Thailand Digital Advertising Spend 2014 2015

DAAT - Digital Advertising Spend 2014

Introduction

Thailand is adopting digital technologies in a rapid pace. The penetration of smart phones keeps increasing, fuelled by ever more affordable models becoming available to the public. Penetration numbers differ, but various sources agree that it rose above 30% in 2014 and is heading towards the 50% mark in 2015.

Thai consumers are spending more and more time online. The global trend is that traditional television viewing is moving towards viewing video online, and we can expected this shift to emerge in Thailand also.

Digital advertising spending has been increasing over the past years and is likely to keep moving upward in coincidence with the increasing online activities of Thai consumers.

The need for industry data on digital advertising spending will become larger with the rise of the digital space. DAAT provides this data on a yearly bases. This report presents the data of 2014.

About DAATThe Digital Advertising Association of Thailand (DAAT) was founded in 2012 with the objective to benefit the industry, companies and consumers under the same direction. With collective support, advertisers should elevate the industry at the highest levels in the future.

To support this objective the Association has been collecting and publishing digital advertising spending data since 2013. The reports keep track of the growth of spending on digital advertising in Thailand and are a valuable source of information to anyone in the advertising industry who wants to better understand the role of digital channels in the advertising landscape.



Methodology

The data in this report and previous reports is collected directly from advertising and media agencies through a anonymous process to ensure confidentiality to client’s information. The information they submit is based on their internal records of advertising spending.

Data for previous reports was collected by DAAT. As the digital advertising industry is growing and maturing, DAAT recognized the need to have the process managed by an external party that is specialized in data collection and reporting.

This report is the first with data collected by international market research firm TNS. The company operates in more than 80 countries and is part of the WWP group.

TNS Thailand has collected and processed data from 20 agencies, and aggregated the data to reflect total level. The data is split by type of digital advertising and by industry sector of the advertised brand.

The agencies provided their data in an online survey.

DisciplinesAgencies have provided spending data on the following 9 digital advertising disciplines:

Display All types of banner ads

Search All paid suggestions in search engine results

Social Community websites

Creative Web/Production cost

Mobile All ads in mobile phone apps (except Facebook and Instant messaging apps)

Facebook Ad All ads on Facebook

Video Advertisements shown in videos

Instant messaging

Advertising in messaging apps; Line/ We Chat

Others E.g. sponsorship



Industry sectorsAgencies have provided data split by the following industry sectors of the advertised brands.

Group Category

Finance & banking

BanksInsuranceCredit/Debit CardsOther Finance

tech & electronic

Audio/Visual Electrical ProductsComputersCommunicationsOther Electrical Products (Non Audio/Visual)

Food & Beverage

Alcoholic BeveragesNon Alcoholic BeveragesSeasoning ProductsSnack FoodsSundriesDairy Products & Dairy Substitute Prod.Bakery & Chocolate/Wafers/BiscuitsDietary ProductsVitamins & Supplementary FoodsFoodstuffs

ShopsFood Outlets & RestaurantsRetail Shops/Stores

Education Educational Institutions

Personal care

Cosmetics / Skin-care preparationsPersonal AccessoriesToiletriesHair PreparationsOral Products

Household careHousehold CleanersHousehold Equipment & FurnishingsHousehold Insecticides & Pesticides

Automotive

Motor Vehicle AccessoriesMotor Vehicle Dealers & RentalsMotor VehiclesMotorcycles & BicyclesOil & LubricantsPetrolTyre

HousingReal EstateHouse Ads

Pharmaceuticals PharmaceuticalsPet products Pet Foods & Pet Products

Other

Photographic ProductsOffice/Business EquipmentTransportationTravel & ToursMulti Sections AdvertisingMedia & MarketingCD/DVD (Musical & Film Products)LeisureAgricultural ProductsBuilding Material & MachineryClassifiedGovernment & Community AnnouncementWebsites



Agencies

The audit was conducted in February and March 2014. Digital advertising spending data was submitted by 20 agencies.

List of agencies

1 Adapter Digital Co.,Ltd

2 Brilliant & Million Co.,Ltd

3 CJ WORX Co.,Ltd

4 Dentsu 360

5 Dentsu Young & Rubicam Ltd

6 Digital Groove Co.,Ltd

7 Flexmedia Co.,Ltd

8 Havas Worldwide Bangkok Ltd

9 IPG Mediabrands

10 iProspect (Thailand) Co.,Ltd

11 Isobar (Thailand) Co.,Ltd

12 J -Connect, J. Walter Thompson Bangkok Group

13 mInteraction Co.,Ltd

14 MCFIVA (Thailand) Co.,Ltd

15 Optimum Media Direction (Thailand) Co.,Ltd

16 Rabbit’s Tale Co.,Ltd

17 Starcom MediaVest Group

18 Syndacast Co.,Ltd

19 Winter Egency Co.,Ltd

20 Zenith Optimedia Co.,Ltd


Remark:Reported numbers are based on reported spending data of a sample of 20 agencies. DAAT estimates that the sample of agencies represents 80% of spending in the market. The numbers presented on this page are upgraded proportionally to reflect 100% of the market.

Spending

Agency Outlook

Industry Leaders Speak

DAAT - Digital Advertising Spend 2014 7


Total Spending

2012 2013 2014 FC-2015

+53%

+33%


+43.95%

The digital advertising market in Thailand continues to grow and is expected to grow further in 2015. Although growth levels are coming down there is a strong momentum. If the planned spending for 2015 is achieved, the total market will almost double from 2013.

Reported numbers are based on reported spending data of a sample of 20 agencies. DAAT estimates that the sample of agencies represents 80% of spending in the market. The numbers presented on this page are upgraded proportionally to reflect 100% of the market.

Spending in Million Baht


2014 Spending by industry

18.1%

14.2%

8.7%

5.3%4.7%4.5%3.7%

2.8%2.7%

2.7%2.4%2.3%2.2%1.9%1.8%

22.0%


The Communications sector is leading the way in online advertising spending, followed by Motor Vehicles. The beauty categories Skin Care Preparations and Hair Preparations are the leading FMCG categories on place 3 and 5. Banks claim the fourth spot.

DAAT - Digital Advertising Spend 2014DAAT - Digital Advertising Spend 2014

2014 Fastest growing industries

The highest spending sectors are also the sectors that increased the most in absolute spending. The increase from Oil & Lubricants is striking as it comes from a very low base level in 2013. In the ranking of growth by percentage Oil & Lubricants is followed by other categories that came from a very low base level.


2015 Forecast


2015 Spending by industry

18.4%

15.4%

8.8%

5.9%5.1%4.4%2.7%

2.5%2.3%

2.3%2.2%1.8%1.7%1.5%1.5%

23.5%


Planned spending for 2015 shows a similar ranking to 2014. Real Estate is an exception, dropping out of the top 15 with spending decreasing from 173 to 116 Million Baht.

DAAT - Digital Advertising Spend 2014DAAT - Digital Advertising Spend 2014

2015 Forecasting fastest growing industries

Communications is expected to be the highest growth industry sector in 2015, followed closely by Motor Vehicles. In the ranking of growth by percentage Pet Foods & Pet Products is followed by other categories that came from a low base level.


What’s hot in disciplines


Spending by discipline

41.0%28.1% 27.2%

20.2%

21.2% 19.7%

6.0%16.0% 16.5%

11.1% 14.0% 15.6%

12.2% 9.1% 9.7%

6.2% 5.6% 4.4%3.6% 4.5%

2013 2014 FC-2015

OthersMobileInstant MessagingSocialCreativeVideoFacebookSearchDisplay


Online displays is still the largest discipline in 2014, but it is less dominant then before. Facebook and Video advertising have grown in 2014. Facebook in particular saw strong growth in share of spending. Shares are expected to stabilize in 2015.


2011-2015 Spending by discipline

2011 2012 2013 2014 FC-2015

Display 48.1% 41.5% 41.0% 28.1% 27.2%

Search 14.7% 18.9% 20.2% 21.2% 19.7%

Facebook Not measured 5.3% 6.0% 16.0% 16.5%

Video Not measured 10.9% 11.1% 14.0% 15.6%

Creative production 25.5% 12.9% 12.2% 9.1% 9.7%

Social media 10.3% 6.7% 6.2% 5.6% 4.4%

Instant Messaging Not measured Not measured Not measured 3.6% 4.5%

Mobile marketing 0.8% 1.8% 1.9% 1.6% 1.2%

Others 0.7% 1.9% 1.6% 0.9% 1.1%

Total 100% 100% 100% 100% 100%



Spending by discipline 2014


Spending

Agency Outlook


5%

10% 10%

24%

19%

5%

29%

< -

50%

-50%

-40%

-30%

-20%

-10%

No

chan

ge

10%

20%

30%

40%

50%

>50

%

75%

75% of agencies expects to spend at least 30% more on digital advertising in 2015 than in 2014. Within agencies that do digital advertising, their digital spending is now higher than their TV spending.

Please indicate the percentage of change for digital advertising spend that you expect for your clients in 2015?

Agency outlook


14%

24%

33%

38%

62%

81%

86%

Other

CRM

E-commerce channel

PR

Sales

Engagement

Brand awareness

Building brand awareness and engagement are the top objectives of digital advertising, more than directly sales related objectives. Agencies change their client engagement models in different ways to adapt to a changing environment.

Which of the following best describes most of your clients’ objectives for digital ad spend?

10%

29% 33%

10%

43%14%

29%

57%

48%57%

38% 33%

Project basedRetainer basedEducation and trainingEmbedding specialized resources at client

More

Equal

Less

How has your engagement model with clients changed over the last year?



Spending

Agency Outlook


TNS interviewed a number of industry leaders to get their view and expectations of the digital marketing industry. Impressions of the interviews are included on the following pages.

The following persons have contributed their view:

� Khun Mike DeLosReyesManaging Director, Mediabrands. Digital at IPG Mediabrands

� Khun Norasit SitivechvichitDigital Business Director, Dentsu 360

� Khun Siwat ChawareewongCEO, mInteraction

� Khun Supaporn JangcharoenExecutive Digital Director, Zenith Optimedia

Industry leaders speak



Insights

“Key misunderstandings about digital- Digital communication is not cheap!- Creativity is not the only factor of a

successful online campaign”

“Digital as a Sale ChannelDigital marketing has transformed from ‘Communication tool’ to serve as ‘Distribution channel’.”


Insights

“Did you know?- You don’t have to be a graduate with

a degree in mass communication to join working in this industry”

“There is a shortage of digital know-howThere is a shortage of understanding and human resources in the area of digital and online marketing”


It won’t take too long for our digital spending to grow from 5% to 20%.

Khun Siwat ChawareewongCEO, mInteraction

At this moment budgets for digital marketing are not yet very large, but it has significantly increased from 7-8 years ago. I would approximate it to be 0.5% of total advertising budget at that time. Even though it will not be much larger than 5% now, that is about ten-fold increase.

Thailand is still behind other markets. Europe is 30+%, Australia 20+ and approaching 30%, China 20%, Malaysia 10%. So we should definitely see Thailand reaching 20% in the future but how fast or slow remains to be seen. Looking at China at 20% now, it won’t take too long for us to get from 5% to 20%.

“

“


Norasit SitivechvichitDigital Business Director, Dentsu 360

Last year was the wake-up call, this year, digital is the must

The digital industry is go for ‘full swing’ this year.

Some might say that digital marketing became very popular since the last year, but actually last year was just a wake-up call that those who are in traditional media need to be aware of.

“

“


It is not true that digital campaigns are cheaper than traditional ones.

Khun Mike DeLosReyesManaging Director, Mediabrands.Digital at IPG Mediabrands

Cheap is not a reason for this market, but others

Clients ask why they have to spend the same amount on digital media?

The answer is to ensure the same effectiveness of the campaign.

Digital can create more awareness and more buzz than the traditional media, but clients need to spend enough budget to make this happen “

“

$$$


As technology changes, you don’t have to be a graduate with a degree in mass communication to join working in this industry.

The required skill set has broadened

As technology changes, you don’t have to be a graduate with a degree in mass communication.

Certain skills may require people with a background in social science, economics, finance or even engineering.

With digital/online marketing, it is no longer a matter of marketing communication but a whole value chain that requires deeper analysis. It is not only about ‘click to’ or about ‘budget spending’ but about consumers’ actions, about value to our customer’s organization and how things turn into sales. “

“

Khun Supaporn JangcharoenExecutive Digital Director, Zenith Optimedia


7 Key Interesting Findings


Full report

� Crossed spending data by industry/discipline

� Forecast 2015 by industry/discipline

� Agency outlook , agency point of view survey

� Inside interview from industry leaders

� Inside by industry ,analyze spending by each industry

� Crossed spending data in Excel

Find out more


Full report

Report price

PDF + Excel = 499 USD100 USD discount for DAAT members

Available at http://www.tnsglobal.com/thailand-digital-ad-spend-report

Thailand Digital Advertising Spend 2014 2015

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