5th Annual Asia-Pacific Digital Marketing Survey

2008

Supporting Organisations

Introduction and Objectives

• The objectives of this research are to understand the following:– Budget allocation to digital marketing and year-on-year trends– Barriers to allocating more budget to digital marketing– Expected impact of current financial crisis on digital marketing budgets– Perceived importance and actual usage of selected digital marketing strategies– Corporate blogging and perceived communications' effectiveness– Integration of online and offline communications– Most popular purchasing variations for online ad campaigns

• As a result of rapid changes in digital marketing, this survey includes several changes to the questions from previous years. Where questions remained comparable across the waves, trends have been highlighted in the report

• Aha! Research conducted the research

2

Survey Methodology

• Sample definition: Individuals with an interest in marketing activities in Asia Pacific• The sampling frame is all individuals listed in the databases of ADMA and the selected co-sanctioning

organisations• Email invitations containing the online survey link were sent out by Aha! Research to individuals listed in

the ADMA’s database. Each co-sanctioning organisation (MMA, HKDMA, HKiM, VMA, DMAS) sent out invitations to individuals listed in their databases. The initial invites were followed up by a reminder email

• The survey language was English and consisted of 16 questions which took, on average, 10 minutes to complete

• Fieldwork was conducted during November and December of 2008• A total of 345 usable surveys were collected• Respondent profile:

– Business Sector: Agencies (40%), Advertisers (40%), Media Owners (19%), Others (1%)– Function: Marketing (46%), Management (28%), Business development (12%), Advertising (8%), Other (6%)– Company size: Small, (32%), Medium (27%), Large (41%)– Industries: Advertisers – broad range of industries– Residence – sample is highly skewed towards Singapore and Hong Kong which reflects the home base of regional offices

• Note that the sampling unit is “individuals” and not “corporations” which is important when interpreting “usage” questions (some corporations may have multiple individuals who completed the survey)

3

Executive Summary

4

• Budget allocation to digital marketing continues to grow and only 5% of respondents reported not having allocated any budget to digital marketing in 2007. This may further shrink as 64% of all respondents increased their digital budgets in 2008 compared with 2007. Furthermore, 58% expect to spend more on digital marketing in 2009 as a direct result of the current global financial crisis

• Advertiser’s budgets are increasing: Well over half of respondents employed by advertisers increased their digital budgets in 2008 compared with 2007 and only 17% expect a decrease in their digital marketing budgets in 2009 as a direct result of the financial crisis

• Among the barriers to increase spending on digital marketing are lack of experience and understanding of the usage and benefits as well as claims that it is not part of the corporate culture

• Digital strategies deemed of greatest importance for 2009 are “informative / interactive corporate websites”, “search engine optimisation”, and “behavioural targeting”

• “Corporate website”, “email campaigns” and “e-newsletters” are still the most widely used digital strategies• Among the most promising digital strategies currently being less utilised are “online games”, “widgets &

gadgets”, “text message promotions”, and “mobile device advertising”• Corporate blogging is growing. Currently 28% of respondents are maintaining a blog and a quarter of

those without blogs are planning to launch in 2009. Reasons given for the popularity of blogs are: effectiveness in consumer feedback; public relations; and opinion seeding

• Units of ad effectiveness measurement: PPC (Pay per Click) / CPC (Cost per Click) and CPM (Cost per Thousand) remain the most commonly used

Table of Contents

• 2007 Marketing Budget Allocated to Digital Marketing• Digital Marketing Budget Allocation - 2008 vs 2007• Effect of Financial Crisis on 2009 Digital Marketing Budget• Reasons for Low Spending on Digital Marketing• Digital Campaigns: Importance to marketers• Digital Campaigns: 2008 Usage• Digital Campaigns: Importance vs Usage• Mobile Marketing Strategy• Online Game Strategy• Corporate Blogging• Communications Integration• Online Ad Campaigns Measurement• Respondent Profile:

– Business Sector & Employment Level– Company Size & Marketing/Ad Spend– Place of Current Residence

NOTE: Where applicable, a significant difference at the 95% confidence level (p<0.05) has been indicated by *. This signifies that the difference is not likely due to chance, but that in 1 out of 20 times the results may not be the same due to sheer randomness.

5

2007 Marketing Budget Allocated to Digital Marketing

• 95% of respondents allocated at least some budget to digital marketing (compared with 87% in the 2006 survey, and 77% in 2004)

• More than a quarter (28%) of respondents allocated less than 5% of their total marketing budget to digital marketing

• 13% allocated more than half of their total budget to digital marketing

• Among advertisers, almost a third (31%) allocated less than 5% while 9% allocated more than 50%

• Small firms (<50 employees) are more likely to allocate a significantly* larger proportion to digital marketing than larger firms

6

Q1: Approximately what percentage of your total marketing budget was spent on digital marketing in 2007? (n=345) * p<0.05

Digital Marketing Budget Allocation – 2008 vs 2007

7

Q2: How does your digital marketing budget this year (2008) compare to last year? (n=345)

• Digital marketing budgets are increasing with 64% reporting higher budgets in 2008 compared with 2007

• Only 7% had a decline in their 2008 budgets compared with 2007

• Respondents who expect that the current financial crisis will lower their digital marketing spending in 2009, also spent less in 2008 than in 2007

• 59% of advertisers increased their digital marketing budgets in 2008 while only 10% decreased

Impact of Financial Crisis on 2009 Digital Marketing Budgets

8

Q3b: How do you expect the current global financial crisis may impact your digital marketing budget for 2009? (n=345)

• The current global financial crisis is expected to have an overall positive effect on digital marketing budget size. Only 13% expect a decrease in spend during 2009 as a direct result of the financial crisis

• Where budgets were higher in 2008 than in 2007, more will also be spent in 2009 by 71% of these respondents. Where spending was lower in 2008 vs 2007, only 34% will spend more in 2009

• Among advertisers, 17% expect a decrease in their digital marketing budgets in 2009

• Neither company size nor location seem to have a significant* effect on changes in budgets as a result of the financial crisis

* p<0.05

Reasons for Low Spending on Digital Marketing

9

Q3a: To what extent do you agree, or disagree, with each of the following statements as reasons for why your company spent none, or less than 10%, of your total marketing budget on digital marketing (n=68 - low spenders (<10% in 2007) and did not increase their budgets during 2008)

Top 2 Box – Agree Strongly + Agree Somewhat

• 20% of respondents are low spenders (<10% of total budget allocated to digital in 2007) and also did not increase their budgets during 2008

• Main reasons for low spending are a lack of experience and understanding of the usage and benefits of digital marketing

• Barriers among advertisers are particularly a “lack of corporate culture” and lack of understanding of how to best use and appreciate the benefits of digital marketing

• Those who plan to spend less as a result of the financial crisis, are significantly* more concerned about “not reaching their target audience"

* p<0.05

Digital Campaigns: Importance to Marketers

10

Q4: How important do you think each of the following digital marketing strategies or campaigns will be for marketers over the next 12 months? (n=345)

Top 2 Box – Agree Strongly + Agree Somewhat

• Among the most important digital marketing strategies for 2009 are good corporate websites, search engines and two-way user communications (newsletters, emails campaigns, and online research).

• While evaluation of most strategies were fairly unanimous (particularly for “corporate websites” and “online research”), the following generated highly diverse opinions of their importance:• Online games• Viral campaigns• Mobile device advertising• Text message promotions• Widgets & gadgets• Video sharing

11

Q5: In terms of time, effort and money, to what extent are each of the following digital marketing campaigns part of your strategy for 2008? (n=345)

Digital Campaigns: 2008 Usage

Top 2 Box – Extremely important+ Somewhat important

• In terms of actual usage during 2008, good corporate websites and email campaigns ranked the highest

• Smaller companies are significantly* heavier users of “viral campaigns”, “blogs” and “email campaigns”

• Online game usage is significantly* higher in Hong Kong compared with Singapore based respondents

* p<0.05

Importance vs Usage ofDigital Marketing Strategies

12

Importance to marketers in next 12 months HIGH

HIGH

LOW

LOW

Current usageof digitalmarketingstrategy

corporate website

banner ads

e-newsletters

search engine advertising

search engine optimisation

rich media advertising

viral campaigns

behavioural targeting

online research

corporate/brand bloggingsocial network advertising

consumer generated advertising

video sharing

podcasting/webinars

mobile device advertising

text message promotions

email campaigns

widgets & gadgets

online games

DEVELOPING STRATEGIES MIDWAY STRATEGIES

MAINSTREAM STRATEGIES

MATURE STRATEGIES

NoteChart indicates

relative positionsbut is not to scale

Mobile Marketing

13

Q6: Which of the following is part of your mobile marketing strategy? (n=223)

• 65% of respondents used text message promotions and other forms of mobile marketing during 2008

• Most popular mobile strategies are “mass SMS alerts” and profile/location based SMS alerts

• SMS mass alerts seems to be less dominating in 2008 compared with the 2007 survey findings

Online Games

14

Q7: Which of the following is part of your online game strategy? (n=155)

• 45% of respondents used online games as part of their digital marketing strategy during 2008

• Most popular strategies are “sponsored games on websites” and “commissioned branded games”

• The previous survey (2007) found that “commissioned branded game to be created” was the most popular back in 2007

Corporate Blogging

15

Q8a: Does your company currently maintain a corporate blog? (n=345)Q8b: IF NOT: Does your company have plans to launch a corporate blog in the next 12 months? (n=233)

• The majority of respondents (68%) reported that their company does not currently have a “corporate blog” and among these, only 25% are confident that they have plans to launch their blog in 2009

• The higher the digital marketing budget, the more likely a corporate blog exists

• Agencies and Media owners are more likely to have a corporate blog than advertisers. Only 19% of the 138 advertiser respondents have a corporate blog, but a quarter of these plan to launch their blog in 2009

Corporate Blogging

16

Q9: Corporate blogging, as well as personal bloggers blogging about corporations, their brands and products, are becoming increasingly important to marketers. Consumers are also starting to generate their own videos about corporations and brands. To what extent do you agree, or disagree, with each of the following statements? (n=345)

Top 2 Box – Agree Strongly + Agree Somewhat

• While not regarded as vital to maintain a corporate blog, respondents highly agree that blogs are effective for “consumer feedback”, “public relations”, “opinion seeding” and “brand monitoring”

• Advertisers (70%) are most in agreement with the importance of “consumer generated advertising” while media owners are the least (57%)

Communications Integration

17

Q10: Which statement best describes the integration of your online and offline communication functions by external agencies? (n=345)

• Almost half (45%) of the total respondents use several agencies and vendors for their offline and online communications functions

• Usage of several agencies is employed by 55% of advertiser respondents, 52% of media owners, and only 31% of agencies. Agencies (52%) prefer the same agency/ vendor for both online and offline functions

• Size of marketing budget doesn’t seem to have an effect on the communications integration

Online Ad Campaign Measurement

18

Q11: To what extent do you use each of the following types of purchasing variations for your online ad campaigns? (n=345)

Top 2 Box – Always + Very often

• Most respondents prefer to use PPC/CPC and/or CPM in the purchasing of their online ad campaigns

• Larger companies and larger marketing budgets are significantly* more in favour of PPC/CPC

• Media owners are significantly* more than agencies and advertisers in favour of using CPM

• Those planning to spent more on digital marketing in 2009 are significantly* more in favour of CPM and CPL

* p<0.05

Respondent Profile: Business Sector & Employment Level

19

Q12a: In which business sector do you work? (n=345) Q13: Which one of the following roles best describes your current position? (n=345)

20

Q14: Approximately how many full-time employees are currently employed by your company in Asia Pacific (excluding Japan)? (n=345)

Q15: What was your company’s total annual marketing and advertising spend in Asia Pacific (excluding Japan) last year? (n=345)

Respondent Profile: Company Size & Marketing / Ad Spend

21

Q16: In which location are you currently based? (n=345)

Respondent Profile: Place of Current Residence

5th Annual Asia-Pacific Digital Marketing Survey – 2008

Many thanks to our supporting organisations

Questions about this report? Contact:Kay Bayliss, ADMA - director@asiadma.com

Peter Steyn, Aha! Research - peter.steyn@aharesearch.com