But Virgil Scudder, president of Virgil Scudder & Associates is eager to inject life into this pursuit of identity.

Scudder: A CEO has to have an identity

He is branding CEOs and he wants to shed light on the why and how, the pitfalls and the benefits.

The president of the New York-based communications specialist and strategist was recently in Kuala Lumpur to give a one-day talk Corporate branding & the CEO organised by Eric Pringle Associates Public Relations.

“A CEO has to have some kind of identity. Being nice is not good enough. A large company needs to have a CEO who is recognised by the media, the general and business community. He has to be known for being an honest and responsible person, with leadership qualities,” says the communication specialist and former broadcaster. For some 30 years, Scudder has been in the communications business. He has been working in 26 countries preparing CEOs for speeches and presentations and to work out their communications strategy.

CEO branding: The why

Just as a company gets mileage from well-branded products, a well-branded CEO can become a key asset.

“Real estate developer Donald Trump is brash, a deal maker and purveyor of luxury and class and media tycoon Rupert Murdoch is serious, firm and a global force. Sir Richard Branson is open, intelligent, witty and honest.

“Each of them has an identity and leadership qualities. This instils confidence,” says Scudder.

Murdoch is known to be a global force

“The investing public and the general community wants a leader who is able to take charge, particularly when there is a crisis. When there is an accident, certain questions will be asked. Does the company have a history of being careless? Does the company care about the community it is in, or the community at large?

“The last and worst thing a CEO can do is to avoid the media. That does not score any marks for confidence.

“The CEO must come across as responsible. Many times, people do not want to admit there is a problem. In such cases, no communications strategist will be able to help. It is a management problem,” says Scudder.

Toy maker Mattel is generally perceived as a responsible company. It recalled some of its lead-tainted products and toys with magnets that could be swallowed by young children. It was also honest when it admitted later on that there were design flaws rather than faulty manufacturing.

The how

Scudder suggests CEOs work with their public relations professionals to plan for a certain number of appearances with the media for the coming year. Be judicious with choice of media.

“This is not self promotion. Talk about the company and what it is doing in today’s changing business world. Where is your industry heading? Investors and shareholders will want to know.”

When meeting the media, public relations professionals and CEOs should prepare some stories which will be of interest.

Branson is known for his wit

If it is investor relations, be clear, concise and credible with the earnings goal. Be honest.

If it is unveiling a new product, focus on what it can do and how much better it is than the previous model. Then only zoom in on the technical details.

“Branding a CEO is different from doing a commercial. Package the information that is to be shared neatly and with interesting anecdotes. Be human and real.”

The second step is to accept a certain number of public appearances. Again be judicious. There are certain platforms to be seen on and others you want to avoid. Make sure there is a well-written speech with lots of information and trends that the audience can chew on. Take a world view and take off the blinkers.

Do some writing and get it published, or have someone do some pieces on economic issues or trends. In Malaysia, several company founders have their own biographies intermingled with their personal philosophies. Stand by the writing.

Fourth, be committed to one or two philanthropic cause.

The pitfalls

Scudder says he has been working with CEOs around the globe to fine-tune their strategies and media profile. All pitfalls, big or small, can be overcome if there is cooperation.

“Do not go before a camera unprepared. And do not put someone who has not been trained in front of the camera. That is a terrible thing to do. All public professionals worth their salt will prepare the CEO for the possible questions to be asked and how they ought to be answered.

The deal maker Trump

“An interview is not an interrogation. It is a dialogue between two friends. So it is okay to admit you do not know about the sales done in the Philippines, but the performance in China is tremendous. Do not be evasive, or mumble some unintelligible response. That will come back to haunt you.

“Remember that the press is not an army out there to get you. They just want to get a good story. They are competing with their own colleagues for space in their publication. They do not have an agenda.”

The objective of an interview is not just to answer questions. Do not assume too much knowledge on the part of the reporter. The CEO has to pick up the ball and tell the press what is the most interesting thing that is happening on his turf.

In the event of a crisis, come out in the open.

Be prepared to say:

- what happened

- how it happened

- what were the immediate response

- what is the current situation

- is the faulty product still being sold

- what future steps will be taken to prevent this from recurring

“The press deserves an answer. They have a readership who wants to know, and you, as the CEO, have shareholders and investors who want to know what is going on,” says Scudder.

And the result of all that strategising: a CEO who is an asset to the company and all the benefits that come with being an open and responsible leader who has a grip on the bridle.

By The Star (by Thean Lee Cheng)

The glitzy event here was graced by Deputy Prime Minister Datuk Seri Najib Razak as the guest of honour.

Congratulating the 30 brands, Najib said: “The role of branding in nation-building cannot be underestimated. Brands are the engine of economic growth. The growth of Malaysian brands will herald the arrival of Malaysia as a key contender in the global marketpace.

Global brand consultancy Interbrand was commissioned by the Association of Accredited Advertising Agents Malaysia (4As) to evaluate the top 30 brands in the country based on financial analysis, role of brand and brand strength, culminating with the MMVB.

The valuation is based on a proven methodology by Interbrand which pioneered the brand valuation practice and is now recognised worldwide for its annual global brand valuations with corporate publication Business Week.

4As president Datuk Vincent Lee said: “This study must act as a catalyst to inspire the great players in this country to look forward to being in the global top 100 brands.”

He said the MMVB was 4As’ initiative to “act as a catalyst to inspire companies to strive towards breaking into the global top 100 brands.”

Malaysia now joins a select few countries in Asia that have commissioned such a study by Interbrand. Taiwan, China and Singapore are the other markets that have recently embarked on similar studies.

Interbrand chief executive Jez Frampton said brands were powerful drivers of a business and any company who makes it to the Malaysian top 30 brands league shows they are world class.

“With the top five Malaysian brands each valued at over a US$1 billion, it is not impossible for Malaysian companies to be among the top 100 international players,” he said.

No	Brand	Ranking (USD)	Ranking (RM)
1	Maybank	US$2.877 billion	RM9.638 billion
2	Public Bank	US$2.048 billion	RM6.861 billion
3	Maxis	US$1.583 billion	RM5.303 billion
4	Genting	US$1.369 billion	RM4.586 billion
5	Celcom	US$1.215 billion	RM4.070 billion
6	CIMB	US$1.021 billion	RM3.42 billion
7	Astro	US$985 million	RM3.3 billion
8	Hong Leong	US$924 million	RM3.095 billion
9	Perodua	US$729 million	RM2.442 billion
10	DiGi	US$625 million	RM2.094 billion
11	Giant	US$616 million	RM2.064 billion
12	Malaysia Airlines	US$513 million	RM1.719 billion
13	Sime Darby	US$455 million	RM1.524 billion
14	TV3	US$328 million	RM1.099 billion
15	Petronas	US$274 million	RM918 million
16	YTL	US$218 million	RM730 million
17	RHB Bank	US$195 million	RM653 million
18	Ambank	US$194 million	RM650 million
19	Air Asia	US$99 million	RM332 million
20	The Star	US$95 million	RM318 million
21	Dutch Lady	US$89 million	RM298 million
22	Kurnia Insurance	US$87 million	RM291 million
23	Proton	US$71 million	RM238 million
24	MAA Insurance	US$69 million	RM231 million
25	Affin Bank	US$68 million	RM228 million
26	Padini	US$63 million	RM211 million
27	Parkson	US$37 million	RM124 million
28	Sunway	US$27 million	RM90 million
29	Mamee Double Decker	US$26 million	RM87 million
30	Bonia	US$22 million	RM74 million

Frampton, who presented the MMVB league table, said the inaugural ranking would assist in emphasising the role of brand contribution in business performance. The rankings provide top line measures of economic performance, stating what the brand is worth overall and among competition.

Commenting on its top ranking in the MVVB, Maybank Group chief executive officer Datuk Amirsham A Aziz said the key to creation of value for stakeholders was focusing on the customers.

“The judge at the end of the day is our customers, so we have to increase their accessibility to our products and services,” he said, adding that Maybank was incorporating more e-banking facilities in addition to brick and mortar outlets to extend their reach.

4As vice president Tony Savarimuthu said it hoped that the government would support next year’s event as 4As was a non-profit body which would have to look for funding.

He added that the 4As was grateful for this year’s media sponsors whose “spread of tools is amazing.”

By The EDGE (By Kathleen Tan)

The others in the Top 10 of Malaysia’s Most Valuable Brands (MMVB) were, in order, Public Bank, Maxis, Genting, Celcom, CIMB, Astro, Hong Leong, Perodua and Digi. The Star was among the top 20.

The top 30 brands came from a good mix of sectors that included banking, telecoms, leisure/ entertainment, media, automotive, retail, airline, property/ infrastructure, energy, food and beverage, insurance and apparel.

The top five Malaysian brands have been valued at more than US$1bil (RM3.35bil), and the results were revealed at the Malaysia’s Most Valuable Brand (MVVB) Gala Night yesterday. The Deputy Prime Minister Datuk Seri Najib Razak was present as the guest of honour.

MMVB is part of a national brand valuation study commissioned by 4As and conducted by Interbrand, a global brand consultancy.

Interbrand evaluated the brands based on a three-step analysis that included financial, the role of the brand and its strength.

“The value that strong brands give a company is its ability to secure income. Strong brands are now widely accepted as productive assets,” said 4As president Datuk Vincent Lee.

“Today, most forward-thinking CEOs recognise the value of brands. This is the most important investment a business makes.”

By The Star (By Rachael Kam)

The partnership involves the deployment of oneSearch, a proprietary Yahoo mobile Internet search engine through DiGi’s mobile Internet portal.

DiGi head of value-added services and new business Noelle Tan said Yahoo’s strength in aggregating information made oneSearch a “compelling and innovative” mobile Internet search tool for users.

“If you provide consumers with relevant and easy to use services, they will come back and use it more often,” she told StarBiz following the partnership announcement at the Mobile Asia Congress on Tuesday.

Yahoo oneSearch is designed for mobile devices, delivering results directly on the first screen and thereby removing the need for consumers to navigate through a sea of links to other websites to find the information they want.

With access to 3G spectrum potentially around the corner following DiGi’s proposed alliance with Time dotCom Bhd, oneSearch can be seen as one of the many avenues for DiGi to enhance its competitiveness in the mobile data segment.

Tan said DiGi’s data revenue was currently at a “pretty good percentage” and should grow further, given the group’s relatively young customer base.

She said the mobile advertising market in Malaysia was still untapped, adding that the partnership with Yahoo would be a starting point for both parties to develop the market further.

Yahoo Connected Life Asia vice-president and general manager David Ko said both companies were committed to enhancing the mobile Internet experience for consumers in Malaysia.

“Through partnerships, Yahoo and mobile operators can deliver first-rate mobile Internet services that engage consumers and create new revenue streams through mobile advertising,” he said.

Ko said DiGi would also make Yahoo Go 2.0 downloads available for its mobile web visitors using to further improve consumers’ mobile Internet experience.

Yahoo Go 2.0 is an innovative application that brings together services that include email, search and address book, which allow people to stay connected whenever and wherever they are.

By The Star (By SURAJ RAJ)

PHNOM PENH: TM International (Cambodia) Co Ltd (TMIC) yesterday rebranded its cellular operation and expected the company to continue registering strong growth in subscribers.

The new brand identity, hello, will spearhead TMIC’s aggressive move to increase capacity through the setting up of more base stations throughout Cambodia and revamp its distribution network by introducing more hello points there.

The hello point is modelled after Telekom Malaysia Bhd’s TM Point in Malaysia.

“The launch of the new hello identity is not only important but necessary to bring the brand to another level of business excellence,” said TMIC chief executive officer Yusoff Zamri.

Minister of Ministry Posts and Telecommunications of Cambodia (3rd from right) unveiling the new brand identity ‘hello’. Next to him is Dato’ Yusof Annuar Yaacob, CEO of TM International and Ir. Prabahar Singam, Director of TM International Cambodia (right).

“The change is timely to inject a fresh approach into the company as this marks the second year that TM International acquired full ownership of TMIC,” he said.

TM International bought 49% of TMIC from Thailand’s Samart Corp to fully own the Cambodian cellular company.

The rebranding encompasses not only a logo change but also an investment of US$150mil in the next two years to upgrade TMIC’s network capacity and add 500 base transceiver stations for increased coverage in rural and urban Cambodia.

The expansion would see TMIC having close to 800 base stations, and bring its cellular service to 80% of the country’s population.

The company invested US$50mil last year to boost capacity to serve 500,000 customers. It had 283,000 customers at the end of third quarter this year.

Yusoff expects subscriber growth, which came in at 50% for TMIC’s 2006 financial year, would grow by an even higher rate in the current year ending December.

In a statement, TMIC said the new identity was also a strategic initiative to move the brand away from the previous shareholding arrangements with Samart.

“It signifies the change that the company is going through and moving forward,” the statement said.

TMIC said 150 frontline staff would undergo intensive training to improve their service delivery, adding that all 700 staff members would be trained by the end of the month.

Eight hello points would be changed and two more would be established by next year. All hello points in the country would be rebranded by next year.

The rebranding also aims to keep TMIC competitive and fresh as it prepares to take on more mobile operators that are expected to enter the Cambodian market as well as grow its current market share of about 18%.

Speaking to the media after the unveiling of the new identity, TM International Sdn Bhd chief executive officer Datuk Yusof Annuar Yaacob said that to increase market share, distribution needed to be fixed and owned by operators.

TMIC has one of the highest average revenue per user (Arpu) of US$9 per customer among the countries in the TM International stable. Its average Arpu is between US$4.50 and US$5.50 per customer.

The penetration rate in Cambodia is 15%.

TM International also hopes to increase its roaming partners to 450 by next year from 181 now.

It is no surprise then that media service agency Zenith Optimedia anticipates Malaysia’s online advertising market to grow 30% annually over the next few years.

The agency has predicted Malaysia’s advertising spending to breach the RM5bil mark this year, of which online advertising is expected to account for 1% or RM50mil.

While the figure for online advertising expenditure may seem paltry to some, Google Inc prefers to see it as a “glass that’s half full”.

Traditionally, marketers allocate their budgets starting with traditional media such as television, print, radio and maybe, online.

Consumer insights tend to change rapidly on the Internet, says Sobel

However, this traditional marketing approach is changing as trends show companies are now allocating their marketing dollars beginning with online followed by other forms of media, says Lori Sobel, Google Southeast Asia head of sales.

“One of the key reasons they are doing this is the ability to test different messages based on consumer insight and feedback from the Internet,” she tells BizWeek.

Consumers, Sobel says are consuming information from multiple different sources. “As a marketer, we need to make sure we are giving consistent messaging wherever consumers are looking for information.”

“That’s the beauty of the Internet and online advertising, you can continually test what messages work best and what does not. You can’t really do this with traditional media,” she says.

Sobel points out that marketers should also continuously test the market because consumer insights and trends can change rapidly.

“Online advertising allows customers to ‘pull’ relevant marketing messages at the moment they demonstrate strong interest when they are searching for information or browsing their favourite websites. “

“This is the exact opposite of traditional advertising, which ‘pushes’ out marketing messages, sometimes in intrusive ways, based on customer demographics and reach,” she says, describing the trend as two-way interaction between consumer and marketer.

With online advertising gaining more traction, could this mean traditional marketing channels are going to become sterile? Sobel says it will not be the case.

“Online advertising is becoming a bigger portion of the media mix, but other media outlets still have a bite. Consumers are looking for information in multiple sources, so what’s going to be more important is for marketers to get their messages across through multiple touch points,” she says.

Sobel says companies should not only focus on converting ads into sales but also recognise that consumers may be going to the Internet to research information but make their purchases offline.

“Some companies, especially financial and automotive firms understand the importance of an integrated marketing approach. Companies that have grasped this know that a sales cycle exists,” she says, adding that these marketers know they have to get in front of consumers at all different stages to influence the purchase decision whether offline or online.

Ultimately, the growth of the local online and mobile advertising markets will be dependent on broadband and mobile penetration rates.

At present, Malaysia’s broadband penetration rate stands at 12%, although the government intends to boost this to 50% by 2010.

But Sobel reckons mobile advertising may become a reality sooner than we think given Malaysia’s high 85% mobile penetration rate.

“We already started testing mobile ads in Singapore. We recognise that the number of mobile users is increasing and some people skip the personal computer phase.

The trend is clear that more and more people are searching for information on the go, so our platform is a natural extension that’s going to be offered on Google for mobile,” she says.

By The Star (By Suraj Raj)

Now along comes a contrarian viewpoint which is based on what the writer describes as “spending time with consumers in the real world, where and when they actually engage with media” conducted in the test market area of Columbus, Ohio.

This poster accompanied the durian

While much of the article by Rick Milenthal, CEO of Engauge, (a marketing services agency) may sound obvious, perhaps in our search for enlightenment we may overlook their inherent value.

For instance, he says that consumers “don’t think in terms of media when they are actually experiencing it” but rather on what they want or to get out of it. That means if they are in a state of mind to be entertained, it’s entertainment they want; or if seeking knowledge, then they want information.

To succeed in your marketing goals, Milenthal says, you don’t need to focus on the media but learn to craft messages in tune with the mindset of the consumer and become a part of that experience.

“The rules have changed. We must match our message with the mode (mindset). No one wants to be disrupted with informative messages when they’re in entertainment mode – it’s jarring and off-putting,” he adds.

Milenthal goes on to outline six of the relevant modes as follows:

Entertainment, where people want to be amused, well served by traditional media with TV in front.

Information seekers look for knowledge to make an informed decision. Newspapers, catalogues and online serve this need.

Discovery mode is when the consumer is on the lookout for something new, be it a recipe, new vehicle or a vacation destination.

Connecting mode describes people who are building or maintaining relationships. Think email, texting, online gaming as the popular choices.

Sharing is like connecting with the addition of video or image sharing sites where millions of people can have access.

Expressing mode is best demonstrated by blogs, vlogs or podcasts.

Finally, Milenthal cautions that if we want to succeed, we have to stop shoving irrelevant, ill-timed content down people’s throats ? aligning the message with the mode will determine whether our messages make it into consumer consciousness.’

Taking these points to heart, could it mean that the single campaign idea generally tweaked to fit in with the different media used may have to be re-examined and lead to the resuscitation of our flagging production industry?

I can well imagine that a solid campaign would require shooting a commercial with entertainment in mind; another that’s pitched around information; a re-worked version for new media and so on.

On the home front, let me end with an accolade to the people who developed the idea behind the call for entries to the Direct Marketing Association of Malaysia awards.

In addition to a large size poster, I received the (dubious) gift of a durian in a gunny sack at the office which certainly turned a few heads, not to speak of noses.

As an attention-grabber, the gimmick worked and the conceit as fleshed out in the poster did its job too while I have my reservations about retreating to the safe and tried idea-as-light-bulb visual treatment.

By The Star 

BRANDING has come a long way in Asia where managers used to be preoccupied with assets and focused on trading and low-cost mass production.

The concept is slowly and steadily making its way into Asian boardrooms, with companies taking their cue from their more mature counterparts in Japan and South Korea.

If previously chief executive officers (CEOs) and managers viewed it as part of a marketing function, they are now beginning to include branding as an integral part of their overall corporate strategy.
Brand strategist Martin Roll said that many Asian CEOs have become aware that brand drives value and are beginning to see branding as a strategic asset.

“Previously, many Asian managers saw branding as something very tactical and something with a cost.

“Now, many CEOs in Asia are showing interest in branding compared to five years ago,” he told Business Times on the sidelines of the Global Brand Forum in Singapore recently.

The forum, in its fourth year, was organised by the Singapore-based independent organisation, Global Brand Forum. Media Prima Bhd was one of the event’s co-sponsors.

Roll, the CEO at strategic branding advisory firm VentureRepublic, said Asian companies have focused a lot on large-volume manufacturing which generates small margins, and not so much on innovation.

This obsession with tangible assets such as machinery and warehouses has made Asian companies reluctant to invest in intangible assets like branding.
He said branding is much more strategic because for businesses, the average book-to-market value is between 3.5 and 4. This means the tangible value of branding is increasing.

“In the US, a third of a company’s budget is allocated for pushing the brand, while most Asian companies are still volume-oriented.”

Roll, who authored the “Asian Brand Strategy“, said branding must be dealt with at the boardroom level, with the CEO leading the brand strategy efforts.

He said Asian CEOs and managers require a mindset change, such as from being manufacturing-driven to being branding-driven; original equipment manufacturing to trademarks and intellectual property; sales perspective to branding perspective; and market share to brand equity.

He said the pressure for the paradigm shift in Asia would come from the market, especially when cost was no longer a competitive advantage.
Today, the value of branding is measurable.

“You can measure the return on investment, the brand equity and price premium.

“Ten years ago, branding was much harder to measure. But a lot of different tools and methodologies have been developed and it is now much easier to measure the value of branding.”

Roll said studies have shown that strong brands constitute 37 per cent of a company’s market capitalisation.
Harvard Business School senior associate dean John A. Quelch said companies with global brands have lower marketing cost; efficient procurement and supply chain; lower cost of entry; less administrative complexity in different countries; and faster distribution access for new products.

Brand experts are in consensus that it takes between three and five years to build a brand, while it takes decades to build a global brand.

Roll and Quelch said a brand could not be expected to become globally recognised overnight.

They, however, are optimistic about the emergence of many global brands from Asia in the future.

Quelch, who is the author of several books, including “New Global Brands“, said that most of the global brands from developed countries took decades to develop and involved a huge amount of investment, marketing and planning.

He said a study on Top 10 global brands conducted this year indicated that eight were from the US, despite the country making up 30 per cent of the world’s gross domestic product.

In another study, it was found that 50 out of the Top 100 global brands were from the US, while eight were from Asia.
“But this is going to change in the next 10 to 20 years when more global brands will come from Asia,” he said.
He noted that there are many Japanese brands, such as Toyota and Sony, which were not considered high quality 40 years ago, but are now among the best and most valued global brands.

He also cited the success of South Korea’s Samsung, which transformed itself from being a manufacturer of cheap television sets to one holding a premium position and a global brand in its own right, all within the past seven years.
“The principle of building a global brand is as applicable in Asia as they are in the developed world,” Quelch said.

Roll, meanwhile, anticipates that some 40 to 50 strong Asian global brands will emerge and compete head-on with Western brands in the next 10 to 15 years.

He also said that it is important to ensure the sustainability of efforts in building a brand, regardless of whether there is a change in the CEOs of companies.

“One of the studies has shown that 80 per cent of the value of the brand comes from cash flow from the future, while only 20 per cent of the value of your brand comes from the first three years of your cash flow.”

Roll has some advice for the small- and medium-sized companies.

“Don’t define yourself as being small, but define yourself as new, or else you are going to be killed.
“Be very, very bold. Be a winner,” he said, adding that a positive mentality goes a long way.

Roll said Asia has a lot of potential to create many “true brands”, especially when the Asian economy is doing well.
“You should repair the roof when the sun is shining,” he said.

By New Straits Times (By Hamisah Hamid)

Net profit for the nine months to September 30 2007 jumped to RM78.6 million from only RM37.3 million in the same period last year.

The group’s pre-tax profit also surpassed the RM100 million mark for the first time to hit RM101.8 million, a 98 per cent increase from RM51.4 million posted previously.

Media Prima recorded strong growth in revenue of 27 per cent to RM492.3 million as compared to RM387.8 million recorded in previous corresponding period.

“The higher revenue is due to higher advertising revenue arising from the 50th Merdeka celebrations, strong contribution from TV9 and recently acquired outdoor companies, together with significantly higher revenue recorded by Radio Networks,” group managing director and chief executive Abdul Rahman Ahmad told reporters at a media briefing in Petaling Jaya yesterday.

“Our aggressive expansion strategy into new media platforms coupled with the successful execution of strategies to attract new non-traditional advertisers have started to really bear fruit as reflected by the strong growth in revenue and earnings,” he added.

During the current period, Media Prima’s TV Networks (TV3, 8TV, ntv7 and TV9) maintained their leadership positions by collectively capturing 53 per cent share of television viewership against 49 per cent captured in the previous corresponding period.

Abdul Rahman was optimistic for the rest of the financial year and expects advertising spending to continue growing with increased consumer and client confidence from the positive economic effects arising from the Ninth Malaysian Plan.

“We are also excited by the development of our new online media which we hope will be another major value driver in the long term,” he said.

Media Prima recently launched its new online strategy with revamped television network web portals that provide free access from recently aired television programmes as well as launched a new entertainment and lifestyle portal, gua.com.my.

Future offerings include pay per download and subscription based television content delivered through web that leverages on Media Prima’s huge library of television content.

The group is also optimistic that it will be able to maintain its industry leadership position and future earnings growth through continued investment in quality programming, branding and prudent financial and risk management.

Abdul Rahman also said the group is looking to acquire or form a partnership in another radio station.

Meanwhile, on Media Prima’s plans to list TV3 Networks Ltd, Ghana’s leading private TV station, on the Ghana Stock Exchange, Abdul Rahman said it may happen sometime in 2008.

By New Straits Times (By Rupinder Singh)

Online advertising has been touted as the next cash cow for the Internet revolution. Making this trend a reality, advertising dollars have been migrating — fast — from traditional media platforms like television, radio and print to computer screens.

ZenithOptimedia, one of the largest media buying agencies in the US, forecasts a 28% rise in online advertising worldwide, in comparison to 3.7% growth in all other mediums. This year, companies will have spent a record US$31 billion (about RM103 billion) to advertise anything from cars to lipstick on the Internet, supporting the revenue of numerous news sites, blogs, social networks and others.

While there is solid evidence that the trend for ad spend is shifting in developed countries, online advertising is still in its premature stage here in Asia, aside from South Korea and Japan. This is due to several reasons including broadband penetration rates, consumer readiness and lifestyle. Yes, many of us probably use the Internet a lot in our daily lives but there are many instances whereby the online ads displayed on our screens aren’t relevant to us. Figures from Nielsen Media Research last year revealed that print and television still dominate the RM2.2 billion total ad spend in Malaysia, with a 61% and 28% share respectively. These numbers are telling — Malaysian advertisers are still not seeing much value in online advertising and are not really ready to pay for virtual “space”.

Considering all these issues, coupled with the challenge of unique cultures and demographics, how do you boost online advertising and offer customised and targeted solutions in a region as diverse as Asia? Lori Sobel, Google Inc’s head of sales for Singapore, says this is the reason why the company plans to open offices in different countries soon, with Singapore being its operational hub in Southeast Asia.

Sobel: Customers are spending more money on online advertising and they are actually coming back!

“We meet marketers and advertisers in different markets to help drive their purpose. We have also been localising our offerings; for instance, Google Mail, Google Maps and Google Earth will soon be available in local languages. This is happening as we speak and it will help the evolution of online advertising in Southeast Asia. Customers are spending more money on online advertising and they are actually coming back!” she says.

Online advertising offers marketers and advertisers instant results, says Sobel, as Google offers tracking and reporting services along with the ad space. Advertisers will be able to know how many times their ads have been displayed and viewed, and the demographics of the viewers. “Advertisers have specific demographics that they are targeting and Google has an expressed interest in this area. We have a whole different model. With two-way conversations between the advertiser and the consumer, marketing messages can become more targeted,” she adds. That may be so, but Google’s rivals, MSN Live, Yahoo! offer the same services.

Don’t bank on social networking
While many players in the Internet space believe that online advertising will be what drives revenue in the future, social networking players are not as convinced. At the recent MIPCOM 2007 in Cannes, France, industry experts concluded that social networking sites should not bank on online advertising as the key revenue contributor. This is surprising because following the traditional advertising rule of thumb, advertising dollars go where the consumer eyeballs are. The sheer volume of people who actively use social networks run into the millions worldwide from all walks of life and is growing rapidly by the day. And with their personal details, habits and behaviour openly available, should this not be a mecca for advertisers?
“The business models are still being defined. A lot of them are ad supported right now. We have Orkut, Google’s social network, and we are partners with MySpace. This is a unique opportunity for brand marketers as social networking is estimated to be worth US$2 billion by 2010. It is still in its early days but the sheer volume of users that marketers can leverage on is amazing because millions of users spend hours on these sites. I believe this trend is here to stay,” says Sobel.

Still, there are concerns that there are too many players out there who are competing for a piece of the online advertising pie. Also, South Korea’s Cyworld, one of the most lucrative social networking sites in the world, generates most of its revenue from small value-added services and items. Cyworld offers basic functions for free but should the user wish to add cooler items to their page, they would need to pay for them. Seemingly, this works because Cyworld generates an average of US$200,000 per day from its users. And this is the way forward, according to social networking site owners.

Considering the issues that surround online advertising, what would perhaps work in Malaysia is mobile advertising. Seeing that the country has mobile penetration rates of over 80%, this would likely be an avenue that advertisers cannot ignore. “We have not introduced mobile advertising services in Malaysia yet but we are currently testing it in Singapore and we are seeing great results. Google’s mobile advertising is not location-based; it is Internet-based, accessed through GPRS or high-speed mobile data service,” Sobel explains. As the service is not location-based, users will not be hit by expensive triangulation charges. There is no time frame as to when the mobile service will be introduced in Singapore or Malaysia.

By The EDGE (By Toh Mei Ling)