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Advertisers Look Online as Budgets Tighten - Singapore's online ad revenues to reach US$413 million in 2013; youths, biggest online consumers
Advertisers Look Online as Budgets Tighten


NewswireToday - /newswire/ - Singapore, Singapore, 2009/01/20 - Singapore's online ad revenues to reach US$413 million in 2013; youths, biggest online consumers.

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A growing number of large brand advertisers are embracing online advertising given its ability to achieve precise targeting, measurable ROI over traditional advertising, and above all, in dour times, is a cost-effective medium amidst shrinking marketing budgets.

The Internet has become a mainstream source for the supply and search of 'infotainment' content; its biggest enthusiast - the youths. Advertisers and media agencies alike are cashing-in on this.

"The youths of Singapore are hooked on the Internet. They form the largest chunk of active Internet users and have been one of the primary drivers of online advertising in recent years," says Frost & Sullivan industry analyst Kamlesh Kalwar.

New analysis from Frost & Sullivan (, Singapore Online Advertising Market, finds that the market was worth US$142.1 million in 2007 and forecasts this to reach US$413.5 million by end-2013, growing at a CAGR (compound annual growth rate) of 19.5 percent (2008-2013).

In 2008, Singapore's online advertising industry was estimated to have raked-in US$190 million in revenues, representing a year-on-year growth of 33.7 percent.

If you are interested in a virtual brochure, which provides service providers, vendors/manufacturers, end users, and other industry participants with an overview of the Singapore online advertising market (also available are India, Malaysia and South Korea), then send an email to Sarah Lourdes at sarah.lourdes[.], with your full name, company name, title, telephone number, fax number, and email address. Upon receipt of the above information, an overview will be sent to you by email.

Paid search advertising, by far the largest online advertising segment, accounted for 44 percent of Singapore's online advertising revenues in 2007. This segment is expected to continue growing at a CAGR of 22.1 percent between 2008 and 2013.

Kalwar says, "Companies have not only started to see the value of online campaigns, but also recognise the importance of tracking the campaigns. This is driving the growth of paid search.

"Keeping pace with this fast-growing segment, the number of search engine marketing advertisement networks and agencies has also risen exponentially, leading to more innovative search and targeting options for advertisers," he adds.

Display advertising was the second biggest segment accounting for 25 percent of revenues, with banner ads and email marketing being the two most popular forms of display ads.

Online classifieds accounted for 19 percent of the total revenues in 2007. Driven largely by the rapid audience shift, particularly youths, from print to online channels, this segment is forecasted to grow at a CAGR of 17.5 percent from 2008 to 2013. Job classifieds have been the main source of revenue for online classifieds in the past two years. The other key revenue earners are online auctions, real estate and automotive or car sites.

The smallest segment, online directory services, which accounted for the remaining 12 percent of revenues in 2007, is expected to grow only marginally at a CAGR of 7.6 percent (2008-2013).

According to Kalwar, "Most online directories are of a display nature and do not seem to generate any significant amount of traffic. Many also lack a business model to significantly penetrate into niche directories, hence are not seen as attractive options for advertisers."

Although Singapore's online advertising sector accounted for a paltry 4.8 percent of the total ADEX (advertising expenditure) in 2007, Kalwar believes that the outlook for this young industry looks promising. "Growth is expected in all four segments of the market - display advertising, classifieds, search and directories. The rising broadband penetration and rapid adoption of mobile Internet are also major drivers for the shift of outdoor ADEX to online medium," he says.

"As users spend increasingly more time online, a growing number of companies are launching commercials online to grab their attention," Kalwar adds. By 2013, online advertising is expected to account for more than 9.3 percent of Singapore's total ADEX.

Fraud, however, is a major challenge for the industry notes Kalwar, "Online businesses have generally been plagued with problems such as advance fee fraud, click fraud, credit card fraud, FOREX scam, employment scam, phishing and wire fraud, amongst many others.

"The rampant rise of online fraud has shaken the confidence of many buyers and sellers in the online marketplace," he says. "It is important for the online industry to make a united effort in curbing online fraud to increase advertiser confidence in the online media."

The Singapore Online Advertising Market study is part of the Digital Media Growth Partnership Service program, which also includes research in the following markets: India, Malaysia and South Korea. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. Analyst interviews are available to the press.

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best practice models to drive the generation, evaluation and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 31 offices on six continents.

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Advertisers Look Online as Budgets Tighten

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