Online ad spend to hit $182.3m by 2010

By: John Davidson, Singapore
Published: Dec 10, 2008

Regional - Online ad spend will reach nearly US$200 million in Southeast Asia by 2010, with most of the growth in the next two years coming from display advertising, according to a new study by Yahoo and Nielsen.

The joint study covers Singapore, Malaysia, Indonesia, Thailand, the Philippines and Vietnam, and forecasts spend levels for both display and search advertising for the next two years.

Singapore's display market is expected to rise from US$23.99 million in 2008 to US$26.1 million in 2010, but will be pipped by Indonesia's growth which will hit US$28.45 million by 2010. Strong growth in display is also expected in Thailand, which is expected to reach US$21.36 million by 2010.

Singapore is predicted to remain top in the region for search marketing, with growth from US$17.49 million (2008) to US$25.47 million (2010), with Indonesia also growing strongly to hit US$13.42 million from US$4.68 million and Thailand to reach US$10.07 million from US$2.52 million. Both Yahoo and Nielsen claim their figures are "conservative" and growth levels could in fact be higher.

Stuart Pike, industry solutions director for Nielsen Online in APAC, said while Singapore would be the most "mature" market in SE Asia and Vietnam the most "immature", all five markets have "the basic fundamentals for growth".

"Vietnam, Indonesia and the Philippines will be driving 90% of the growth in the next five years. Indonesia has a bigger scope for growth. [But] it's definitely an exciting time to be in the online industry in Singapore," he said.

Pike said display advertising will grow quicker than search in SE Asia in the next two years, but they will change as each market becomes more developed.

"The more mature a market, the more search's growth outstrips display," he said.

Yahoo and Nielsen claim its Online Industry Review is a first-of-its-kind formal study of the online ad industry in SE Asia.

Ken Mandel, managing director and VP of Yahoo SE Asia, said because the region doesn't received as many ad dollars as North Asia (China, Japan etc), "we need to bring insights to advertisers otherwise they can't plan".

"There's a reluctance [for marketers] to go online because it's difficult - we want to reduce that," he said.

Pike said the global economic crisis is also pressuring advertisers to spend more money on digital.

"The downturn is forcing marketers to online. It's a stimulant to use online," he said.