The increase of over 80% in digital ad spend is quite remarkable given the fact that the total ad spends of the industry increased about 18% over the same period.
KARACHI:
Entrepreneurs should start treating the digital arena as a strategic component of their businesses rather than an extension thereof, said Fazal Ashfaq, CEO of B Solutions, a Lahore-based digital advertising agency, while speaking to The Express Tribune on Wednesday.
Despite rapid rate of growth in digital ad spends, its share in Pakistan’s total ad spend remains tiny. Digital ad spends increased from Rs560 million in 2011 to Rs1 billion in 2012 – a year-on-year rise of more than 80%. But the fact remains that its share in the total ad spend of the industry – estimated to be $386 million − is still less than 3%.
“If digital is not a key component of your business strategy, you risk playing catch-up to your competitors,” said a recent research report that B Solutions prepared and shared with The Express Tribune. The company conducts social media research and has been providing clients with advertising services since 2010.
The increase of over 80% in digital ad spend is quite remarkable given the fact that the total ad spends of the industry increased about 18% over the same period. The lack of interest in digital advertising on the part of Pakistani businesses is inexplicable given the fact that a typical enterprise can now reach more Pakistanis by mobile (voice) than it can through TV and print media combined.
According to the report, about 70 million people, or 36% of the total population, have access to TV. Similarly, only eight million people, or 4% of the total population, enjoy access to newspapers. In contrast, as many as 100 million people, or 52% of the population, have access to mobile (voice). The number of people with access to mobile (SMS) is 36 million, or 18% of the population.
In spite of the overwhelming statistical evidence in favour of digital advertising, it is astonishing that TV and print currently enjoy 56% and 30% shares, respectively, in the country’s total ad spend as opposed to digital segment’s 3% share.
“Mobile has changed the landscape and it’s just getting warmed up. In a commonly misunderstood country like Pakistan, there is a need to rely on facts as opposed to hearsay,” the report said.
Ashfaq says an affluent minority exists in Pakistan which − along with a ‘massive middle class’ − is driving growth in the country’s overall ad spend. He backs his statement with statistics obtained from the Pakistan Institute of Development Economics and Asian Development Bank.
According to the data, as many as 80 million Pakistanis, or 42% of the total population, earn between $60 and $300 per month. On the contrary, 56% of the population earns less than $60 per month while another 2% earn more than $300 every month.
“Understanding the landscape and where your audience resides therein is the first and foremost step any stakeholder should take,” it said.
Published in The Express Tribune, October 10th, 2013.
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@Saad: While reach is no longer such a big deal for Digital, an important area for an apples-to-apples comparison would be the level of engagement your audience makes with your digital initiatives than your non-digital initiatives. TV performs perhaps the worst in this regard. People used to play a game we created till 3am when there was no significant reward even. Good luck finding good comparison at the same cost elsewhere.
Dear Saad,
I'm Fazal Ashfaq & led the team responsible for the report. Thank you for your comments. Agreed that digital advertising's reach is low, but consider these facts. Newspapers reach only 4% of our country's population but capture 30% percent of the total advertising spend. In comparison Mobile reaches 65% of our country's population but capture less than 1% of total ad spend.
Our premise is that consumers spend more time on digital mediums (mainly mobile) and advertisers need to allocate digital spend and their focus accordingly.
Feedback is of course welcome & we hope to continue this constructive debate!
"In spite of the overwhelming statistical evidence in favor of digital advertising, it is astonishing that TV and print currently enjoy 56% and 30% shares, respectively, in the country’s total ad spend as opposed to digital segment’s 3% share" - Firstly, internet based advertising depends on its reach, which was not mentioned in this article and despite its growth, is still very low compared to other forms of media. Also, even though there is a significant increase in online advertising over the last few years in Pakistan, it is comparatively very cheap compared to TV,Press or other forms of advertising available in the country, making it a highly effective and efficient form of advertising (hence the high growth rate). Consequently, its total spend per year will always be very low as compared to other mediums which is why % spend for digital media should not be taken as a criterion for evaluating the popularity of online advertising in the country.