MSA's digital spend report shows accelerated digital spending

The Media Specialists Association (MSA)’s report on digital advertising expenditure (adex) – which was released for the first time ever – revealed a healthy growth amidst prevailing cautious sentiments in the industry.

The digital adex of RM335.5 million for Q1 2019 sets the course for digital
adex to maintain its strong improvement in the last two years in recording
stellar numbers.

The report is a result of the MSA’s collaboration with Malaysian Digital Association (MDA) and Malaysian Advertisers Association (MAA), which commenced in early 2019, to provide an accurate view of the
state of digital adex in Malaysia.

The Q1 2019 report is based on data provided by 21 of MSA’s Member
agencies, which account for 65% of the real digital spend in Malaysia. The
numbers are audited by independent auditor, Ahmad Abdullah and Goh and aggregated to provide a consolidated view of the total digital adex for
Malaysia.

Digital adex increased by 19.4% from 2017 to 2018 to carve out RM869m
from last year’s total adex of RM4.48 billion. The MSA estimates that the total digital adex in 2017 and 2018 to be in the region of RM1.2 billion and
RM1.445b respectively.

The Q1 2019 figures further underlined the importance of interactive and
engaging channels for marketers, as the aggressive transition from traditional to digital channels continues.

“Digitalisation and the emergence of new digital technologies and platforms
have radically changed the media landscape in the context of marketing
communications. This has led to a divestment from traditional media to these digital platforms,” Mr. Yap Chee Weng, the MSA President, said.

“However, no dependable digital adex was available to track the investment
on these new digital platforms. This shortfall has pushed the MSA to embark on a solution to track the spending on digital platforms.”

Yap, the Head of Media Brands of Dentsu Aegis Network Malaysia, believed
that the MSA’s digital adex report would pave the way for marketers and
media partners to initiate their business strategies in a more sustainable
manner.

The digital media environment has required reliable data to propel growth on an accelerated mode year-on-year. Based on the data gleaned from their
Member agencies, the MSA states, with almost certainty, that digital advertising surpassed television adex to become the largest medium for the
first time in 2017.

“In 2018, digital advertising surged ahead and commanded approximately
33% of the country’s total adex. This digital adex collaboration with MDA and MAA is a positive step in ensuring that the largest benefactor of media
advertising spends are accurately reported and reflects the true health of the country’s total adex,” Ms. Kristine Ong, the MSA Digital Adex Committee
Chairman, said.

“It not only provides agencies, marketers and publishers with an accurate
view of benchmarks across platforms and sectors but also signals the changing structure of digital advertising in Malaysia,” Ong, who is also the
Managing Director of Initiative Media, said.

Another reason for optimism in further growth is the data on growth by
platform. In 2017, digital display commanded highest adex share amongst all digital platforms but its adex share is under erosion by the increase in Video and Social spends.

The combined platforms of Display, Video, Social and Search account for
94% of total digital adex in 2018 and 2017 respectively. In Q1 2019, the share of spends between Display (28.1%) and Social (27.4%) is almost marginal.

The third largest platform remains Video, which staked a share of 22.3%,
while the Social platform offers lucrative possibilities in view of its native
functionality and supportive ecosystem.

“The MSA believe the Search and Social share to be under represented as it
does not take into account the direct advertisers’ media placements with
Google and Facebook and media placements from long tail media agencies,” Yap added.

The product categories also logged convincing data to signpost a healthy
adex growth. In 2017, five categories accounted for 70% of digital adex, led
by Technology and Electronics, Food and Beverage, Retail (physical stores
and online), Personal Care and Automotive.

The share of the same five categories of digital adex has increased to 75% in
2018 and 77% in Q1 2019. Again, Technology and Electronics retains its main share (22.1%) followed by a tie between Food and Beverage and Personal Care (15%). Retail (14.8%) is very close behind while Automotive (9.65%) maintains its place at the top of the product category table.

MSA is currently compiling digital adex reports for Q2 and Q3, 2019 which is expected to be released later this year. It will continue to be an ongoing effort by MSA moving forward.