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Research shows: In bad economy people prefer to use online

In a time of inadequate financial situations and shrinking advertising budgets, on-line marketing is more and more becoming favored more than conventional marketing types in Singapore, based on a Frost & Sullivan study.

The report Singapore On-line Marketing Market found out that on-line marketing is becoming recognised for its ability to achieve precise targeting, measurable ROI and its cost-effectiveness. As today’s youths are becoming hooked onto the Internet, advertisers and media agencies alike are cashing in on this. This age group have subsequently become one of the primary drivers of on-line marketing in recent years, said Frost & Sullivan industry analyst Kamlesh Kalwar.

The study found out that the market was worth US$142.1 million in 2007 and forecasts this to reach US$413.5 million by end-2013, growing at a compound annual growth rate (CAGR) of 19.5 per cent from 2008 to 2013. In 2008, Singapore’s on-line marketing industry was estimated to have raked in US$190 million in revenues, representing a year-on-year growth of 33.7 per cent.

Paid search marketing, by far the largest on-line marketing segment, accounted for 44 per cent, equalling US$62.5 million, of Singapore’s on-line marketing revenues in 2007. This segment is expected to continue growing at a CAGR of 22.1 per cent between 2008 and 2013.

“Companies have not only started to see the value of on-line campaigns, but also recognise the importance of tracking the campaigns. This is driving the growth of paid search,” pointed out Kalwar. As the segment rapidly grows, the number of search engine advertising advertisement networks and agencies has also risen exponentially, leading to more innovative search and targeting options for advertisers, he added.

Other mediums

Display marketing was the second biggest segment accounting for 25 per cent (US$35.5 million) of revenues, with banner ads and e-mail advertising becoming the two most popular types of display ads.

On-line classifieds accounted for 19 per cent (US$27 million) of the total revenues in 2007. Driven largely by the rapid audience shift, particularly youths, from print to on-line channels, this segment is forecast to grow at a CAGR of 17.5 per cent from 2008 to 2013. Job classifieds have been the main source of revenue for on-line classifieds in the past two years. The other key revenue earners are on-line auctions, real estate and automotive or car sites.

The smallest segment, on-line directory services, which accounted for the remaining 12 per cent (US$17.1 million) of revenues in 2007, is expected to grow only marginally at a CAGR of 7.6 per cent for 2008 to 2013. These are mainly of a display-only nature and do not seem to generate significant amount of traffic, said Kalwar.

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