Did you know that online video advertising generated 40% more revenue than TV advertising in APAC? The same goes for Southeast Asia, which is seeing strong growth as well. This means that slowly, but surely, ad spend is surpassing TV advertising revenue. In fact, online video advertising in APAC further enlarged the gap and generated $66.8bn in 2021, as compared to $40.3bn from traditional TV advertising revenue.
Despite the slight decline in 2020 owing to the global pandemic, the online advertising industry has shown positive signals of recovery, bouncing back from 2021. APAC continues to show the fastest growth rate of Subscription Video on Demand (SVoD) and is forecasted to grow over 40% of the global SVoD subscription base by 2026. CTV has also become a hot advertising platform that is picking up speed.
To find out more about this, we spoke to Alexandra Lowes, VP Client Engagement & Growth, APAC, Finecast. They are leading addressable TV company which enables advertisers to personalise TV ads across on-demand, linear and live streaming environments.
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Consumers thrive on the convenience, range of options and quality that streaming adds to their overall TV experience. Countries such as Indonesia, Malaysia and the Philippines have some of the highest number of smartphone owners who stream on their devices, contributing to the 70% of people in APAC who stream content online
Could you give an overview of the online video advertising scene in Southeast Asia?
OTT advertising spending is on an upward trajectory in Southeast Asia. The rise of premium broadcast quality online video is driven by shifting consumer behaviour and video consumption habits.
Based on research from GroupM’s Consumer Eye 2022 report, across APAC, consumers are now spending more time watching paid video streaming services over traditional linear TV. In the Philippines watching paid streaming services is the number one entertainment channel, however other markets like Malaysia and Indonesia have a balance towards both paid and free video entertainment.
Household names essentially contribute to the success of streaming services but from a local perspective, there has been consistent growth for companies such as Viu and iQIYI. According to research conducted by Conviva, one streaming trend that seems steady across the globe, is the domination of big screens, which is growing even more rapidly in Asia, with the share of viewing time on the big screen as compared to other screens rising significantly from 27% in Q4 2021 to 43% in Q1 2022.
Can you share how online video advertising has evolved since the early days of unskippable YouTube ads?
The digital video ecosystem has undergone major shifts in the past years. Innovation accelerated in the region and globally and digital transformation is being replicated within the traditional TV space. For brands, advertisers and marketers who invest heavily in this space, this is an exciting time. Specifically in the following areas:
- Shoppable ads – QR codes on broadcast inventory with specific call to actions
- Addressable creative – Many are familiar with addressable creative within the digital ecosystem across digital video products, but now opportunities are starting to develop on the big screen.
Many brands get excited about addressable opportunities that sit within the home of one of media’s most loved channels – TV. Premium broadcast inventory combined with amazing creative and targeting opportunities move advertisers to a new era of TV planning and buying that has evolved from the early days of video ads. One to one targeting is still hugely popular, but many brands will continue to prepare themselves for a time when this targeting is less relevant.
Digital identity is an area of interest as innovation and emergent technologies dawn our space. It can be argued that the changes in digital identity are not impacting the addressable TV space – for instance, cookies are not used as identifiers on connected TVs, therefore their disappearance should not essentially have any direct impact. While changes in cookies policies may not impact addressable TV directly, other factors such as stricter privacy and identity protection are being considered across the entire advertising marketplace, and within addressable TV.
When it comes to TV, personalisation does not need to be looked at as a one-to-one arrangement as we would on a mobile device or laptop, but instead should cater to the entire household in a non-intrusive manner. Capabilities around dynamic creative optimisation can be used in the most subtle manner for advertisers to activate their campaigns based on location-based audience insights.
Which markets in Southeast Asia have the most potential in the industry and why?
The Southeast Asian region is innovating at rapid speed, there is not one market that isn’t increasing in opportunities for both consumers and advertisers. Two markets of particular interest include:
Indonesia will continue to change and develop at a rapid speed as the country witnesses an increase in mobile device users and high speed internet. As the final market to switch off analog within the next year, this means that digital opportunities will continue to thrive and grow within the video and OTT ecosystem.
Malaysia has undergone a shift in opportunities this year as Astro, the largest TV network launched their new addressable advertising services, the first of its kind across the SEA region. It is the next-level TV advertising that merges emotional persuasive power with first-party data to create new opportunities for advertisers and marketers to create personalised TV experiences. The digital transformation of businesses like Astro have the ability to change the market and this can not be underestimated.
With the growing recession do you foresee this continued growth?
There is no doubt that globally there are signals that indicate growth will slow, however across the APAC region we expect to see continued demand driven by factors such as lower pricing strategies, available content and increased opportunities from broadcasters.
The slowdown in China has an outsized impact across the broader APAC region. If we exclude China from mid-year GroupM data, we see that broadly across APAC advertising growth will increase from the forecasted 8.1% to 9%.
The research also anticipates that media companies who are solely focused on modest incremental investments for traditional and streaming services in years ahead are bound to lose meaningful viewing shares and diminish in importance over time unless they make more significant efforts. It is significant to see from recent Ampere Analysis data that the top content commissioners across the APAC region are iQiyi (350+ shows) and Tencent (250+ shows) as this demonstrates that investment in content will continue to drive viewership.
What’s next for Finecast?
Finecast will continue to focus on innovating TV advertising, providing greater accountability through enhanced measurement and analytics, redefining reach to enable new scaled quality video opportunities for brands and new commercial propositions which will continue to grow the TV ecosystem. As a business, creativity is in our DNA and we are always looking for ways to supercharge solutions and smarter advertising through the combination of commerce and creative which will improve and evolve the consumer experience.
We will continue to pioneer and grow our global footprint bringing addressable TV to markets where these capabilities do not yet exist. In the APAC region we have recently launched businesses in Japan and Malaysia – bringing our regional footprint to a total of eight markets.
Our people are the heartbeat of our business. We will continue to develop our talent around the globe to ensure that we build teams that bring both experience and passion to our industry to innovate and build the future of TV.