Yahoo! places big bet on online advertising
By Daxim Lucas
Philippine Daily Inquirer
First Posted 20:42:00 03/02/2008
ACCORDING to industry experts, the local advertising business will continue growing this year, just slightly behind the overall uptrend for ad spending throughout the Asia-Pacific.
But nowhere is this growth more exciting -- and more unpredictable -- than in the realm of online advertising where the country lags far behind its regional peers in terms of total dollars spent.
According to the latest study of the Association of Accredited Advertising Agencies of the Philippines (4As), the total value of the local ad industry stood at $3.08 billion as of the last count.
Of this amount, only an estimated 0.2 percent was spent on online advertising.
This contrasts sharply with the level seen in highly developed markets like Singapore where 7 percent of ad spending went to online and outdoor advertising, with the former taking a significant slice of that pie.
But it is precisely the Philippines’ nature as a largely untapped and underdeveloped market -- and its potential -- for online advertising that has caught the attention of Internet giant Yahoo!.
Last week, the US-based Internet pioneer said it would open a Philippine unit which would allow it to be better position to profit from “the clear uptrend” in local online advertising as well as to help develop the market, at the same time.
“The potential we see here is tremendous,” said Yahoo! strategic consultant Cris Concepcion, who will help run the company’s local operations under general manager and IT veteran Jojo Añonuevo.
Concepcion explained that the local online advertising business, though admittedly miniscule at present, stands to grow by leaps and bounds especially as more Filipinos get their first Internet experience and go online each year.
“We are seeing local Internet penetration grow by 30 percent every year,” he said. “Already, there are over 20 percent of Filipinos online. That presents significant potential for us.”
Given the mixed fortunes Yahoo! is experiencing abroad, it is making a big bet on the Philippine “Internet ecosystem” where the company holds an estimated 85-percent market share, to a large degree due to the popularity of its Yahoo! Messenger online chat tool.
Thus, for the near- to medium-term future, its business strategy for the Philippines would be based on three big multi-year objectives: to make Yahoo! the starting point for the most consumers; become the “must buy” for the most advertisers; be a “partner of choice” by delivering industry-leading platforms for the most publishers and developers.
“[We] will add value to the Internet ecosystem in the Philippines by enabling users, advertisers, publishers and developers to create indispensable Internet experiences,” Añonuevo said.
On top of that, however, the company also wants to gain a significant portion of the advertising pie -- by positioning itself as an indispensable advertising medium -- and thus helping grow the pie further.
The officials explained that they want to ensure that the most effective and easiest marketing solutions are provided to advertisers in the Philippines, including the large brands and the small enterprises.
Finally, the company wants to be a “partner of choice” by delivering industry-leading platforms for most publishers and developers.
To enable developers to make most of its assets -- its technology platforms and data infrastructure -- Yahoo! will deliver industry-leading platforms that are open and flexible to attract the most publishers and developers, the company said in a statement.
“[Our] goal will be to create a motivated community of developers all building uniquely compelling applications that will benefit the Internet ecosystem and provide access to a vast array of highly personalized and relevant services to choose from,” it added.
Indeed, it is a big bet for a big company in a relatively small market. But local Yahoo! chief Añoneuvo has big hopes for the country.
“We believe the online business in this market has a lot of room to grow, and that it can grow to the levels of our regional peers,” he said.
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