Two major investment houses have cut online adspend forecasts for
Asian markets, with one warning that the region faced the same woes as
its US counterpart.
Nikko Salomon Smith Barney lowered previous forecasts of online adspend
in Japan for 2003 by a sharp USdollars 700 million to total just
USdollars 2 billion.
It also noted 2001 revenues and earnings would not meet previous
forecasts.
However, it added the online adspend problems in Asia were significantly
different to those experienced by large dotcoms, such as US-based
Yahoo.
Internet firms in Asia have only one-half of one per cent of the
advertising market, compared to two or three per cent in the US, the
report said, adding that the level of online ad spending per person in
Asia was insignificant compared to the United States.
Another investment house, Credit Suisse First Boston, said overall ad
spending per person in China amounted to just USdollars 3 in 1998,
compared to USdollars 437 in the United States.
The growth of online advertising for Asia, excluding Japan, was
USdollars 175 million in 2000, and was expected to reach USdollars 387
million in 2001, according to Nikko Salomon Smith Barney.
Merrill Lynch also cut its forecasts for online ad spending in China
from USdollars 120 million to USdollars 80 million for 2001.
Analysts noted the Asian online advertising industry was at an infant
stage. As the Internet matures in the region, advertisers would become
more aware of the Web as an effective tool for gathering market
data.
However, despite all the bad press, Jupiter Media Metrix said online
advertising, including word-of-mouth publicity and direct marketing and
promotions, were still successful in attracting new visitors to
websites.
The Jupiter report found the majority of the top 25 new websites last
year were pure play business, lacking the backing of "big-name"
companies.
It added that websites were adopting varied techniques to boost traffic,
such as requiring new visitors to register on sites in order to collect
email address for direct marketing purposes.
