakarta have humungous traffic commutes which makes for a very captive audience. Advertisers have been quick to seize on this opportunity.

The report also highlights the increasing adoption of programmatic technology. More than 50 per cent of publishers surveyed said they were using programmatic to sell their premium video inventory.

Alex Khan, Managing Director AOL Asia, said the industry had a healthy attitude to programmatic. “In some parts of the world the early days of programmatic was seen as little more than a platform for real-time bidding. The respondents in Southeast Asia recognise the technology is capable of so much more, with a large proportion saying its key capability is for data-led audience buying and selling. It demonstrates the understanding this region has of the opportunity programmatic provides. That should make the next few years very positive for publishers with video inventory”.

The research was conducted in partnership with Hall & Partners, with fieldwork and data collection from Southeast Asian brands, agencies and publishers across Singapore, Hong Kong, Thailand, Indonesia and Malaysia. The interviews were conducted online in Q4 2015 and represent responses from industry stakeholders who are involved in the buying and selling of digital video advertising (mobile, desktop or OTT/Connected TV).

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