Welcome to the Internet: Outdated local firms urged to spend more on online advertising

Businesses are missing their audiences.

Local businesses are failing to reach their target markets because of the significant media gap in Singapore. A report by PwC revealed that although Singapore has one of the highest smartphone penetration levels in the world, the level of online advertising is well below international averages.

The report revealed that 85% of Singaporeans have smartphones and spend an average of 40% of their time on online media each day. However, the amount of money that businesses spend digital advertising is one of
the lowest in the developed world.

Although the proportion of advertising budgets allocated to online has grown rapidly, climbing from just 7% in 2011 to 15% in 2014 with a compound annual growth rate of 35%, Singapore is still far behind the United Kingdom, China, Australia, United Arab Emirates, USA and Japan.

Businesses still spend bulk of their advertising funds on newspaper ads, while TV commercials are the second most-favored advertising medium. Online advertising and out-of-home ads take the third spot, while magazines and radio ads are the least favored.

The four common challenges that stifled the industry from taking the leap are poor understanding of measurement metrics (68%), limited supply of “digital” talent (64%), slow mindset shift in education (59%) and relative ease of using traditional media (45%).
 
The report notes that businesses should start closing the media gap by developing meaningful business metrics for digital, rolling out talent strategies to integrate digital competency into the workforce, providing top down executive support for digital, and developing more integrated media strategies.