Advertising Agencies yet to cross Digital Divide
Ad agencies are still are not structured to handle the online media realities of today. And it got me thinking, which is not necessarily a good thing.
Walk into an ad agency today, and in the middle of the meeting, tell them you want to brainstorm about new media possibilities. Chances are, your hosts will back pedal and give non committal personal viewpoints while betraying a lack of intellectual grounding on how it could work for your brand.
With online activity and advertising being so prevalent in the marketplace, it will come as a shock to you that most advertising agencies in Malaysia are not geared to handle interactive assignments for marketers.
While some ad agencies pay lip service to it, with some token staff in place, most actually seek out interactive agencies to handle this task.
Hence the proliferation of boutique interactive shops now staking their claim to fame by how confusing their techie prima donnas can make online marketing sound.
Some international advertising networks have interactive sister companies to undertake such assignments, while some have taken forever to set up in Malaysia. The immortal mantra ‘Show me the Money’ still remains a pre-requisite.
But, to be fair, there are various reasons for this.
Foremost, there’s a void in management’s comprehension that such a service should be part of their total product offerings in the first place. Old school ‘mass media’ mindsets ride roughshod over new thinking in these endeavours. Plus the widely-held perception that techies know best hampers real marketing communications thinking to root itself in this space.
So it’s a question of where the money is, the painful learning curve, and an alarming deficiency amongst marketers to realise the value of online.
This is sad, because interactive marketing lends itself to the same principles of advertising, as we know it, except that the playing field is different. To adapt, our framework needs to be modified. Seasoned pros can add much depth to online advertising, if only they cared enough to share and move the ball down the line.
Looking regionally, growth in Asian media continues to be powered by India in broadcast and print, and by China in online, out-of-home and broadcast. In the UK for example, half of the top 10 ad agencies are digital shops, raking in incomes that will shame the socks off traditional ad agencies.
Digital is not another medium, it’s a way of life. From a creative perspective, most marketers (and to be fair, a lot of agencies) still treat digital as a medium to be ‘consumed’ - “We need to extend the look and feel of our TV into online”. Well, sad to say, for a lot of the online audience, they may never interact with TV. Ask a typical 20-year old how they spend their time, and increasingly through Bit Torrent, YouTube and so on, the web is becoming the dominant form of their self expression and self awareness.
Embracing digital communication thinking into the advertising agenda upsets the age-old food chain to reap big returns from big media players.
Online media is still an afterthought amongst many advertisers, even though recent examples have been encouraging.
The Malaysian Tourism Promotion Board, the country’s eight ranked advertiser in terms of advertising spend, being a case in point.
Tourism Minister Datuk Seri Azalina said last Monday that Internet TV had a wider global audience and was less costly, compared to conventional advertising.
“In times of cyber communications, it is the media preferred by consumers,” she reiterated, adding that some 40 million viewers were expected to visit Tourism Malaysia’s news Web TV site initially.
“We expect 10 million more visitors next year, over last year’s 29 million arrivals,” she announced, trumpeting a rare vote of confidence for online marketing by a big-ticket client.
The impact of online media, as witnessed by the Permatang Pauh by-election was a surprise to those who depended on the mainstream media and the government’s publicity machine for news and information.
The fact that blogs, social networks and the like are fast becoming critical channels of engagement is scaring most agency folk. They are in unfamiliar territory, and the prospect of not monetising their efforts on the scale they are used to makes them sceptical about walking down that road.
But advertisers are paying attention to the traffic on popular Malaysian Blogsites these days, as apparent with the phenomenal growth of Blog Media specialist Nuffnang this year.
Fact is, there is no turning back.
While some ad agencies and even marketers choose to remain disconnected to the online phenomenon, its inevitability will be their Armageddon.
Unless they prefer to opt for a crash course during an impending full blown recession!
Tags: Advertising Agencies, Digital Divide, Malaysian Blogsites, Nuffnang, online media
September 28th, 2008 at 10:33 am
hi ham,
great to see your big support for more marketing and advertising using digital channels!
however, if i have interpreted your post correctly, i understood you to say that interactive-only agencies in malaysia are comprised of techies that have no grasp of marketing and communications.
do you really believe this to be the case? i don’t think so.
there are local interactive agencies with long track records of success that don’t base their strategies and tactics on a techie-only view. if they had, they would have never achieved any success for their clients.
i would argue that any interactive marketer worth their salt would never, ever start their strategic/tactical advice to clients from a techie point of view. the reason is simple: any strategy or tactic devised from this point of view is doomed to failure.
interactive-only agencies are in a unique position to sit with clients and their traditional agencies as an equal strategic partner at the branding table, providing advice that can deliver real benefits to the client’s business–and not techie mumbo-jumbo, which doesn’t belong in such discussions anyway.
i think we can all agree that technology is nothing more than an enabler. it’s what we do with it that counts.
jeff zweig
chief guru, web guru asia
http://www.webguruasia.com
October 2nd, 2008 at 6:47 am
If the article is referring to big ad agencies (not interactive agencies), such agencies may not be able to handle digital advertising yet.
Although they are incorporating digital expertise as judging from the purchases of digital and SEM agencies in the last 1-2 years, they may not be able to internalise digital processes as part of the traditional 360 suite of services that they provide for clients.
At a traditional 360 agency, the emphasis is on ideas, rather advertising nowadays are more execution-based. They don’t believe in having true specialists as it’s about coming up with the ideas, then finding the best outside directors, photographers, designers, music people, etc. to take the concept through the execution. And for such agencies, they may just focus on getting a few award winning digital creatives while subcontracting all the back-end work to outside vendors
At true digital shops, the idea, production and technology is usually handled in-house. And the type of ideas that they provide incorporate an ideal mix of creativity, marketing, technology and analytics/media planning. Such integration are missing at the large integrated agencies.
By failing to integrate digital thinking/processes into traditional advertising cultures, the bigger MNC agencies may very well relegate digital to a more subservient role, as compared to the above-the-line disciplines to TV and radio.
Pushing the digital envelope may take a backseat to developing digital ideas that are easy to media plan, measure and to sell.
In a traditional advertising structure, digital professionals are not given as much credit as they are pegged as the production people as compared to mainstream advertising staff who are the ones that are always recognised as the idea people.
As long as that happens, there is a risk that digital professionals are brought way too late into the brainstorming of any integrated campaigns> At their point, there is little that they can do beyond proposing ways of adapting the TV or print work to an online media i.e. putting a TVC into a video banner
Such thinking is at odds with reality, where interactive agencies have proven their ability to creatively push the envelope in interactive and integrated advertising campaigns without traditional agency inputs. Take the example of the award winning HBO “Voyuer” Campaign.
BBDO had an idea of a film for HBO, a US industry cliche i.e. “give an agency enough money and they’ll shoot a film.” However, Big Spaceship was able to take a typical creative solution and deconstruct it nto an amazingly interactive campaign.
October 20th, 2008 at 11:28 am
I agree with Jeff saying:
“interactive-only agencies are in a unique position to sit with clients and their traditional agencies as an equal strategic partner at the branding table, providing advice that can deliver real benefits to the client’s business–and not techie mumbo-jumbo, which doesn’t belong in such discussions anyway.”
Being an interactive agency means to track trends, and being on the edge of technology while at the same time able to grasp every single detail of what the client / ad agency needs.
There’s a slight different between interactive agency and web design or web developer company. They all holds similar expertise, but interactive agency blends it with communication and marketing perspective.
That’s why you shouldn’t put your interactive agency merely as an executor, but they should be your equal strategic partner.
You nailed it there again Jeff
Cheers
October 29th, 2008 at 12:02 pm
anon:
LOUDER! LOUDER!
December 2nd, 2008 at 6:28 am
It is interesting that there is not a whole lot of debate on this aspect over the last few months, let alone years, between the traditional big wigs and digital agencies in regards to the relevance of each others’ space. I can only conjure up two scenarios here; 1. Everyone is happily in bed with each other with digital marketing seamlessly integrated with traditional media or 2. the marketers and traditional agencies are still clueless.
Thinking that number 1 is the more likely scenario would be highly optimistic, yet my gutfeel is steering me towards scenario 2.
The Malaysian landscape would be fully wise and well off in understanding that if we are to market effectively towards our young population, as in most of Asia, we need to only reflect upon the behavioral patterns in terms of media consumption. I would be safe to suggest that they would be investing most of their time into high traffic sites like Facebook and Youtube and not quite TV3 or RTM. Of course, most of you are fully aware of the role blogs played on the outcome of the last general election. The challenge of marketers is how would they effectively exploit the huge number of captive eyeballs available. It is not surprising that we are still seeing the digital agencies struggling to breakeven, let alone go deep into the black.
But think share of the mind vs market share, that’s where the huge opportunity arises in building not only brand engagement and loyalty, but also providing a much highly desired traffic views.
With millions (or have we reached the billions already?) sites out there, just ensure that your billboard is not placed in the middle of the dessert.
December 12th, 2008 at 7:54 am
i agree with Marketer’s comments but would like to add the following:
new media and digital channels are not only consumed by the younger generation in malaysia.
the influence of blogs on the last election proves this. top blogger jeff ooi is in his fifties and there are other top local bloggers that are above 30 yrs old with audiences to match.
i must admit to some frustration by the perception that new media is only used by the young in this country.
jeff zweig
chief guru, web guru asia
http://www.webguruasia.com
December 19th, 2008 at 10:29 am
Hi Jeff,
I think the perception lies in seeing young people as more tech and web savvy.
I’m sure that there are mature folks that are just as handy with the web but they are in the minority and they may not be into as much tech.
And to be honest, I’m quite glad for this slightly misleading perception as it allows young web and tech savvy people with ideas to take a leadership role in this industry.
This is unlike the mainstream advertising sector which stress more on age, experience, industry reputation or network contacts if one is to progress through the ranks.
December 20th, 2008 at 10:57 am
but ad-critic, given the last election results in malaysia, how can we claim that people 30+ who use the internet and blogs are in the minority here?
it just isn’t true any more!
i know many people in the opposition party in malaysia of all ages (many of them 30+) who are very active on the internet and they have many friends of similar age who are just as active. if this weren’t true, we wouldn’t have seen the election results in the country that occurred last march.
plus just look at the massive traffic that sites like malaysiakini and other news sites get. i’m sure they get lots of traffic from people 30+.
why? because the content is relevant to them–and this applies to brands who know how to exploit these same strategies.
i think we all need to understand that there has been a SIGNIFICANT PARADIGM SHIFT in the internet over the past 2 years or so with the advent of free and easy-to-use blogging platforms like wordpress and blogger, youtube, facebook, linkedin, etc.
here is the key insight that i think many people (and many brands, unfortunately) are missing:
IT IS NOW DEAD EASY TO INTERACT WITH THE WEB. YOU DON’T HAVE TO BE VERY WEB OR TECH SAVVY ANY MORE!
this is why i’m so frustrated with the old-time mindset in the country that digital channels are only for the young.
we’re past that point now
jeff zweig
chief guru, web guru asia
http://www.webguruasia.com
December 20th, 2008 at 10:13 pm
Hi Jeff,
Thanks for your reply and for starting a discussion in an area that’s dear to my heart.
Just one provision. People in their 30s should not be considered old or even mature and I agree that the web is the best way to engage these yuppies/pmebs, as well as teenagers. My points are as follows.
1] Regardless of how easy technology and the Internet may become, they will always seem difficult to people who are new to it. This certainly includes most of the decision makers who control the marketing budget, media people, as well as mature target audience who don’t spend that much time on the web.
2] We should also note that most of the mature target audience spends much less time on the web, compared to the young whose entire life revolves around the Internet.
For most old people, they are far less likely to change their lifestyle habits, although I will acknowledge that they may learn to use the web for single function or limited purposes i.e. watch movies on youtube, check email etc.
As such, it is tough to develop effective online marketing campaigns and media buys to target mature target audiences.
These are the issues that arise everytime we discuss media strategies with clients and even their media buyers/planners that they should consider the Internet for products such as insecticides, watches (expensive ones) and kitchen peripherals.
This leads to my third point.
3] Interactive professionals need to take back the media planning and buying for the digital marketing budget. Most media planners in this region do not have the tools, metrics for measurement as well as the marketing discipline to do planning for digital campaigns.
Their age-old notions of reach and demographics are entirely not suitable for online advertising and their expertise in online analystics are practically zero. They also have little knowledge of the creative potential of buys on different internet portals, the creative use of technology via different mediums. The interactive creative team, digital strategists and production managers are often the only people with real experience in them.
And the only reason why the media houses are even doing digital planning because the times have changed, even though they are seriously left behind in their thinking and expertise.
And these are the people who are advising clients on media buying and planning for the Internet? They are the ones right now who is operating under the modus operandi that the web is for the young and advising their client as such.
Perhaps they are trying to explain away their lack of expertise in this area and to continue to justify funneling away the bulk of the client’s budget to traditional advertising channels for the mature target audience.
After all, that’s where they make their money, especially since digital still doesn’t pay that well in media comissions : P
December 23rd, 2008 at 4:13 am
Hi Ad-critic,
Good that we can continue our discussion on the ADOI blog again!
I still think you’re not giving older web users in Southeast Asia their due. I strongly believe you are underestimating them. These people are not ignorant and they are not all stuck in their ways.
Many people with access to today’s technology, regardless of how old they are, will switch to using the web and other digital media if it makes their life easier, more convenient, etc.
In my view, it doesn’t matter if it’s new. It’s all about “what’s in it for me if I learn this new stuff and how little effort will it take for me to enjoy these new benefits?” And as I wrote in my post above, learning and using this new stuff is now easier than ever before.
I’m not saying that older people in the region make up the majority of Internet users, but to simply write them off as too old-fashioned to even engage with it is no longer a realistic expectation, in my opinion.
Certainly, older urban dwellers with professional jobs and higher incomes are the main people to focus on for now, but who wouldn’t want to target people like this online? They have plenty of money to spend, right?
This goes directly to your point about expensive watches and if the kitchen peripherals are high-end, then why not?
And if these people are C-class executives in their companies, then there is a potential goldmine of untapped opportunity for B2B digital marketing.
Let me prove my point to you by highlighting 3 things:
1. I don’t have access to hard statistics but I know for certain that a significant chunk of people who surf to leading news sites in our region are 40+.
2. There are many Asian businesspeople in our region 40+ who carry (and who regularly use) devices like Blackberries for more than just phone calls. These mobile devices are often even more complicated than a basic PC yet this more mature crowd uses these devices regularly. Why did they take the time to learn how to use these mobile devices? Because of the convenience!
3. We are now running a rich media banner campaign across the Southeast Asian region (including Malaysia) for a luxury car brand that wants to reach a more mature audience.
The banners are running on a portal with this type of mature audience and the results are stunning: 500%-1,000% above APAC average rich media response rates for the automobile industry!
I’m a big believer in rich media banners (although I have issues with the non-rich media type in most cases) but I’m still surprised that the results have been this strong.
On average, we are even seeing our mature target audience spend 140 seconds interacting with the banner. Now compare that to a non-interactive 30-second or 60-second TV commercial where we don’t even know if the person is watching it or not!
jeff zweig
chief guru, web guru asia
http://www.webguruasia.com
December 28th, 2008 at 6:04 pm
Hi Jeff,
I’m glad to hear of your successful rich media campaign for 40 +. My online experience is mostly with youths i.e. 18 plus and PMEBs via rich media campaigns.
I have no issue accepting your point that it is feasible to target older age groups with online campaigns. I have 2 reservations though. ‘m not sure about the attention span of 40+ on news websites who may receive online newsletters instead, as well as the prevalence of the use of Blackberries in this region.
I guess the nagging issue is that most research points to youths and PMEBs as spending the most time on the Web and the other age groups seem to spend much less time in comparison. We need to address this perception gap with clients, media partners and even their above-the-line AOR partners.
While this may seem common sense to most, the fact remains that these partners of agencies have their own prejudices and may even resent even a little part of the shrinking marketing budget being funneled into interactive campaigns.
I’ve been to enough meetings to know that it is rare that digital agencies will be regarded as an equal to a mainstream agency AOR or the media planning agency. They either see us as third party suppliers, rivals or poorer/less glamorous cousins. We are often brought in too late to influence the development of the campaign as a result.
I do have a possible strategy to address this and that is to widen the definition of interactive advertising to go beyond digital such as interactive POP and outdoor displays (using flash and online UI expertise) and mobile. The basis here is ideas and media that allow consumers to interact with the brands.
With this in mind, perhaps we can spark off a more fruitful conversation with clients and partners and widen the target audience to the older age groups as well.
January 3rd, 2009 at 4:52 am
I fail to see why the 40-somethings are a difficult group to target and reach. I think they form a critical part of the Internet generation. Let me share a Malaysian prespective.
The 46-50 yr olds would have been in their mid-30s / PMEBs when the Internet first came about, and those in 40-45s would have been in their early 30s.
Given the fact that the web first started in the 1996-1997 and began making an impact in the late 90s prior to the bubble burst. The 40s generation (today) would have by today become the ‘first movers’ or at the very least the first to be exposed to the Internet.
I would speculate that the 35-45 yrs olds today would be a very key target audience and would form the first generation of Internet users in Malaysia.
They would form the generation that is probably fairly accustomed to the Internet and will likely be the ones who will be using web services such as Online Banking and online shopping.
During the mid-1990s, PMEBs were only 500k of the total population with an average 2.2 credit cards. However, today the market averages 4.2 credit cards and the PMEB base is some where in the regions of 1.5 of the population.
We cannot deny the fact that youth form the largest of web users, since they account for 40% of the Internet users in Malaysia.
cheers
garytay