Southeast Asia is home to approximately 650 million people and has a digital economy that is forecast to triple in size, reaching $240 billion over the next seven years, according to Google’s third e-Conomy SEA report. The growing mobile and internet penetration has resulted in a significant increase in online advertising, or digital marketing spend in Southeast Asia, specifically in Singapore, Indonesia, Thailand, Philippines, Malaysia, and Vietnam.
As per the Digital in 2017: Southeast Asia report, jointly released by We Are Social and Hootsuite, digital indicators, such as the percentage of active social media users (47%), mobile subscriptions (133%) and active mobile social users (42%) continued on an upswing. Meanwhile, internet usage over the past year grew by over 30%, primarily driven by mobile internet usage alone.
Interactive Advertising Bureau Singapore (IAB Singapore) released a digital marketing spend forecast for Southeast Asia. The data shows double-digit growth in the region in 2017 and it doubles each year, as more consumers are using mobile, video, and social media, which drives up digital marketing spend among SMEs (small- and medium-sized enterprises) and top corporations advertising their brands, products, and services.
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Southeast Asia has 350 million internet users across its six largest countries, which is more than the entire U.S. population.
Breaking it down further, Deloitte’s Global Mobile Consumer Survey (the Southeast Asia edition) informs us that the use of mobile applications has increased significantly across the region. However, the application spectrum across these regions is diverse. For example, in Indonesia, Malaysia and the Philippines, social networking applications rule, whereas, customers in Singapore and Thailand turn to messaging and gaming respectively. Customers in this region also utilise voice-assistant applications for lifestyle and information updates, such as weather, sports, navigation or travel assistance.
Naturally, in conjunction with the growth of internet use, companies, realising the potential for digital advertising, are increasing their spend in this area in a bid to reach more consumers. This hike in digital ad spend has placed Southeast Asia as the fastest growing regional market in the world. With the market expected to expand by 13.93%, reaching $15.35 billion in 2026, according to a report by Research and Markets, we look at why digital advertising in this corner of the world is growing so fast.
The mobile impact
Mobile technology has become less expensive, while phones and data speeds have improved. These factors have made phones much more accessible and useful, even in remote areas of the region. Until recently, having a smartphone in the wilds of Borneo may not have made sense, but now, thanks to better mobile internet coverage, even isolated parts of Southeast Asia have access to the world wide web.
This increase of mobile penetration has opened up new markets for digital advertising and companies are taking full advantage of the opportunity.
Gone are the days when you could only watch what the TV channels wanted you to watch, when they wanted you to watch it. Now, thanks to streaming services such as Netflix and Amazon Prime, amongst others, you can pretty much watch anything you like, at any time you want.
Add in the fact that most broadcasting companies now have their own streaming capabilities, and the trend shifts to the majority of people getting their fix of entertainment on an ad hoc basis. This new way of watching programmes has led to advertisers having to adjust the way they get their messages out to the masses, and the companies of Southeast Asia are no different.
The birth of native streaming platforms, or Video on Demand (VOD) such as iFlix, HOOQ, and Viu, has released users from the captivity of their sofas, allowing them to catch up on their favourite drama or comedy on the go.
Similarly, music streaming has become the natural place to go when you want to dance or relax to some tunes. As all of these are available online, the advertisers have followed.
Humans are generally social creatures by nature who crave contact with others. The social media boom continues apace in the region with Singapore, Malaysia and Thailand all in the top 10 of global usage. These three markets are driving the market forward, with between 74% (Thailand) and 79% (Singapore) of their populations using social networks.
We have all heard about the rumoured global drop off in Facebook users, yet there is little evidence to support this claim. It is still the top platform for people to engage on and advertisers are capitalising on this. They are spending their money here, rather than in old school media.
According to forecasting analysts, the developing economies in Southeast Asia are expected to become Asia’s next top ranking digital marketing markets due to the growing number of mobile users, growing demand in internet access, and declining data prices.
Ecommerce will be a key driver among these Southeast Asian countries in the next few years as investments from global giants are seeing the number of online shoppers dramatically increasing every month.
Emerging mobile app trends in Southeast Asia
Ecommerce business owners are spending millions of dollars for digital marketing campaigns, in the form of content marketing, email marketing, social media marketing, social video marketing, online reputation management, PPC, SEO, and other forms of internet marketing.
Investing in the future
With the internet economy on course to be worth more than $200 billion USD by 2025, many of Southeast Asia’s countries have opened their eyes to the changing business and industry landscape and are investing in digital economies. Governments, banks, businesses and entrepreneurs are all pumping money into this market sector as they can see that this is where the future lies. Some countries see it as a way of levelling the playing field for all their inhabitants. Previously, accessing information or completing simple tasks such as banking, were difficult to do in some of the more rural parts of the region. Now, since the dawn of the digital age, access to information, services and even goods are less restricted.
By hopping on board the technology train, governments, large companies and even SMEs are securing the future for the region.
The sheer size of the area and its whopping 650 million inhabitants helps to place the region at the forefront of the new digital market. Having so many potential customers who are already online makes spending your digital advertising budget here a no-brainer. As the region becomes more developed and spending power increases, Southeast Asia is like an orchard full of almost ripe apples, perfect for plucking.