All posts by digitalinasia

How Google and Facebook are Eating the APAC Ad Industry

By Tom Simpson

A quick check of their books reveals that in the first quarter of 2017, 92 cents of every new dollar spent in online advertising across Asia Pacific (ex. China) went to Facebook and Google.

APAC Ad Revenue - Digital in Asia.com

That’s an incredible statistic. The good news is that digital marketing in the region is clearly experiencing strong growth, with revenues up by $1.23 billion year-on-year in 2017. The bad news? Of that $1.23 billion in growth, virtually all of it – $1.13 billion in total – goes to Google and Facebook, with only $100 million to share across the remainder of APAC publishers.

apac ad revenue growth yoy

Facebook and Google combined revenue this quarter hit 51% of all APAC revenue, meaning more budget goes to to Google and Facebook than every other digital publisher in the region put together.

Share of APAC Ad Revenue

Google and Facebook also forge ahead in terms of revenue against all media in the region, taking 15 cents in every 1 dollar spent. This is up from 12% – or 12 cents in the dollar – last year, and represents the increase in budget flowing from traditional media, including TV.

share of apac all media ad revenue q1 2017

None of the above is new news, with commentators globally highlighting the hold this duopoly already exerts over the advertising industry.

But in a week where Fairfax journalists in Australia strike in protest at cutbacks, and against a wider backdrop of losses and job cuts at traditional media outlets across Asia Pacific, it is especially concerning.

Where next? Publishing in general, and the ad tech industry specifically, is a challenging area, with multiple undifferentiated players, sometimes murky value chains, and VC money looking for safer havens. Many analysts predict massive consolidation in the years ahead. In fact with telcos and consultancies worldwide already positioning for unified marketing technology stacks, most would say the consolidation has already started.

Beyond that, The TradeDesk continues it’s roll with an IPO and recent big win on P&G; AppNexus and other major players forge a data alliance to bring much needed people based marketing data to open programmatic; and Integral Ad Science plus other key players have launched in the region, aiming to bring much needed transparency to what can be a difficult to navigate ecosystem. Even Google and Facebook cannot be sitting easy in the face of recent brand safety issues, fake news and Amazon putting increased focus on a server-to-server header bidding product that promises to put power back in the hands of publishers. P&G’s Chief Brand Officer Marc Pritchard has made a call for transparency and open measurement across walled gardens in recent speeches, and this also seems to be making an immediate – and deserved – impact.

Finally, a note from history. In the early 1900s, the United States had around 2,000 firms producing one or more cars. By 1920 the number of firms had decreased to about 100 and by 1929 to 44. In 1976 the Motor Vehicle Manufacturers Association in the US had only 11 members.

In many ways digital advertising, and the industry that surrounds it, is it’s own worst enemy. All dollars eventually become digital dollars, so it is the only show in town. But a show obsessed with the next shiny thing, full of incomprehensible – and often meaningless – metrics, and more importantly, critically lacking in real transparency. Programmatic has only accelerated these tendencies.

Google and Facebook have done a huge amount to bring new money into digital advertising by simplifying advertising for brand marketers. And they have reaped the rewards.

However, they are now part of a systemic change representing an existential threat to an entire industry – media, advertising, agencies, publishing, journalism are all caught up in this – across the region and globally. Change rarely comes without casualties. The struggle for monetisation continues.

A huge debt to Jason Kint (this chart in particular) and Brian Nowak at Morgan Stanley for the inspiration for this article, and the work they have done creating similar graphs for Global and US ad revenues. Corrections welcome. Numbers are based on Facebook and Google publicly filed earnings information and best industry advertising revenue estimates – but someone out there may have a better view. The major assumption in this data is to exclude Chinese advertising spend both from Google and Facebook earnings information and APAC industry spend estimates to avoid distorting the data in a market where Facebook and Google have small (although not insignificant) advertising businesses. All the data is available on a public Google sheet (yes, sorry, it’s Google!) here.

Notes and References.

1. Google 2017 1st Quarter Earnings Report: a. Estimated based on reported total APAC revenues x 90% (percentage of Google revenues represented by advertising) b. Excludes Google revenue in China estimated based on APAC revenue data sources.

2. Facebook 2017 1st Quarter Earnings Report: a. Estimated based on reported total APAC revenue by User Geography b. Excludes Facebook revenue in China estimated based on APAC revenue data sources.

3. APAC digital revenue data compiled from: IAB, eMarketer, GroupM, ZenithOptimedia, McKinsey & Company

4. APAC all media revenue data compiled from: IAB, eMarketer, GroupM, ZenithOptimedia, McKinsey & Company.

Advertisements

Indonesia’s Digital and Content Marketing report

Get Craft recently surveyed 150+ Indonesian marketers asking about their digital & content marketing habits. 55% of marketers still lack clarity about how their digital marketing drives business objectives. Other key findings included:
  • Marketers spend 31.5% of their budget on digital, 76% say this is an increase
  • Average and Median digital marketing budget of IDR 1.9 billion / year and IDR 875 million / year, respectively
  • Digital marketers’ key problems are around budget restraints & skills/resources gaps
  • Customer experience & content marketing are the most exciting growth opportunities
  • Content marketing is generally used for engagement & awareness – but B2B measures primarily lead generation
  • Written articles and videos are the most effective content marketing types
  • B2B brands prefer more to invest in dedicated in-house content team, whilst B2C relies more in agencies

You can download the full report here.

6 Interesting Start Up Ideas at Innovfest Singapore

1. V-Key managing trust and identity with virtual hardware on your phone

V-Key is a global leader in software based digital security. V-Key is the inventor of V-OS, the world’s first virtual secure element that uses advanced cryptographic and cybersecurity protections to comply with standards previously reserved only for expensive hardware solutions. How does it work? They create a virtual hardware smart chip within an app, meaning identity is held in the same way as on a cashcard smart chip – and with the same level of security. Interesting ultimately for anyone concerned with real world identity, which is why they already work with governments worldwide. Prepare for your passport to change in the near future. Trust simplified.

2. Handshakes automating corporate due diligence

Handshakes applies natural language processing and machine learning technology in an innovative way to analyse corporate data and publicly available unstructured data. The platform can then fuse this data with a companies existing unstructured databases to provide strategic intelligence about who to trust and who to do business with. Exciting stuff and sure to disrupt back offices globally – corporate due diligence is suddenly a trivial task.

3. Xjera Labs video analytics for crowd control

Xjera Labs focuses on revolutionary smart video content analytics (VCA) by implementing deep learning based VCA for various commercial applications. Kind of like Minority Report.

xjera_labs_crowd_scenario_sh_deployment

4. IOT Factory simplify the Internet of Things for normal entrepreneurs

IOT Factory have built a unique Software Platform to make any sensor, any device, using any network (M2M, LoRa, SigFox, BLE and many more) speak a desired language, through dashboards, reports, smart alerts, and easy integration capabilities. Essentially they’ve automated the back end of the Internet of Things so non-technical innovators can start to build on it. Thank you.

5. SettleMint, a blockchain for democracy

SettleMint is a fintech player working with distributed ledger technology. One of their projects, called SettleMint Ballot Box, uses immutable blockchain technology to record votes. In doing so, the company aims to address any doubts regarding the outcome of voting processes and elections. Use cases for the blockchain are crucial for pushing this forward.

6. Playpass bringing versatile Apple Pay / Paywave type technology to events

PlayPass are all about events and technology. They provide RFID solutions to allow better event management – in short every attendee gets an RFID wristband. From the moment the gates open real-time reporting tracks and displays the number of visitors on-site, which brands and activations are of interest to that visitor and what they consume and purchase.

Singapore Intensifies Focus on Data and AI Tech

SGInnovate this week presented ARISE, an Artificial Intelligence-themed event at innovfest unbound 2017 as part of a long term investment in AI and data driven technology. The anchor event of the Smart Nation Innovations Week, innovfest unbound is Asia’s largest innovation festival with more than 8,000 attendees.

ARISE is planned to provide a platform for researchers, academia and industry leaders to explore emerging AI trends and give insight into how it will affect the way we live and work in years to come.

Among the leading figures from the tech sphere at ARISE was Dirk Ahlborn, CEO of Hyperloop (first proposed by Elon Musk), who revealed an inside story of the smart people and smart machines powering the next generation of transport tech.

Macro trends such as machine learning, robotics in the workplace and in the domestic sphere, emerging technologies, and the march towards artificial sentience were also covered.

Steve Leonard, Founding CEO of SGInnovate, said: “Artificial Intelligence has the potential to dramatically impact many areas, such as Healthcare, Transportation and Education. In fact, without even realising it, we have all embraced some form of AI in our daily lives – such as virtual assistants in our phones – and the next few years will bring exciting advances in many ways.”

“We passionately believe that Singapore has the right resources to be an important hub for research, so the challenge for us here is to ensure we are leaders in the development and use of AI capabilities to improve the lives of people here and around the world. We think ARISE is an extremely timely event, and we look forward to the constructive discussion around the challenges and the opportunities, that AI will bring.”

Today, Singapore is already a fast-growing influence within the realm of AI with the country ranked second globally by field weighted citation impact for AI R&D.

On a global scale, the AI market is growing rapidly. It is estimated that revenue for the cognitive systems and AI market will increase from an around US$8 billion (S$11.1 billion) in 2016 to over US$47 billion (S$65 billion) by 2020.

To further boost Singapore’s AI capabilities, the National Research Foundation (NRF) Singapore recently announced AI.SG, a national programme in AI driven by a government-wide partnership with SGInnovate as one of the partners.

NRF will invest up to S$150 million over five years in AI.SG, which will catalyse and synergise Singapore’s AI capabilities to power our future economy with practical solutions to real-world challenges.

“As a private company wholly-owned by the Singapore Government, SGInnovate has one purpose – to help aspiring entrepreneurs in Singapore imagine, start, and scale technology-intensive products with the potential to be globally relevant.  We are working with entrepreneurs and investors in industries such as healthcare, energy and transportation, all of which are seeing a flurry of artificial intelligence (AI) startups.  The launch of AI.SG helps give a solid foundation which a wide range of activities in academia, research, corporates, entrepreneurs and investors can build upon,” added Mr Leonard.

MediaMath Launches Brand-safe Curated Publisher Market

MediaMath has announced the launch of a curated publisher marketplace product to deliver premium, high quality media. With the brand safety questions around social media and UGC environments right now, this is a timely move.

The Curated Market will employ a stringent set of brand safety standards and protocols:

  • Focus on large scale, high quality publishers based on ComScore
  • Privileged access to high priority inventory in the publisher ad server
  • Transparent, validated URLs only
  • Exclusion of most user generated content, specifically in environments or on publishers that do not support content monitoring, verification and blocking
  • Integrations with leading third party verification platforms including Integral Ad Science, DoubleVerify and Peer39 to provide brand safety filters
  • Proprietary Suspicious Traffic Filter inside MediaMath’s platform
  • Exclusion of sites or content promoting illegal activity, hateful or distasteful rhetoric
  • Ability to opt out of all user generated content – often the source of brand safety issues – paying only for secure, brand-safe inventory across all channels including display, social and video.

To help ensure MediaMath stands by the brand safety promise, MediaMath clients using the Curated Market will not pay for media if it does not meet the agreed upon criteria at the publisher level. Specifically, if advertisers find their ads are run on previously determined unsafe inventory they will be credited with a refund for those impressions by MediaMath.

Joe Zawadzki, Chairman and CEO of MediaMath, said: “Digital advertising has long promised the ability to change how marketers interact with their customers, but the ubiquity of channels and content means marketers need to be more selective. The Curated Market offering provides transparency and hygiene in execution and reporting, audience addressability at scale and accountability for actors in the digital ecosystem, across all channels. It will change the way marketers think about buying ads.”

Overall, this is a smart move from a DSP that has let competitors – The Trade Desk and DBM to name two – get a jump on it in recent years. A commitment to brand safety is increasingly what brands are looking for in 2017, and MediaMath is to be applauded in taking a proactive approach.

iKorea: Media Reps – Past, Present, and Future

iKorea is a new column by Soyoon Bach, a Digital Marketing professional in Seoul, covering developments in the Korean digital ecosystem.

If you work in advertising in Korea, you will most definitely have heard of the term “rep sa.” “Rep” is short for “representative” and “sa” in Korean means “company.” This is a shortened phrase for agencies that Koreans refer to as “media representatives.” So what exactly are media reps?

The general hierarchy of the Korean digital advertising landscape goes like this:

Advertiser → Ad Agency → Media Rep → Publishers

Simply put, media reps act as liaisons between agencies and publishers. They arrange the sale of media inventory on behalf of advertisers (or agencies). Media reps also provide media plans, intricate reporting, optimization recommendations, updates about the newest publishers and ad types, etc. Many media reps have proprietary technologies that make setting up ads easier, provide key insights, and run ads more efficiently.

The first ever media rep can be traced back to 1980 with the establishment of KOBACO. They were resellers for TV ad inventory and became the sole entity to control all the domestic TV ad inventory. They retained their power until a constitutional court ruled this as illegal monopolistic practice.

Since then, Korea has diversified its media rep offerings and media reps have especially become a key player in the complicated world of digital advertising. Usually, ad agencies don’t have the time or resources to keep contact with every single publisher or media platform out there and know which ones are best for their needs. This is where media reps come in. They synthesize all media-related information and updates and provide agencies with the insights they need. They let us know which creative is best served on which platform. Some platforms also have strict inventory booking processes. There are minimum spends, minimum ad periods, and cancellation fees. Media reps keep track of these processes and give ad agencies a heads up when they think certain bookings will become an issue.

The initial idea of media reps started out as a broker, a simple reseller. Now, they have evolved to so much more. They are media agencies for ad agencies, providing critical services that they can’t get from publishers directly. For instance, if an ad agency is working with multiple media platforms without a media rep, it’ll be up to them to individually communicate and negotiate with the publishers, set up the ads, aggregate the data, and compile the reporting. However, when you go through a media rep, they provide all these services for you so that you can spend more time tending to your clients.

Because this is such a common practice that’s taken for granted, it’s easy to forget that there are actually no regulations in place regarding this process. There’s no restrictions preventing agencies from bypassing media reps and going directly to the publishers. Similarly, there’s nothing to stop media reps from reaching out directly to advertisers. However, this practice continues to exist because this breakdown and distribution of tasks lets everyone do their jobs more easily.

A client can have one contact point for all their media dealings (the agency) instead of having to individually contact the publishers. Agencies can also focus more on making creatives and strategizing on the overarching direction of the campaigns. Media reps gain more clients and without much effort by teaming up with an agency and publishers also have the same benefits by teaming up with a media rep. The benefits are so real that Korean publishers will also pay back some of the money to media reps or agencies as a sales commission. And this commission could be as high as 20%.

For how much longer this model will persist, only time can tell. But media reps are already starting to feel the onset of programmatic media buying as a threat to their business. Global agencies are receiving pressures from their global headquarters to implement systems such as DBM and manage it internally, taking some business away from media reps. Media reps are frantically trying to develop their programmatic departments so that agencies will still be incentivized to use them for these services.

What’s for sure is that we’re hitting another disruptive phase in digital advertising and how media reps will fit into this picture is still to be determined.

From IOP to IOT: Consumers, Marketers and the Connected Future

Aparna Krishnan, Associate Director of Strategic Planning, Mindshare, Malaysia

From the Internet of People (IOP) to Internet of Things (IOT): we are at the cynosure of behavioural change and technology. Asia Pacific known for its heterogeneity is a motley of sub-cultures and mind-sets, yet consumers in the region are unvaryingly relinquishing control and giving authority to technology. The screen bathing Asian consumer is appraising Connected Living as an evolution mandated by reliance on technology and the need for convenience. The numbers say so.

Within the APAC region, the adoption rates for smart technologies/connected objects have been slow yet steady. The most popular connected object being Smart TV, followed by Smart wristbands and then the Smart watch. In terms of appetite of markets towards connected objects – China leads ahead of the curve, followed by Thailand and then Japan.

sdhliush;ODQSource – Global Web Index, Q4 2016

In lieu of the profusion of data and our knowledge on adoption of smart technology, below is a realistic prophecy at APAC’s ‘smart’ future both from a Consumer and Marketer perspective.

The Consumer Perspective

The jarring digital sever at home

With the multitude of solutions that smart objects provide, more and more consumers could fall prey to the Ostrich problem – the tendency to bury their head in sand and intentionally avoid or reject information. Picture this – a family sitting around a smart dinner table not talking to one another in the real world, the parents looking at data records transmitted to the table from the kid’s shoe that monitored how the kid had been holing up and not interacting with friends!

Connected living could be constructing glass walls between individuals who can communicate with each other but instead choose not to. We could be rewiring ourselves to function better online than offline!

Return of TV time!

With Connected living freeing up more time in consumer lives there is bound to be a rise in Couch Culture, this could possibly spell the comeback of TV time in Asia. It might not be linear TV or a streaming service on the TV screen it could be content being rendered on any flat surface in a smart home. This surface agnostic content streaming could be intuitive and customized with input feeds from other smart objects such as their mood info relayed from their smart clothes.

Picture this –  In Singapore, an overworked millennial is trying to get some sleep after a long day at work, however brain activity measured predicts that sleep will be induced only 3 hours later thereby turning the ceiling into a screen streaming his favourite TV show that automatically switches off when he dozes off.

Circle of Trust will wear out

Due to the eavesdropping ability of connected objects privacy concerns in consumers will touch an all-time high. Mindfulness of consumers towards the types of data being collected and shared by connected objects will be questioned; they will empower themselves to read the labels (like wash care labels) on smart objects. Because of a chunk of responsible and mindful consumers there will emerge conversations around what kind of data can be shared and stored by smart objects. This could possibly also create room for housekeeping rules related to privacy.

Living in the moment, we are all aware that though data steers the marketing of today, it is the consumer who keeps control. This is explicit from the fact that in spite of exponential growth in mobile penetration advertising is not embraced to the same extent. In such a chaotic context, we marketers cannot be desperate for order and a rulebook – we must avoid being overwhelmed by the data and avoid a fool’s rush in mentality.

The Marketer Perspective

Real time data will deliver immediate insights

There will be a new source for observed behavioural data of consumers that could feed in as inputs enabling faster insights into product performance, consumer trends and purchase behaviour. For example, through connected vending machines, Coca-Cola reports spikes in its beverage consumption on college campuses before certain television shows air, a specific insight that not only leads to better understanding of customer demographics, but one that also presents opportunities for targeted marketing.

Diversity in devices and skills

There will be richer diversity in the ‘devices’ and ‘skills’ that can integrate with AI systems , fuelled by an open source model.

Eg: C by GE is a table lamp that incorporates the Alexa Voice Service, a microphone and a speaker, and consumers can use it without possessing an Echo – or even a smartphone.

Hyundai providing members of its My Hyundai program with the ability to start their vehicle, set the internal temperature and switch on the lights before leaving the house.

Shift in the dynamics of advertising

There will be a transformation in the way low involvement products are being purchased.

FMCGs being the key Adex contributors in the APAC region could be frontrunners and the biggest beneficiary of Smart living. The replenishment of detergents by the washing machine through e-commerce partnerships, the refrigerator ordering milk for you to pick up on your way back home etc. The categories and brands with loyalty and high frequency of purchase stand to benefit the most. It might even usher in a change in the dynamics of advertising – with marketers having to focus only on brand building efforts.

A breakthrough example of Connected objects used as a marketing tool to deliver sales is the case of Rexona Deodorant in Malaysia. We used Wearables to communicate the Motionsense technology that releases freshness withheld in capsules on moving. This was a great example of media integrating with Smart objects to deliver business results, a 2% increase in penetration!

Undoubtedly, adrenaline times are here!

As marketers in the quest to future proofing businesses in the Connected landscape, we need to win both hearts and minds; the trick is to be User first, technology second and to dwell in the possibilities.

Unilever Launch new Singapore Innovation Hub

Unilever Foundry and Padang & Co this week launched LEVEL3, a co-working space that pushes the boundaries of collaboration and corporate innovation. Redefining the traditional concept of workspaces, LEVEL3 brings together Unilever, startups, and entrepreneurs to encourage innovation and create new partnerships that deliver real and meaningful business impact.

“LEVEL3 stems from our mission to make sustainable living commonplace. It offers our business a direct connection with disruptive technologies and changemakers to shape the way we work – ultimately impacting people’s lives,” said Pier Luigi Sigismondi, President, South East Asia and Australasia. “LEVEL3 is the springboard for startups to scale and build successful businesses.”

Built within the Unilever regional headquarters in Singapore, the 22,000 sq ft workspace provides proximity to Unilever brands and functions, and access to existing Unilever Foundry programmes. To date, 15 international and local startups have already established themselves at LEVEL3, including Adludio, ConnectedLife, Datacraft, EcoHub, GetCRAFT, Next Billion, Olapic, Snapcart, TaskSpotting and Try and Review.

LEVEL3 focuses on the following areas: Marketing Tech & Ad Tech, Enterprise Tech, Products & Ingredients, New Business Model Innovation and Social Impact.

New Technology and Partnership Opportunities with Global Britain

The UK recently kicked off its largest ever international trade and investment marketing campaign. Aimed at international businesses and governments the campaign plans to showcase the UK’s trade and investment opportunities to a global marketplace, including the EU and beyond.

The comprehensive, multi-channel campaign will display a series of new images showcasing the UK’s world-leading products and services, including advertising in international airport hubs such as Hong Kong, New York, Los Angeles, Dubai, Frankfurt, Amsterdam and Singapore; press publications; along with substantial digital promotion.

As part of this international push, the Department for International Trade is stepping up its efforts to help international companies looking to trade or invest in the UK to find the right opportunities for them.

A recently launched interactive digital service – http://www.great.gov.uk – will provide practical advice to UK businesses ready to take the next step into new global markets, or international buyers and sellers who want to know more about the UK market or how to buy British.

The digital service will also include information on seven sectors, from technology to food and drink, so that international businesses can easily navigate the UK market and make an informed decision about the best investment opportunities.

Jo Hawley, Director of International Trade and Investment at the British Consulate in Hong Kong added: “Hong Kong and UK trading links have gone from strength to strength over the last 20 years. In the British Consulate General in Hong Kong, we are working with record numbers of Hong Kong and mainland Chinese investors expanding their businesses into the UK as well as UK companies keen to do business in Hong Kong. We hope that our new campaign and digital hub will encourage even greater trading links.”

The UK’s technology links across Asia continue to grow, with Dyson opening a new Singapore tech center focusing on R&D in AI and software this week.

Over the coming months the UK government will be reaching out to more global partners to facilitate global trading relationships. For more information, please visit http://www.great.gov.uk.

 

Interaction 2017: Group M Global Digital Forecasts

Each year GroupM publishes its overview and speculations on the state of digital marketing and its implications for advertisers. This year’s report – Interaction 2017  predicts that in 2017 digital’s share of ad investment in the developing world will at last have caught up with the developed world, to around 33%.

10 countries have already witnessed digital overtake TV, with a further five expected in 2017, two from APAC; France, Germany, Ireland, Hong Kong and Taiwan.

Interaction 2017

In 2017 it’s challenging to discriminate digital marketing from all marketing. Consumers barely separate their digital and analog lives; little media is published in only analog form and enterprises infuse digital processes into every aspect of their organisations.

However, it’s probably true to say that marketing strategy and marketing services remain more siloed than consumer behaviour, and equally true that marketing and sales organisations remain more separated than they should be given the collapse of the purchase funnel.