6 adobo magazine Digital Showcase 2013

Growing in fits and starts, digital media has for some time now become mass media in the Philippines, its scale e!ectively re-ordering the long-standing media hierarchy that has been established by decades of local consumption patterns.

Even casual observations of local consumers at work and play are enough to confirm digital media’s already impressive reach at this stage in the growth curve. Beyond this, there is a wealth of data to corroborate digital media’s massive scale:

Internet penetration stands at just over 30% and the internet audience base is growing at the fastest pace in Southeast Asia. Though the figure lags neighboring markets, online has a nearly 100% reach of a!uent households, which hold 80% of disposable income in the country.

Mobile penetration has surpassed 100%. There are now more mobile phones in circulation than the total

population because of ownership of multiple devices. Mobile phone ownership extends well into the E socio-economic segment, say agencies.

Ownership of internet-enabled smartphones has shot up 30% in the last two years to just under 40 million. Numbers such as this help deliver what TNS dubs the always-on lifestyle Filipinos hanker for, while providing the opportunity for “engagement everywhere, anywhere and anytime” for marketers, says Smart Communications digital head Leah Besa-Jimenez.

Social media is king with the number of Facebook accounts closing in on 35 million, a staggering number even after the company’s recent clean up and closure of inactive accounts. Indeed, comScore ranked the Philippines second only to Brazil in the world in Facebook penetration. Social networking accounts for 41.5% of the

Mass appealDigital media’s year of explosive growth

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adobo magazine Digital Showcase 2013 7

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time local users spend online. Online video use is exploding. In

its 2013 Southeast Asia Digital Future in Focus Report, comScore found the market leading Southeast Asia growth rates with an 18% rise in video viewers year-on-year.

“Digital is mass media today when we have Philippine Facebook log-ins at more than 32 million, which is higher than any TV program of the day, and there are billions of Google searches versus print circulation,” notes Albet Buddahim, digital director of performance marketing agency Performics, a Publicis Groupe brand.

Numbers such as these will help re-order the media hierarchy in the way advertisers allocate their spend, say agencies. With decades of research data and its beloved place in local households, television has every chance of staying at the top of the media heap, its place assured for now as consumers move to a multi-screen environment, making viewing a more social past-time.

It will be a di"erent story for newspapers. Media agencies predict this medium will likely surrender its second-place spot to digital media in advertising spend allocations. In contrast, radio is expected to stage a rebound of sorts, helped by operators using social media to grow the medium’s fan base.

There’s still more upside to digital extending its mass media standing. The increasingly mobile culture will set the next growth stage as multimedia phones, tablets, handsets and mobile internet pricing plans become more a"ordable and telcos

extend coverage of ultra high-speed broadband networks that support video-on-demand and other data heavy services.

At it is, 12 million local Facebook users access their accounts through mobile devices, eventhough mobile plans are deemed too pricey at this stage. More than half of local respondents to TNS’ study said so. Which explains why as many as 35% of mobile users connect to the internet via free Wi-Fi, increasingly a standard value-added o"er of restaurants, malls and even barbershops.

A"ordability though will be key to driving growth. “There has been a 50-60% decrease in the cost of devices over the past 12 months, while features and capabilities have doubled,” says Buddahim. Prices for multimedia phones, o"ering television and radio capability, now lead in at 1,000 pesos.

Data plans are also becoming more a"ordable. There has been a 30-50% decline in data connection costs and telcos have been aggressively advertising their pre-paid data o"ers.

“ Globe has an internet o"er that is at the level of call and text – at 10 pesos for three days,” Buddahim says, noting that 80% of phones sold in the last 12 months were internet-enabled, a"ording greater connectivity and supporting a variety of online activities.

Pricing at this level will only make internet and digital media more accessible right across the socio-economic segment – from the a!uent to the less well-o", from the young to the mature end of the market. As with most markets, the youth factor

Shaking off traditionLegacy players go digital

Traditional media is getting a makeover and not a moment too soon. Consumers are going mobile for their news and entertainment.

ABS-CBNEarly this year, the broadcast giant hired a chief digital officer and head of its Online Media Group to prime it for the new marketing order. “ABSDCBN has long embraced the digital realities of media,” says its digital chief Donald Lim, pointing to the 2010 launch of its onDdemand internet TV service iWantTV, where viewers can watch any ABSDCBN show, even past episodes, for free.

“It was very pioneering and fearless of ABSDCBN to create something that could potentially hurt their main line of revenue. The results are staggering.” In March 2013, it clocked 36.9m views with 2.7m unique visitors. Effective Measure ranked it as the country’s top website.

The broadcaster has also made a foray into mobile with a pioneering contentDdriven partnership with Globe Telecoms, ensuring its presence on multiple screens.

consumers toggle between multiple screens at a time. Under the deal, it will harness Globe’s network to deliver its content but also offer traditional telco services – from mobile internet, voice and text – on mobile devices.

“All platforms of ABSDCBN – from radio to print – are experimenting and gaining tremendous headway in digital with various executions and use of social media to interact with their audience. We are now preparing ABSDCBN for the digital revolution … to be relevant to the next generation of Filipinos.”

8 adobo magazine Digital Showcase 2013

media shift but a lifestyle and behavior shift,” Buddahim says, noting that digital capabilities have rendered the world flat. Local users have much more in common with markets a world away in terms of content they access, their preferences and behavior.

For marketers, the challenge arising from the situation is two-fold: How much should they direct to digital media versus traditional channels. More importantly, how should they structure their business to respond to the ‘I want it now’ consumer mentality the internet has ushered in?

“Digital media is still at the ‘slowly but surely’ stage today,” says Donald Lim, a founding member of the Internet & Mobile Marketing Association of the Philippines and chief digital o#cer and head of ABS-CBN Online Media Group. “While brands are more open to experimenting, seeing other brands experiencing some success, they are still re-allocating budgets with caution.”

Industry estimates place the allocation on digital at between 2-3% of a marketer’s overall budget, while so-called “advanced” clients are spending between 5-7%, still tiny given online’s more than 30% reach. “It will take some time to shift the paradigm of senior leaders in the organization. This seems like circa 2008 and it is,” adds Lim. “Multinational brands like

is fuelling digital media’s growth momentum, and the Philippines has one of the largest youth segments in Southeast Asia. 28% of local mobile internet users are below 24 years, the highest proportion in Southeast Asia, according to new research by the Mobile Marketing Association and global mobile ad network Vserv.mobi.

With digital reach at this level, agencies are wondering if the time has come to retire the demographic segmentation modeling advertisers have used for the past decades. In its place would be one based on psychographics – covering consumers’ desires, interests and motivations – as marketing communications shifts from Mad Men-style persuasive advertising to a nurturing, facilitating and experiential approach.

“The digital shift is more than just

Coca-Cola, Nestlé and Unilever are leading the charge and influencing the industry.”

Organizations such as Nestlé, the biggest winner at August’s Boomerang Awards, has in-house ‘digi-champs’ to evangelize digital use among its brand teams, while Procter & Gamble is already allocating double-digits of overall Philippine spend on digital for Gillette and Olay, its digital brand champions.

Starcom MediaVest Group’s digital director Quad De la Paz points to a number of initiatives clients have adopted as proof that they are taking digital seriously: They have begun hiring a digital person for their team, they have initiated talks with media partners and agencies and implemented projects shortly after and they have poured “serious investment” – of about 1 million pesos for a month – on digital campaigns. “Digital investments continue to grow in double-digits,” says De la Paz.

Lim is hopeful digital spending will rise to 5-10% of overall budgets by 2015 as brands reap attractive investment returns from the medium.

As they make the shift to digital media, marketers will have their work cut out for them. Nielsen research from late 2012 found that most internet users were unable to recall any online ad except for mobile phone ads.

The Fundamental Stage LEVEL: 1

The Tactical Stage LEVEL: 2

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The Integrated Stage LEVEL: 3

The Optimal Stage LEVEL: 4The Fundamental Stage

LEVEL: 1The Tactical Stage

LEVEL: 2

hello!thank you!

The Integrated Stage LEVEL: 3

The Optimal Stage LEVEL: 4

The digital shift is more than just media shift but a lifestyle and behavior shift.