Traditional media’s loss is digital’s gain | Bilyonaryo Business News
Magazine

Traditional media’s loss is digital’s gain

Internet advertising is one of few media exhibiting double-digit positive growth in investments 

By CHERIE MIJARES 

The quarantine lifestyle that started last year caused drastic changes in consumer behavior that have forced marketing practitioners to step back and rethink their well-planned advertising strategies and media investments to adapt to emerging opportunities in the new environment. 

For one, the impact of COVID-19 in 2020 saw a surge in both new and habitual online shoppers that led to spikes in online sales, with consumers working from home, watching more television, or starting new small online businesses
and hobbies, and children attending school virtually. 

As observed by social networking site Facebook, the past months of lockdown saw consumption habits becoming more digital and home-centric not only in the Philippines but in the rest of South-east Asia as well, as people remained reluctant to leave their homes. Up to 77 percent across the region are now preparing food at home more often, while at least 65 percent are watching more on-demand and broadcast TV. 

This has also led to an increase in e-commerce as cited by a chief strategic officer of Lazada in Facebook’s 2020 yearend report, who said the inflow of new online sellers more than doubled across categories. “E-commerce is not just limited to young adults anymore, with those in their 40s and 50s saying they’re now more willing to shop online,” he said. 

The increase in digital audience and activity—that is, more sellers selling and more buyers shopping online, and more viewers seeking more entertainment and information online—became the signal for marketing strategists to allocate more budgets to digital advertising. 

As early as December 2019, analysts had predicted a slowdown in global advertising growth, with declines seen in traditional media such as television and radio, while continued growth would be evident in digital advertising. This prediction became real with the pandemic shutdowns that happened worldwide a year later. 

A dossier by online research and information portal Statista reports that ad spending in the Philippine digital advertising market is projected to reach US$671 million in 2021, with search advertising being the market’s largest segment with a projected market volume of US$326 million in 2021. 

Reflective of digital advertising’s vibrant performance, Facebook alone posted a 21 percent increase in ad revenues, garnering US$84.17 billion in 2020 over US$69.65 billion in 2019, as shown in its 2020 yearend report.
On the other hand, Statista notes that in its most recently reported fiscal year, Google’s revenue amount- ed to US$181.69 billion. Google’s revenue is largely made up by advertising revenue, which amounted to US$146.9 billion in 2020. 

A Statista report published last January also states that until the coronavirus put a halt on many industries in 2020, advertising spend- ing worldwide had been increasing steadily. It is expected to grow steadily again starting in 2021 and surpass US$630 billion
in 2024. Among the regions, North America invests the most in advertising, followed by Asia and Western Europe with Middle East and Africa as well as Central and Eastern Europe spending the least but posting the highest growth. 

In a March 2021 dossier, Statista reports that advertising expenditure has sky-rocketed across the Asia Pacific region throughout the past decade. The region experienced an increase in advertising spending from just under US$111 billion in 2010, to just over US$196 billion by 2019. 

Most recent data by Statista names Amazon as the largest global advertiser in 2019. The e-commerce giant spent US$11 billion on promoting its products worldwide in 2019. This position was held for the longest time by Procter & Gamble (P&G), which this year was dethroned because of its lower US$10.7 billion in global ad expenditures. L’Oreal, Unilever, and Samsung complete the list of top five advertisers in 2019.

Philippine media ad scene 

In the Philippines, Kantar Media Managing Director Jay Bautista confirmed that for traditional media, overall advertising spending from January to September 2020 reached Php447 billion, with Php313 billion going to TV, Php132 billion to radio, and Php2 billion to print. He named the top advertisers on TV and radio, in no particular order, as P & G, Unilever, Nestle, Unilab, ACS, and Wyeth. Top advertisers on print are mostly automotive brands like Toyota, Mitsubishi, Morris Garages, and Suzuki, he said. 

He disclosed that ABS-CBN loses about Php15 billion monthly since its shutdown in May last year. Both GMA and TV5 had massive increases in ad revenues just a month after the shutdown, with GMA gaining 175 percent increase in spends, 178 percent in placements, and 171 percent in ad minutes. On the other hand, TV5 gained a 150 percent increase in ad revenue, 238 percent in placements, and 104 percent in minutes. 

A month after the shutdown, GMA took the lion’s share among FTA (free-to-air) channels with a 64 percent revenue in- crease, while TV5 followed with 49 percent. These were for the periods April 1 to May 5 vs. May 6 to June 30. 

Statista states the generally observed trend is that internet ad spend has already overtaken other media, leaving even TV advertising behind. According to market projections, internet will continue to command larger shares of investments, a trend which will be reinforced by the coronavirus pandemic repercussions. 

Media outlook in 2021 

Bautista said ad budget allocations are expected to bounce back in 2021, especially since quarantine restrictions were more relaxed last year until recently. The third quarter of 2020 saw growth among ad spends and placements, with TV and radio being the go-to platforms for wide audience reach even as digital advertising continues to outgrow traditional media. 

“Historically, advertisers, media planners, and buyers have always kept in touch with their target markets to ensure that any shift in behavior, any shift in media usage will be reflected in their marketing communication strategies and executions. 

Now, that we see how the pandemic has disrupted the way consumers use media then we can definitely expect a steady and increasing shift in advertising investment to where the audience is or will be. But regardless of changes in the media landscape whether due to technology, a pandemic or any other development, we need to remember that ‘content will always be king’ and that is where you will find your target mar- ket,” he concluded. 

Statista affirms that as digital is driving the future, internet advertising is one of few media exhibiting double-digit positive growth in investments. In 2021, internet ad spend will grow by some 15 percent. Out- door and cinema advertising are projected to also experience a significant growth that year while print media will see negative growth in investments and are expected to do so in the foreseeable future. Sadly, all media experienced a decline in 2020 due to the coronavirus outbreak. However, each one of them, with the exception of mag- azines, is expected to be back to positive growth starting in 2021. 

With the shifts in the ages and demo- graphics of TV viewership and digital users and consumers, marketers should realize the pandemic calls for more balanced media plans that will cater not only to millennials or Gen Zers but also to audience segments beyond 40, baby boomers, and even ones’ grandparents who are discovering the digital world while also staying tuned to traditional media. They need to know how to effectively allocate media investments to ensure they are fulfilling their awareness, reach, and ROI goals in this volatile new business environment. 

 
0 0 votes
Article Rating
Subscribe
Notify of
guest

This site uses Akismet to reduce spam. Learn how your comment data is processed.

0 Comments
Inline Feedbacks
View all comments
0
Would love your thoughts, please comment.x
()
x