MEDIA SCENE OVERVIEW. UM Malaysia predicts the shape of advertising for 2015 and identifies trends that will define the year.

Transcription

1 UM Malaysia predicts the shape of advertising for 2015 and identifies trends that will define the year.

2 MEDIA SCENE As Digital media proliferates, 2015 is seen as the year of Automation. Traditional media sustains but needs a new strategy to curb its decline. The Malaysian adex is set to see strong growth this year with a 6.8% increase in ad spends compared to This would result in Malaysia s adex for 2015 rising to RM9.80billion compared to RM9.18 billion in The fastest growing medium is Digital which is projected to grow by 32.5%. This growth is contributed by rapidly growing formats namely Social with a growth rate of 67%, Video growing at 32% and Mobile ballooning at 52%. These are positive signs that show the industry is moving to where consumers are. The growth in digital is driven by an increase in ownership of smartphones and tablets encouraged by rising internet penetration. Malaysia s broadband penetration rate now stands at 67%. As digital marketing continues to proliferate, companies will and should stop obsessing over digital tactics as an isolated quick-fix for their marketing problems. Instead digital marketing should be about cultivating an ecosystem of mechanics united by a common strategy that delivers measurable results. The rise in digital will also influence this year s most powerful trend, automation. This will translate to media being bought and sold programmatically, in real-time, matching the needs of individual impressions with the right target audience. In 2014, about 10% to 20% of client s digital budgets were on programmatic. This is expected to increase between 50% in The ad spend mix for PC, Tablet and Mobile in 2014 was respectively 80%, 12% and 8% and this is expected to increase to 70%, 18% and 12% in Programmatic will continue to complement video inventory platforms by providing competitive Cost per Completed Views. 386

3 This is the year programmatic will be less about creative strategy and more about content strategy and content architecture. Creative amplification and creative expression will be heavily influenced by data. Data will personalise creative expression to cater to countless number of audiences, something that would be too time consuming and cost inefficient if done manually. Creative technology is becoming more important in pushing campaign innovation. This marks a major change from the cost-saving focus that dominated programmatic discussions in The year 2015 will see a rise in mobile marketing as many marketers focus on driving Mobile First. Brands need to leverage increasing smartphone penetration and time spent on mobile devices. Marketing will continue to follow where user attention is and it is on mobile devices. Brands need to be prepared to monetise traffic from mobile Search, which has historically been harder to do than from desktop. Site experience, content and transactional flows need to be optimised to meet the increasing flow of users from mobile devices. Advanced and increased awareness around Mobile analytics and measurement will provide marketers the confidence to shift more budgets to Mobile. Mobile device screens are increasingly becoming the cornerstone of audience attention. 80% of Malaysia s online population is smartphone owners, and one third of all Internet users in Malaysia look at their mobile screen the first thing in the morning, prioritising it over family, partners and everything else. With increase in mobile analytic capabilities, the screens are becoming more aware and can almost read the mindset of the user across different day-parts and locations, which if leveraged strategically will usher in a new era of data driven intelligence, making communication more effective and optimised. The rise in mobile commerce driven by ease of transaction is another area where brands would flock to, ensuring conversion of every impulse that is created by marketing communication. The whole digital path-to-purchase would be essentially on mobile devices, and hence makes it the most influential screen one can communicate upon. The mobile wave will also focus specifically on how mobile interacts with various Social platforms. Content on Facebook has become mobile centric and 75% of content is consumed from the News Feed. In fact, 60% of major Social network s traffic is mobile. Approximately 90% of social networking site users access their social media accounts via mobile, which has caused a marketing 387

4 shift. Marketers are now looking into avenues to increase mobile penetration such as building mobile apps, partnering with mobile giants such as Samsung and Apple to increase their digital footprints and ultimately to talk to its customers. This goes hand-in-hand with the rise of native video on Facebook as mobile videos are personal and engaging. Native video on Facebook allows the user to view without exiting the page or having to load a different window. This feature will give Facebook a larger piece of the video pie as they will now own video advertising, previously dominated by YouTube. Previously YouTube used to control 70% of viewership however that figure dropped to 50% last year, with Facebook grabbing the 20%. This year video will become more digitally pervasive as data and prices of smart devices get cheaper. Video is taking off fast as it offers users a human experience that closely mimics real life. The new format for consuming content will be dynamic, open and mobile driven. A couple of areas ripe for innovation are interactive video and new types of short-form visual content enabling meaningful experiences. Other Social platforms are also developing new formats to sell impressions on video and devising strategies to protect their market share. At the end of February Twitter launched its own video player and host to prevent from losing out on the video wave. Google has started to block brands from approaching content creators presently contracted to their video platforms. The opening of Facebook and Twitter offices in Malaysia signals growing investments in Social while YouTube continues to control 31% of adex on digital. The importance of Social platforms will continue to grow as users want a unified experience and Social functions as the connecting tissue. The social platform that controls the content and best adapts to Mobile, will win users loyalty. While digital media continues to mature, traditional media still holds a large share of the Malaysian adex. Newspaper advertising revenues are expected to grow by 4% in Malaysia s newspaper ad spends share in 2014 was the highest in the Asia Pacific region at 42%. Newspaper readership in Malaysia is driven by low raw material and production cost. Regular newspaper readership has been stable over the last 2 years though fringe readership declined from 84% to 79%, across age groups. Readership amongst teens has been on the decline as they consume their news online. Though newspaper readership may not be in the decline, but it is only managing to sustain readership. Hence publishers will need to find a way to connect with their readers who are moving fast to consuming their news digitally. Most publishers are still 388

5 searching for the best ways to tap into online advertising and generate lucrative revenues similar to newspapers. To do this, they will need to offer premium, targeted and creative ad solutions. The second largest adex share is TV garnering 37% of industry spends totaling to RM3,436 million. TV viewing continues to attract a healthy number of eyeballs. Average daily time spent on FTA is stable at 2.6 hours while time spent on PayTV is 3.5 hours. PayTV is expected to grow by 10.4% in 2015, and like Digital, the medium is predicted to be another major contributor to overall adex growth. The growth is driven by Astro s increased viewership in suburban areas, improved quality of content and rising advertising rates. This year TV advertising will take a more creative approach compared to the usual 30 second commercial. Content is becoming the keyword to capture audiences who are demanding a more engaging experience from brands. Case in point, Media Prima channels which saw flat adex growth last year, is combating this with the launch of new engaging content this year to win back viewership. Technological advancements such as second screen syncing will bring greater multiscreen control and will have a positive impact on TV. New second screen sync technologies offer great potential to amplify TV spending or to snatch that of competitors. The magazine landscape on the contrary is ever shrinking and now sees a 1% share with a decline of 10% last year versus the year before. Magazines will have to find its niche and hence may take on a different form than we know of it today. Radio will continue to sustain its significant presence in the media landscape. The medium will see the highest inflation at 20%. This is primarily driven by Astro s increased advertising rates. The Out-of-home (OOH) media landscape is set to see a 12.1% growth this year. This growth however may not particularly reflect rising ad spends but instead a rise due to inflation and increased licensing fee due to a clamping down on illegal sites by municipal councils. The implementation of Government Service Tax (GST) will also impact the cost of production and lighting. The first quarter of 2015 has already seen a contraction mainly attributed to cautious spending by advertisers as GST implementation nears and shoppers tighten spending. The year is predicted to see flat growth for the OOH medium as advertisers hold off advertising plans to observe the impact of GST on consumer spending. Digital OOH however is expected to see significant growth of 38% 389

6 in ad spends within the category itself and 50% increase of digital sites, though digital currently makes up only 6% of total OOH boards. At present, there are 10,000 units of static OOH and 640 units of digital OOH. It is predicted that more and more advertisers will start to turn to digital OOH considering the benefits of the format such as faster turnaround time for campaigns, increased flexibility in campaign flighting, opportunity to run multiple creatives for a single campaign and cheaper rates. Media owners are also predicted to see greater returns from digital OOH as margins are higher than static OOH. Nevertheless, the initial investments for digital sites are high. This in addition to suitability of site for the format will delay conversion of static boards to digital despite the benefits. Digital sites growth has mainly been in the Klang Valley over the years but this year it will expand to Johor Baharu and East Coast. This year will see the entry of a new player in the OOH landscape, The Star Group. The multi-billion dollar group is divesting their investments and is set to launch their OOH offering in school buses, via its new business division School Buzz. While their initial plans may or may not make a significant impact in the market, they are definitely a player to watch. In-store advertising is going digital too for the first time, pioneered by Redberry. Primary sites are One Utama and Giant supermarket. Advertisers are hoping this will bring more dimension to in-store ads however retailers are still cautious about introducing new formats as they fear disruption to operations. Cinema advertising is seeing a growth as the usual suspects namely Tanjung Golden Village, Golden Screen Cinemas and Mcat Box Office continue to open new cineplexes across the country. However these media owners should brace themselves for the entry of a new competitor, Cinema Acts. The new brand of cinemas has already opened their first outlet in Puchong and rumors have it that they have extensive expansion plans for the year. Cinema ad spends are expected to grow 13.6%. Overall, 2015 will be a year that advertisers, media owners and consumers thread with caution due to the implementation of GST that will raise costs. With GST implementation from April onwards, the overall media inflation is projected at 12%. We will see some quarters take advantage of the lackluster environment, namely FMCG and telecommunication advertisers who are predicted to increase their spending. 390

7 In addition, Malaysia s various festivals which continue to contribute to healthy ad spend annually are Chinese New Year, Hari Raya Aidilfitri, Merdeka, Malaysia Day, Christmas and school holidays. Report prepared by: Ratnakar Mani Senior Director Insights & Analytics Abhishek B. Associate Director, Digital Anbu Elango Head of Product (Programmatic Buying), World Markets Asia Derek Tan Executive Director Social Media, World Markets Asia Hor Jian Tsin Head of Outgrow Hasnain Babrawala Investment Director 391