Market Spotlight: 3 Key Trends That Are Shaping Digital Advertising in APAC

By Aqilliz  


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Market spotlight

The past two decades have seen Asia Pacific’s remarkable rise to prominence, particularly in the areas of technology and innovation — not just because of its two largest economies, India and China, but also due to the growth seen in the emerging markets of Indonesia, Vietnam, and the Philippines. One of the most dramatic developments over the past decade has been the speed of digital adoption among APAC consumers. Already accounting for half of the world’s internet users, some of the region’s digital growth is already outpacing the rest of the world.

Despite the pandemic, opportunities for brands and marketers remain exciting in the region, with ad spend in APAC expected to grow by 5.9 per cent this year, according to a report by Dentsu. As recovery is underway, this might happen at differing speeds across the various platforms, with digital leading the charge. Faced with new realities and changing consumer behaviours, marketers will need to re-assess their priorities and marketing objectives in order to stay connected with the APAC consumer. As we move past the halfway mark for this year, here are three key trends that will continue to shape the region’s digital advertising industry going forward.

Continued growth in digital advertising and connected TV

From e-commerce to remote working, COVID-19 has undoubtedly accelerated the pace of change and the ongoing digital transformation across the world. The sudden increase of people being indoors has led to a change in lifestyle where consumers have shifted to spending more time online than before. As a result, advertisers had to make adjustments to their media strategy in the short term, from offline to online media. A new study by consultancy Media Partners Asia forecasts that digital media will grow to account for 67 percent of all APAC ad revenue in 2025, bringing the share of broadcast television down to 18 percent.

The good news is, TV is not being completely left behind — broadcasters are growing the online video ad market share through catch up and dedicated AVOD streaming services, particularly in connected TV (CTV) markets such as Australia, Japan and Korea. In recent years, the popularity of CTV and over-the-top (OTT) devices has been trending upward, and the pandemic has only accelerated this growth. Bringing together the best of both worlds, CTV combines the scale and attention achieved through traditional television with the precision of digital. While still fairly nascent on the global stage, the Asian market is well placed to tap into the growth potential of CTV advertising.

According to eMarketer, all APAC countries have seen exponential growth in digital video viewers this year, and that momentum will continue through the end of 2024. As the CTV advertising opportunity increasingly becomes a reality across the region, advertisers will need to carefully assess the content they appear on and make sure they are working with well-known, reliable content providers. Furthermore, given APAC’s composition of diverse nations at different stages of digitisation, a hyper-local approach that plays to the nuances of the individual markets will be essential.

Customer experience is still the focus

Unprecedented in speed and scale, the surge in online channels over the past year has put pressure on companies to meet rising expectations as customer experience (CX) takes centre stage. In fact, recent data shows that 53 percent of organisations in APAC are planning to increase their investments in CX software this year. As companies across the region continue to focus on customer experience in an effort to improve marketing performance, leveraging data and analytics for a holistic understanding of customers would be critical to successfully optimising their strategies.

Access to accurate and reliable customer data provides the opportunity to implement a higher level of personalisation to customer journeys, allowing brands to engage with their audience as individuals in a targeted and relevant manner. However, there is a thin line between a personalised and intrusive experience. The key lies in respect and simplicity — human skills such as empathy, collaboration, communication, curiosity, and creativity have to be embedded into digital processes to provide true value and connection. Creating great experiences requires thoughtfulness to build a trustworthy relationship at every touchpoint; and it all starts with understanding your customers from their perspective.

The hunt for brand-safe, privacy-first targeting solutions will remain strong

In a region as diverse as APAC, where every market has its own languages and cultural nuances, brands and advertisers navigating the region have always had to grapple with balancing audience reach and engaging them in the most relevant way. With the digital ecosystem growing increasingly fragmented, this underlying challenge has become even more pronounced, making targeting and personalisation more complex, yet more important than ever before.

Brand risk is also a very important factor to consider as it has a direct impact on a brand’s reputation and value. In practice, this means avoiding placing ads next to inappropriate content. The complex nature of the modern news cycle and digital advertising landscape has made it nearly impossible for brands to run ads against quality content in an automated fashion without encountering bad content. According to the Integral Ad Science’s Media Quality Report last year, brand risk in Indonesia reached 16 percent for mobile web display, two and a half times higher than the worldwide average of 5.8 percent. This was followed by other APAC markets like Japan, which recorded an increase of 2.4 percent to 5.6 percent, then Singapore at 2.4 percent and Vietnam at 2.5 percent.

In addition to brand risk, advertisers in APAC will need to prioritise secure data management and compliance in order to navigate the myriad of privacy legislation and differing regulatory requirements of the region’s markets. For instance, China mandates all data must be stored within its borders and no data can leave, and on the other hand, markets such as Indonesia, Cambodia and to a certain degree even India, are operating more like the “wild west”. While developments in data privacy regulations are likely to come, they will require careful, ongoing monitoring.

Furthermore, as the industry moves towards a cookie-less future, there will be a need to reach audiences based on personally identifiable information (PII) and leverage digital tools that are built on privacy-by-design principles, in order to establish higher standards for personalisation while staying compliant. As such, brands will need to update their technology stacks and strategic data partnerships to build up their own first-party data.

APAC has entered the digital decade and as technology gains even more prominence in the future, brands and businesses will have to make a conscious choice between balancing the promise of technology and prioritising the unique things that only human interactions can deliver. Advertisers that stay abreast with emerging and evolving consumer trends while innovating in tandem with industry developments will be in a better position to stay relevant and thrive through 2021 and beyond.

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