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Adtech's growing importance in Southeast Asia's business ecosystem

·5-min read

Here's how businesses can capitalise on opportunities while building a sustainable and safe digital environment for their audience

COVID-19 has revolutionised industry practices globally. Technology and digitisation took centre stage for business operations and became primary growth drivers. For brands, one of the biggest challenges was how to stay connected with their consumers in the virtual world.

As new online behaviours emerged, consumer interaction with brands evolved over multiple platforms such as mobile, social media, over the top (OTT) and connected TV (CTV), making top-of-mind recall a key priority for businesses. This is especially true for brands in Southeast Asia (SEA) where consumers plan to continue using digital platforms to the same extent or more after the pandemic. According to eMarketer, digital ad spend in SEA grew by 17.8% in 2021, accounting for 31.5% (USD 3.68bn) of total ad spend. This figure is expected to rise to USD 4.1bn this year.

Digital advertising delivers value for businesses by helping them engage their audience in the virtual world. In the digital ecosystem, how brands communicate with their target audiences and scale their campaigns can be a deal-breaker for businesses, especially for startups in the process of building a loyal customer base.

However, many marketers are still evaluating their digital advertising investment. Here are three good reasons why both small and large businesses in SEA should increase their investment in digital advertising and advertising tech (adtech):

1. Emerging digital mediums

Digital consumption in SEA is growing faster than the rest of Asia Pacific. According to research by Facebook and Bain & Company, SEA is set to overtake China to become the fastest-growing digital economy, having added 40 million new internet users during the pandemic. This growth can be attributed to rising internet penetration and adoption of emerging platforms such as mobile, social media, OTT and CTV and will be accelerated by the rollout of 5G.

Interestingly, one of our studies showed that customers are open to seeing ads in exchange for free streaming. However, to manage ad campaigns across multiple channels, brands need to embrace adtech solutions like programmatic, which is automated media buying across multiple platforms. With its matured infrastructure, programmatic can help advertisers maximise their ad spend and scale audience reach.

2. Growing start-up ecosystem

SEA has a robust start0up ecosystem with new businesses emerging in every industry. A smart customer engagement strategy is crucial for these young brands to build credibility and instil brand loyalty. Customer engagement is no longer limited to any particular stage in the customer journey but has become pivotal in driving the overall brand experience.

With tighter budgets and a lack of customer understanding, new businesses need their digital strategies to be omnichannel, scalable, agile, and cost-effective.

But to understand what works well with the audience, brands also need to invest in adtech that provides insights into a campaign’s performance. What they need is the capability to target the relevant audience, to understand campaign success measurement metrics, to extract the insights to optimize their campaigns so as to reach and engage with the right audience.

Moving ahead from the quantitative metrics – such as impressions, likes, comments and shares – brands must focus on qualitative metrics to gauge their campaign’s performance. These include metrics like quality attention and time-in-view, which give a clear picture of whether the brand is reaching real people and how much time viewers are spending on a particular ad.

3. Increasing consumer distrust and misinformation

According to the Facebook and Bain & Co report, consumers in SEA see social media as the key channel driving their purchase decision. Thirty-seven percent use it for discovery, 31% for influence, and  26% for product research.

However, social channels are also susceptible to fake news, misinformation, and data breaches, more so since the pandemic. This has made consumers more sceptical than ever, impacting brand campaigns directly and indirectly.

Our Social Ads and Consumer Perception Study also found that over two in five consumers are less trusting of ads they see on their social feeds due to the growth of fake news. However, the challenge goes beyond the general concern around fake news. The study also showed that almost half (47%) of consumers will not be likely to purchase a product or service advertised on social feeds that is next to unsafe content.

In such scenarios, not only does the brand suffer lower ad returns but also risks losing customer loyalty for good. Merely employing an omnichannel approach and automating media buying will not reap returns unless digital campaigns are optimised for contextual relevance and appear in brand-safe environments.

To navigate this, brands must partner with trusted third-party verification partners to ensure their campaigns are reaching the target audience in suitable and contextually relevant spaces. Our Power of Context study shows that digital marketers can achieve higher brand memorability and elicit positive emotional responses from consumers by activating contextual strategies.

Join the bandwagon or lose the game

Digital advertising is ever-evolving and so are the challenges of the ecosystem. It will benefit businesses to adopt the best practices of the digital ecosystem sooner rather than later. Merely running digital campaigns will not reap the returns unless the right ad tech tools are employed to ensure ads are shown to real people in safe, reputable environments, or alongside relevant content for greater brand memorability.

The stakes are high, especially in SEA’s growing digital economy. Businesses must ensure that they capitalise on the opportunities of the digital ecosystem and build a sustainable and safe digital environment for their brand and audience.

Lisa Utzschneider is the chief executive officer of Integral Ad Science

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