Study: Online ads to keep growing but RP spending will lag

MANILA, Philippines - Online advertising will continue to grow in the Philippines but spending will lag behind other regional markets, a joint study by Internet company Yahoo! and The Nielsen Company showed. Online advertising in the Philippines is projected to grow to $22.11 million by 2010 from $15.54 million this year. While bulk will come from display advertising ($15.04 billion in 2010 from $12.802 billion this year), search advertising is forecast to grow substantially ($7.087 billion from $2.743 billion). Display advertising refers to promotions posted on specific websites, while the latter involves placements on Web pages that show results from search engine queries. Online advertising in the region was forecast to grow by over 60% between this year and 2010, with display advertising again taking the lion’s share. Search advertising, it said, will particularly gain in “less mature online advertising markets" such as Thailand, Indonesia, the Philippines, and Vietnam. Aside from these four countries, the online industry review also covered Malaysia and Singapore, with the latter expected to continue dominating in terms of online ad spending ($51.569 million in 2010 from $41.49 million currently). From fourth on the list currently, the Philippines is expected to lose ground by 2010, slipping to fifth, while Thailand moves to third from fifth. Vietnam is expected to continue taking up the rear. “The upward trend in online advertising across Southeast Asia will not be as hindered by the shadow of a global economic crisis, largely because the region is benefiting from the shift from traditional ad dollars to more effective and measurable digital media," a statement quoted Yahoo! Southeast Asian managing director Ken Mandel as saying. Donald L. Lim, president of the Internet and Mobile Marketing Association of the Philippines, said online ad budgets could even grow by as much as 70% in two years locally since the base is still small. Revenues for the year, he estimated, will hit between P400-500 million. “Even if we only get a few percent of the ad spending for traditional media that would be big already," Mr. Lim said. But Digna T. Santos, executive director of the Philippine Association of National Advertisers, said local companies, especially those selling fast moving consumer goods, would not be shifting most of their ad budgets to online. “In a briefing conducted by online companies a few months ago, they themselves told us not to completely replace our mass media advertisements with online ads," she said. Ms. Santos said online ads would complement commercials in the mass media, as the latter provides reach while the former offers a more personal and interactive touch. “For example, diaper companies can offer on their sites tips for new mother on how to care for their baby or [run a program] that allows them to put in their baby’s weight and age to determine whether their child is underweight or overweight. These are features that traditional media cannot offer," she said. According to website Internet World Stats, the Internet penetration rate in the Philippines was at 15.1% as of June 30, compared to 20.5% in Thailand and 59% in Malaysia. — Don Gil K. Carreon, BusinessWorld