MEDIA SCENE
OVERVIEW
UM Malaysia predicts the shape of
advertising for 2015 and identifies
trends that will define the year.
MEDIA SCENE
OVERVIEW
By
MEDIA
SCENE
OVERVIEW
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 2014. This would result
in Malaysia’s adex for 2015 rising to RM9.80billion compared to
RM9.18 billion in 2014.
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
2015. 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 2015. Programmatic will continue to
complement video inventory platforms by providing competitive
Cost per Completed Views.
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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 2014.
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
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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 2015. 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
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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%
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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.
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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
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