A Singapore CEO recently demanded an explanation from a senior marketing executive. The corporate leader was upset and concerned about the effectiveness of the company’s ad spend in the city. In short it seemed to be going down a black hole.
“I used to see our brand's billboards while driving to the office or leafing through the paper,” he argued. In the past he saw company ads several times over, even before finishing his morning coffee—and felt good about. But no longer. They just didn’t seem to be getting the reach any more. “Where is all the spend going?”
The marketing executive was quick. “You’re not seeing our ads any more?” she said. “Good. Money spent advertising to you is money wasted. We’re using digital marketing now to target who we want to reach. You’re not our target audience. You’re too old, too male and you’re not fashionable enough”.
She won the argument in this apocryphal tale. But the same argument is being lost across Singapore. Marketers are still running largely with traditional methods even though the populace has moved on. For example, out of the total advertising “pie”, newspapers represent 35 per cent of spend in Singapore versus an estimated 20 per cent in China, 18 per cent in Hong Kong and only 10 per cent in the UK, according to PwC’s research.
This is, perhaps, surprising for an economy prized for its innovation and its tech-savvy society. Singapore boasts a nationwide fast-broadband network and has recently overtaken Japan and South Korea to have the highest smartphone penetration in the world. Yet online advertising is yet to take off. To understand this better, PwC conducted a study in 2014, interviewing over 30 top marketing and media-agency executives in Singapore to better assess digital marketing efforts and inhibitors.
PwC estimates online advertising represents just 15 per cent of total ad spend in Singapore. This is far below advanced country benchmarks: most notably, online advertising has become the largest medium in the UK (overtaking TV) at over 40 per cent of total spend. At 15 per cent, Singapore online advertising penetration is half the level of the US and Japan.
Marketing dollars have not been following the eyeballs. Consumer adoption of digital media has been rapid in Singapore. As any journey on public transport will quickly prove, Singaporeans are now using their phones to consume news, videos and games. We estimate that only 10 per cent of Singaporeans' daily "media time" is spent reading print newspapers. However, print represents a disproportionate share of advertising dollars (>40 per cent). Conversely, the internet (whether on a PC, smartphone or tablet) represents 39 per cent of media time but only 15 per cent of ad spend. This highlights the opportunity for advertisers, as well as PR practitioners, to better follow the eyeballs—and this is even before the wider benefits of more focused targeting and data capture.
Why is this? What is changing? And what opportunities does this provide for advertisers and brands looking to reach consumers via content? PwC recently conducted a survey to diagnose why Singapore advertisers have not been doing more with digital. Four main themes jump out.
The first is the problem of mindset shift, acutely felt by the marketing executive from the story above. Digital marketing requires a fundamental change in mindset and willingness to learn. CEOs used to seeing traditional broadcast media need to understand that their target audiences are increasingly spending time and embracing brands online.
The second, related to this, is the problem of measurement. Digital should in principle be a panacea for those who like to measure. Online advertising can generate a wealth of data on click-through, likes and hits. This can be a double-edged sword. For all but the most sophisticated online advertiser, marketers struggle to filter these spreadsheets into a “killer business metric”, making it difficult for senior management to interpret. Looking at GRPs (gross rating points) for traditional media is, of course, far from perfect—but it’s what we’ve got, and we’ve become familiar with this for many decades. But who knows the value of a new Like to your brand?
For example, if the objective of a digital marketing campaign is revenue growth, consider the digital levers that affect total revenue, revenue per customer, revenue per visit, or purchase intent for non-ecommerce tasks (such as downloading a brochure). If the objective is more relating to cost savings, measure the proportion of basic tasks conducted online versus offline and quantify the impact of the associated productivity gains. If customer satisfaction is the target, think about how to measure advocacy ratings or frame a net-promoter score.
Third is the recruitment challenge. While access to talent is not an isolated complaint of the marketing and communications industry, there is a particular shortage in the case of online advertising as a relatively new profession. The heady combination of creative and analytical skills it demands is rare to come by and expensive to recruit.
Fourthly and finally, it is simply too 'cozy' to default to traditional media. Contrast the consolidated newspaper industry in Singapore with the fragmentation and complexity in Hong Kong. Traditional media provides ability to achieve courage for adventure.
Things are changing, however. While 15 per cent online advertising spend is low compared to the most digitally advanced countries, it has been increasing at a rapid pace. Will this rate of change continue? We believe it will, and this presents opportunities for the industry.
When executed well, the benefits of online marketing are well known in terms of ability to target, trial and track. Competitive pressures and mandates from overseas-headquartered companies are forcing marketing teams to more fully embrace digital in Singapore. Media agencies are also making it easier for their clients to navigate the challenges of online media.
Knowing which KPIs to track is the first important step. One way to do this is to start with your key business objectives and understand the digital levers associated with each one. This will help prioritise the metrics that matter, whether it’s sales revenue, cost savings or customer satisfaction. It brings your digital strategy into the heart of the business—rather than an add-on because you think you should have one. This can then be published into a simple executive dashboard to help senior management keep track of progress.
Since most companies are not doing it as well as they could, smarter digital marketing could be a key source of competitive advantage for businesses (and media agencies) in Singapore today. Now is the time to embrace this growing trend and engage the digital audience.
Greg Unsworth is technology, media and telecommunications leader and Oliver Wilkinson is director at PwC Singapore