IAB Singapore released its first digital ad spend for six years last month and with it came some clarity on ‘theoretical’ industry truths, such as the disparity between APAC markets.
Timing well with this was an event in Singapore by InSkin, called Brand Digital, which asked a panel of experts to discuss issues, particularly around moving crucial brand spend online.
One aspect of the IAB Singapore and eMarketer ad spend report was the predictions around how much digital ad spend will grow, which will be significant for some markets with a more nascent spend.
Traditional spend shifting to digital
Sanchit Sanga, chief digital officer of Mindshare, argued that his media agency’s digital spend was higher than average and that with the shift, traditional media would be impacted most.
“The biggest victim, of sorts, will be the print business. It’s happened in the West but it’s not happened here as much. Radio or audio are also areas most likely to converge into something that goes digital,” he predicted.
In response to this, Geoff Tan, managing director of Singapore Press Holding’s (SPH) magazine business, said that an often overlooked format in online publishing was digital magazines, particularly in lieu of client questions like viewability. He discussed the process that SPH had undertaken to create interactive digital versions of all its magazines.
“We champion the fact that people want to read a magazine like an e-magazine. We made it interactive, all 109 magazines have been done in that fashion, you can swipe the page and the ads give a brand full share of voice, there are no other assets along the page,” he said.
Alongside viewability, the panel looked at other issues blighting the digital (and specifically programmatic) industry currently, such as transparency issues being brought to the fore by P&G, as well as ad misplacement problems which has led YouTube to seek Media Ratings Council (MRC) auditing.
Premium versus audience
The ad misplacement, the panel agreed, brought into question the issue of how to categorise ‘premium’ when you are targeting around audience. Premium inventory is something brand advertisers seek and while the ads may be hitting the right person, having the wrong context means it may not be the right time or the right way.
YouTube had tried to create a way in which brands could do this safely by launching Google Preferred, though it had to remove one of its most prolific makers PewDiePie recently after the YouTuber was caught in an anti-Semitic row.
Sanga said the idea of having a small percentage of its content deemed as ‘premium’ was creating “double standards” when you want to buy specifically targeted inventory. He called on the audience members that were publishers and asked if anyone wouldn’t consider themselves ‘premium’ to which no one answered.
Indeed GroupM in Australia has already made moves away from an exclusive deal with Google Preferred because it wasn’t performing to expectations.
Both Sanga and InSkin’s chief commercial officer Steve Doyle admitted that one thing brands that are new to digital, or are not fully digitised, don’t understand is the so called ‘technology tax’, or non-working media costs.
What this refers to is the costs that filter through from third-parties taking profits and margins, which means that while $10 may have been invested, not all of it will end up being spent on media.
Doyle, said: “Advertisers that are new to digital will not be used to putting in costs for non-working media and they’ll ask why? Is it much better than it used to be? It is new plus it is a cost, so we need to look at efficiency and improvement.”
Sanga added that all media agencies needed to re-look at agreements with suppliers to keep clients happy about the margins attributed to non-working media.
“Typically on a programmatic campaign you’ll miss out 30-35% to non-working media, which is fairly large. The cost of non-working should be 10-15% to feel more comfortable. For that amount to be solely spent on verifying and delivering isn’t sustainable and it is the obstacle to keep clients spending money. It is not the right model either as investments increase, the cost of tech should come down. If you look at technology like desktop computers and mobiles; as penetration increases, costs come down, and that needs to happen with ad serving, verification and DSP fees etc. When you realise that the amount you are investing has increased from $2m to $50m, then we all need to renegotiate our contracts,” he stated.
Education, education, education
A lot of the issues can be solved with education, says IAB Singapore CEO Miranda Dimopoulos, who said that clients needs to be educated out of the mindset that cheaper is better, because that brings quality down.
“We are still sitting in a market where we have conversations with brands in which we are educating them to start with the teams and stop rewarding them on bullshit metrics. If you reward on clicks, impressions and likes; that is what they’re going to do. If those are the conversations then brands also need an additional 30% to put into third party testing. This is very challenging because the mindset that is different in Asia to elsewhere is that cheaper is better, when you analyse the RFPs people are getting. Yes costs are going up, but so is value and effectiveness,” she argued.
The industry, particularly for agencies and suppliers, has a challenge ahead in regaining trust and ownership around the conversations on key topics for digital. However, as the IAB Singapore ad spend suggests, investment in region will still increase and with further education and informed debate, brands should find that they are able to reach their growing digital audiences with less frustration and concern.