IDC’s Regional Survey Shows Online Advertising Is Less Effective Than TV Advertising in Asia

Singapore & Hong Kong, June 18, 2008 –IDC announced today the results of a regional survey exploring the use and impact of online advertising in Asia, which showed that Internet ads are seen as informative but often relatively weak in prompting consumers to make a buying decision. The survey, which included both Asian consumers and Asian enterprises, is the second round of a series of surveys that IDC is conducting in 2008 to examine the impact of Web 2.0 on Asian enterprises and consumers.

On average, more than 60% of the consumer respondents said they perceived Internet ads as "informative" - considerably higher than what was seen with TV and print ads. But on the downside, the survey showed that consumers tend to find TV ads more enjoyable and more likely to make them want to buy the product that was being advertised.

“Online advertising has become one of the most important revenue models for many Internet sites in Asia", said Claus Mortensen, Principal, IDC Asia/Pacific Emerging Technologies Research. "But while the Internet offers a huge potential for marketers to target and engage audiences, it is still seen as a very fragmented medium. And while online ads are seen as more informative than ads in other media they suffer from being perceived as more annoying and less enjoyable than TV or print-based ads".

The survey suggested that online video advertising is a good medium to capture the interest of Asian consumers. Almost 70% of the respondents said they had watched video commercials on the Internet and more than 80% said they had watched movie trailers online. And humour is the way to go if companies want consumers to watch their online video commercials: almost 60% of respondents said they would be "highly interested" in watching a commercial if it was funny.

Among Asian enterprises that are advertising online, most respondents indicated that they were doing so because it is seen as more cost-effective and targeted than traditional advertising. But the relatively low impact on consumers' buying decisions indicates that companies may be wasting much of their resources when going online. And while advertising agencies are often seen as necessary go-to-agents for offline advertising, less than 20% of the companies surveyed said they were going online on the advice of an agency.

“Our research indicates that companies will need to be very selective when they choose their online advertising approaches if they are to achieve the full potential of online campaigns - and perhaps agencies could do a better job of guiding them to choose this channel.” Mortensen said.

IDC conducted the survey among Asian consumers in March 2008, and among companies that had previously advertised online in April 2008. The enterprise component was done through phone-based interviews with 302 companies across six Asian markets (Australia, China, India, Korea and Singapore). The consumer component was web-based with 857 respondents across eight markets (Australia, China, India, Korea, the Philippines, Singapore, Thailand and Vietnam).

For more information about purchasing the research, please contact Selina Ang at +65-6829-7717 or sang@idc.com.