Use of Digital Marketing Is On the Rise

Hong Kong, July 23, 2004 - According to a survey conducted by the Asia Digital Marketing Association (ADMA) with the support of MEDIA Magazine, and recent data released by DoubleClick and Nielsen//NetRatings, use of digital marketing is on the rise in Asia Pacific and online activity by users and businesses remains at all time high levels. However, it is clear that businesses still have not tapped the medium's full potential, and it underscores the need for marketers to follow responsible guidelines for online behavior to protect privacy and the ongoing effectiveness of the medium.

77% of the ADMA survey respondents say they utilize digital marketing, 20% spent at least 15% of their total marketing budgets online, and 4 in 10 respondents indicate they have increased their budgets over last year. It's clear that businesses are a long way away from tapping the medium's full potential, with most companies focusing on their websites (80%), e-newsletters (66%) and e-mail marketing (66%), while making less use of search engine marketing (26%) and online advertising (38%). Companies also underutilize their customer databases as a marketing resource: 94% maintain databases, but 50% communicate with their customers only on an occasional basis. 20% of businesses don't seek permission or offer an opt out option for their e-mail marketing, which raises privacy concerns.

"The ADMA survey paints a picture of a medium in development," said Douglas Khoo, who led the ADMA research effort. "There is a large gap in the activity level between the most enthusiastic users of digital marketing, and those companies that are just getting started or are underutilizing their online marketing resources. The growth is strong, but the real potential is for companies to make more sophisticated and comprehensive use of this developing medium."

"It is very encouraging that more and more traditional advertisers are adopting online advertising to reach their targeted audience," said DoubleClick's Managing Director Asia Pacific, Ralf Hirt. "Internet media consumption is up and therefore advertisers want to reach consumers where they actually are. Smart tools and reports make this extremely effective. Online ads are becoming both larger and richer. Online advertising is an important part of every integrated advertising strategy and in fact it is significantly increasing as the advantages are so obvious."

Over the past three years, the number of Hong Kong people using the Internet at home has increased by 34%, while the amount of time spent surfing has almost doubled from an average of 11 hours 46 minutes per person in June 2001 to 22 hours and 38 minutes in June of this year. When time spent using Internet applications such as Instant Messaging or Media Players is included, the average time spent in June 2004 was a phenomenal 35 hours and 26 minutes.

"While some advertisers remain hesitant to utilize digital marketing, in particular search engine marketing and online advertising, the Internet is undisputedly the best medium to reach audiences below the age of 35 living in above average income households," said Peter Steyn, Managing Director, Nielsen//NetRatings Hong Kong/Singapore. "The latest figures also indicate that eight out of ten people use a search engine, which can prove to be a very effective marketing tool."

"The fact that digital marketing has earned a place in the collection of integrated marketing tools is exciting," said David Ketchum, Chairman of the ADMA. "However, continued growth without responsible use of the medium can potentially impinge on consumers privacy and ultimately cause a decline in its effectiveness. The ADMA urges all marketers to follow industry guidelines for responsible online marketing."

The ADMA guidelines for marketers, as well as anti-spam tips for consumers can be found at www.asiadma.com.

The survey's purpose was to establish the state of digital marketing in the Asia Pacific region and was conducted amongst marketers from varied industries. Questionnaires were emailed to a pre-qualified list of respondents who had opted-in to receive communications. The sample size of the survey is 111 respondents and the survey was conducted in June 2004.