What are the Major Challenges in the Malaysia Online Advertising Market?
The major challenge to this
industry has been a shortage of skill, most of the c level positions in the
industry are occupied by expats and even at the lower levels it is difficult to
fill the positions on an urgent basis. The lack of training and education in
this sector has Lack of the right in-house skill sets and expertise. Compared
to the level of development of the country, Malaysia still lags behind in terms
of digital infrastructure. Due to the availability of large number of
advertising agencies in Malaysia, it is difficult for the agencies to retain
their clients due to stiff competition. The agencies compete in terms of
charges or rates, unique services such as brand reputation management, web
design and app marketing and others. The agencies need to bring creative ideas
and customized service in order to increase the client retention rate in the
market. High expectations of the
advertising agencies in terms of ROI in short period of time creates another
hindrance in Malaysia
Online Advertising Market. Generally, advertising industry takes long
to payback the investment or generates ROI. But it has been observed the
advertising agencies in Malaysia are keen to generate ROI in short span due to
the fact that their customers are heavily investing in digital marketing and
want to see results. Limited talent and expertise of advertising agencies is a
big challenge in the market. Malaysia advertising market is dominated by
traditional mediums such as T.V., newspapers, radio and others and digital is
Competitive Landscape in Malaysia online advertising Market
The overall competition stage of
the industry has been a ~ in terms of advertising spent and market share of
major platforms with the presence of large number of small agencies and
platforms in 2018. Few of the major advertising agencies include Omnicom, IPG
Medibrands, Publicis, Dentsu, Group M and many others. The major parameters on
the basis of which the advertising agencies in the market compete with each
other are revenue generated, number of full time employees, and number of
active clients, client retention rate and the major clients along with pricing.
These have helped the major advertising agencies to assemble higher market
share during the review period. The online advertising platforms are competing
with each other on the parameters such as market share, users, time spent on
platform, gender profile users, brands or clients, age group and others
What is the Future of Online Advertising Industry in Malaysia?
The Malaysia online advertising
spent has been anticipated to grow registering a moderate growth during the
period 2019 to 2023E with a CAGR of close to ~% in terms of advertising spend.
This advertising spend will be supported by the increasing number of internet
users which is expected to grow with a CAGR of close to ~% during 2018 to
2023E. Growth during this period is expected to be supported by the rising
number of smart phone users, increasing usage of social media networks, well
developed digital infrastructure, diversifying services portfolio and others.
Increase in literacy rate would supplement growth in the market. Due to the
expansion of the already existing advertising agencies and the establishment of
many other agencies, the penetration percent of the online advertising will
increase in future. Many new services and new technologies are expected to be
launched in the forecast period having a positive impact on demand for online
ads. The increasing number of international brands in Malaysia would have a
combined effect and increase the number of online ads with during the forecast
period. The future share of medium of online advertising such as desktop and
mobile in the Malaysia online advertising market is expected to change in favor
of mobile by 2023. The scenario is improving for mobile ads because of the
increasing usage of smart phones and low cost incurred in mobile advertising.
With the increase in the time spent
on internet, higher awareness among the people due to high literacy and
increasing number of social media users, the penetration rate of the brands
into online advertising market is expected to increase in the future. Due to
this, there would be an increase in the conversion rate, which is anticipated
to grow at a CAGR of ~% from 2018 to 2023. The penetration of the internet
users is expected to rise by ~% in 2023. This rise in the internet users is due
to establishment of robust digital infrastructure that enables for fast
downloading and high speed broadband networking in Malaysia.
In addition, increase in the number
of players in different sectors in Malaysia will encourage brands to go for
digital advertising in order to cope with the competition.
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Ken Research
Ankur Gupta, Head Marketing & Communications
+91-9015378249
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