New Delhi, June 03, 2024 (GLOBE NEWSWIRE) -- According to the latest Astute Analytica study, the Southeast Asia digital advertising market was valued at US$ 11.92 Billion in 2023 and is projected to reach US$ 22.15 billion by 2032 at a CAGR of 6.9% during the forecast period 2024-2032.
Digital advertising market in Southeast Asia has been on a significant growth trajectory, fueled by increasing internet penetration, mobile usage, and social media engagement. In 2021, digital advertising spending in the region amounted to approximately $3.68 billion, with projections indicating it will reach $4.7 billion by 2024. This growth represents an annual increase of more than 10%, underscoring the rapid expansion of the digital ad market. In terms of total advertising expenditures, digital advertising accounted for around 33% in Southeast Asia in 2022. This figure highlights the increasing shift towards digital platforms, with Singapore leading the charge where digital ad spending made up over 40% of the country's total ad spend in the same year. The trend towards digital is particularly evident in mobile advertising, which is expected to generate 58% of the total digital ad spending by 2028.
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Programmatic advertising is another area experiencing substantial growth, projected to account for 77% of digital advertising market revenue in Southeast Asia by 2028. This shift is driven by the region's high social media engagement, with users spending an average of 65 minutes per day on social media platforms, surpassing the global average. Among young people aged 16-24, Facebook remains the top choice (26%), followed by Instagram (20%), WhatsApp (17%), and TikTok (13%). Influencer advertising is also booming, particularly in Indonesia, where revenue grew from $26.97 million in 2017 to a forecasted $320.20 million by 2027. This growth is part of a broader digital transformation, with digital ad spending in Southeast Asia aligning with global growth rates, although it still accounts for a smaller percentage of overall ad spending compared to other regions.
Consumer behavior in Southeast Asia is dynamic, with 76% of consumers in 2023 reporting changes in their buying habits from the previous year. This dynamism is reflected in higher e-commerce return rates, particularly for apparel and electronics, where returns range from 15-20%. Video advertising plays a crucial role in this ecosystem, alongside banner, social media, and search ads.
Looking ahead, digital ad spending in Southeast Asia is expected to continue its upward trajectory, reaching pre-pandemic levels and beyond. By 2024, the average ad spending per user in the Search Advertising market is projected to amount to $7.2. Despite digital accounting for 35.3% of total ad spending in 2023, the lowest share globally, this is expected to edge up to 40.4% by 2027.
Key Findings in the Southeast Asia Digital Advertising Market
| Market Forecast (2032) | US$ 22.15 Billion |
| CAGR | 6.9% |
| By Platform | Desktop (42.6%) |
| By End Users | Consumer Goods and Retail Industry (25.1%) |
| By Ad Format | Internet Paid Search (25%) |
| Top Trends |
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| Top Drivers |
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| Top Challenges |
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Internet Paid Search Generate Highest Revenue, Control Over 25% Market Share
Southeast Asian countries are increasingly investing in internet paid search ads as a significant part of their digital advertising market strategies. This trend is driven by several factors, including rapid digital transformation, high mobile and internet penetration, and the growing e-commerce sector. One of the key factors is the high internet penetration and mobile usage in the region. Southeast Asia is home to approximately 650 million people, with a digital economy forecast to triple in size, reaching $240 billion over the next seven years. Mobile is the dominant platform, with high engagement rates, making it a prime target for digital advertisers. Over two billion internet users in the Asia-Pacific region and the forecasted growth of Southeast Asia's digital economy to $240 billion by 2027 underscore the immense opportunity available for digital advertisers.
The rapid growth in digital ad spending is another critical factor. Digital ad spending in Southeast Asia is expected to grow by more than 10% annually, with the region's digital ad market projected to reach USD 50.12 billion by 2029, growing at a CAGR of 15.30%. This growth signifies the increasing importance of digital advertising in the marketing mix of businesses operating in this region. There is also a noticeable shift from traditional media to digital media. Digital forms of advertising have become more popular, surpassing television advertising in 2016 in the Asia-Pacific region. Advertisers are increasingly shifting from traditional media to digital due to higher engagement on major channels, driven by the effectiveness and reach of digital platforms.
The e-commerce boom in Southeast Asia is a significant driver of digital advertising market spend. The growing number of online shoppers and investments from global giants are driving the demand for digital advertising. E-commerce is a key driver, with significant increases in online advertising spend to capture this market. The number of online shoppers is dramatically increasing every month, making e-commerce a fertile ground for digital advertising. Cost efficiency and targeting capabilities are crucial advantages of digital advertising. Digital advertising allows for better targeting and cost efficiency, as seen in the example of a Hong Kong-based retail bank that achieved a 23% increase in card applications and a 22% reduction in cost per acquisition through digital channels. This example highlights how digital advertising can lead to significant improvements in marketing effectiveness and cost savings.
Potential of Digital Advertising in Southeast Asia
In 2023, a Hong Kong retail bank achieved a 23% increase in card applications and a 22% reduction in cost per acquisition through digital advertising. The Google Display Network (GDN) allows ads to reach over 90% of all internet users and more than 2 million sites, showcasing the massive scale and reach of digital advertising. Indonesia, despite underspending on advertising, remains a digital advertising market with significant promise due to its large population and growing digital economy. Singapore is noted for overspending on digital advertising, reflecting its advanced digital infrastructure and high internet penetration rates. Regional growth is expected to propel Southeast Asia to become one of Asia's top-ranking digital marketing markets due to the growing number of mobile users and increasing internet access.
Desktop Ads Dominates the Digital Advertising Market of South East Asia with Over 42.6% Market Share
Despite the rapid increase in mobile device adoption, desktop-based advertising holds significant sway in Southeast Asia. Notably, the number of smartphone users is expected to surpass 326.3 million soon, yet desktop advertising maintains a substantial 42.6% market share in 2023, indicating its continued relevance. The digital advertising market in Southeast Asia is expanding, with mobile ads projected to grow at a CAGR of about 8.2%. However, desktop advertising currently leads in market share, underscoring its dominance. Even though mobile is the preferred device for online video consumption (with platforms like YouTube), a remarkable 95% of consumers in the region also use desktops for product exploration and research.
Video content is poised to account for 79% of consumer internet traffic, and influencer marketing ad spend is expected to reach $977 million by 2027, with influencers wielding significant recommendation power. These trends suggest that desktop platforms, with their capability for detailed content, remain crucial. Programmatic advertising is set to generate 80.46% of revenue within the Southeast Asian market by 2029, and digital ad spending is forecasted to reach $23.40 billion in 2024. Of this, 59.75% will come from digital sources by 2029, highlighting the importance of a comprehensive advertising strategy that includes desktops in the digital advertising market of South East Asia.
Economic growth has led to increased consumer spending, with digital advertising investments surging. Despite varying internet and smartphone penetration rates, social media platforms remain popular, though desktop advertising continues to play a key role due to its established patterns, particularly during business hours.
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Dominance of Digital Advertising by Consumer Goods and Retail in Southeast Asia, Contribute 25.1% Revenue to Market
The consumer goods and retail industry is the largest spender on digital advertising market in Southeast Asia, accounting for 25.1% of the region's digital ad revenue. Several factors contribute to this dominance, supported by various statistics. Southeast Asia's digital economy reached $194 billion in 2022, with e-commerce contributing $131 billion. This sector is projected to surpass $250 billion by 2025, driven primarily by mobile-first internet usage. Digital advertising investment in the region jumped by 64% in 2022, reflecting rapid digital transformation. The overall advertising market is expected to reach $24.59 billion in 2024 and grow at a CAGR of 15.30% to $50.12 billion by 2029.
A significant 95% of consumers use both desktop and mobile devices for product exploration and research, necessitating a robust digital advertising strategy. Video content is anticipated to account for 79% of consumer internet traffic, making it a crucial medium for engagement. Influencer marketing is also rising, with ad spend projected to hit $977 million by 2027. Influencers in the region wield significant recommendation power, enhancing consumer engagement and brand loyalty. As per Astute Analytica, social media platforms are popular advertising channels in South East Asia digital advertising market due to their wide reach and demographic targeting capabilities. Economic growth and rising incomes in Southeast Asia have led to increased consumer spending. The region's growing middle class is driving demand for digital advertising as consumers increasingly turn to online platforms for shopping and entertainment.
Southeast Asia Digital Advertising Market Key Players
- Alibaba Group Holding Limited
- Amazon
- Apple Inc.
- Applovin Corporation
- Baidu
- Dentsu Inc.
- Facebook Inc.
- FLEISHMANHILLARD
- Google, Inc.
- Grey Group
- Havas SA
- Invoke Malaysia
- Microsoft Corporation
- MiQ Digital
- Mirum India
- Nokia Corporation
- Sina
- Smaato, Inc.
- Tencent
- The Interpublic Group of Companies, Inc.
- Twitter Inc.
- Verizon Communications Inc.
- Yahoo! Inc
- Other Prominent Players
Key Segmentation:
By Platform
- Mobile Ad
- In-App
- Mobile Web
- Desktop Ad
- Digital TV
- Others
By Ad Format
- Digital Display Ad
- Programmatic Transactions
- Non-programmatic Transactions
- Internet Paid Search
- Social Media
- Online Video
- Others
By End User
- Media and Entertainment
- Consumer Goods & Retail Industry
- Banking, Financial Service & Insurance
- Telecommunication IT Sector
- Travel Industry
- Healthcare Sector
- Manufacturing & Supply Chain
- Transportation and Logistics
- Energy, Power, and Utilities
- Others
By Country
- Indonesia
- Malaysia
- Thailand
- Singapore
- Vietnam
- Philippines
- Rest of Southeast Asia
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