Thursday, July 11, 2019

Pakistan Digital Media Advertising Growth Among World's Fastest

Rapid growth of broadband access in Pakistan is changing the country's media landscape. Digital advertising revenue is forecast to grow by 32% in 2019 to Rs. 10.8 billion ($103 million), 12% of total national advertising revenue (NAR), according to Magna Advertising. Digital marketing expert Lars Anthonisen believes Pakistan is quickly becoming a "digital first country". Anthonisen sees "new opportunities for brands to reach and engage with consumers who may have previously been overlooked". Overall ad spend in Pakistan is expected to rise by 15% in 2019 to Rs. 88.3 billion ($840 million) following a steep decline (-11%) in 2018, according to a Branding in Asia report. Growing availability of smartphones, tablets and mobile broadband is extending the reach of advertisers to digital media where it is possible to precisely target prospective customers.

Return to Media Growth in 2019: 

Magna expects to see a return to growth in Pakistani media revenue in 2019, with television, which makes up two-thirds of total NAR, benefitting from the 2019 Cricket World Cup (+15%), according to a Branding in Asia report.

In 2018, Pakistan media industry went through a major shakeout after a long period of rapid double-digit growth since the turn of the century. Hundreds of journalists and other staff lost their jobs last year.  It was a horrible year for Pakistani media industry which saw steep 11% decline in revenue during the year.

2019 Advertising Growth Forecast. Source: Magna
Digital Advertising Growth: 

Digital advertising is forecast to grow by 32% to Rs. 10.8 billion ($103 million), 12% of total national advertising revenue (NAR), according to Magna Advertising. Digital marketing expert Lars Anthonisen believes Pakistan is quickly becoming a "digital first country". Anthonisen sees "new opportunities for brands to reach and engage with consumers who may have previously been overlooked".

Growing availability of smartphones, tablets and mobile broadband is extending the reach of advertisers to digital media where it is possible to precisely target prospective customers. As of May 2019, there are over 70 million broadband subscriptions in Pakistan and more than a million new subscribers are are being added every month, according to data from Pakistan Telecommunication Authority  (PTA).

Pakistan Telecom Indicators. Source: PTA

Overall Media Market: 

Print and radio are likely to grow as well, now that the initial shock of the government’s strict reforms has worn off and a preliminary IMF bailout agreement has been reached. Digital formats, particularly social (+39%) and video (+31%), will continue to see the strongest growth, +32% to Rs. 10.8 billion ($103 million), 12% of total NAR.

The ad spend in Pakistan is expected to grow by 15% in 2019 to Rs. 88.3 billion ($840 million) following a steep decline (-11%) in 2018.   In 2018, Pakistan media industry went through a major shakeout after a long period of rapid double-digit growth since the turn of the century. Hundreds of journalists and other staff lost their jobs. At least one TV channel, Waqt News, was closed while several others downsized. While such consolidation was long overdue after nearly two-decade long period of explosive growth, the PTI government's decision to reduce advertising budget, which constitutes nearly a quarter of all ad spending in the country, appears to have been the main trigger. Those affected by consolidation are accused the government of exercising press censorship by cutting its ad spending.

Pakistan Broadband Growth:

As of May 2019, there are over 70 million broadband subscriptions in Pakistan and more than a million new subscribers are are being added every month, according to data from Pakistan Telecommunication Authority  (PTA).

China is aggressively pursuing its plans to build a global digital superhighway that runs through Pakistan. This "Digital Silk Road" involves laying fiber optic cables in Pakistan which connect with China to the north and link with Africa and the Arab World via undersea cable to be laid from Gwadar Deep Sea Port built as part of China-Pakistan Economic Corridor (CPEC).

A 820-kilometer long China-Pakistan fiber optic cable has already been laid between the city of Rawalpindi, Pakistan in the south and the Khunjerab Pass, China in the north  and operational since July, 2018.

By 2020, the 6,299 kilometers of underwater cables will extend to Djibouti from Gwadar and form the Digital Silk Route between Asia and Africa. At the same time, a space-based Silk Road will provide satellite navigation support to all BRI (Belt Road Initiative) countries. The first Beidou base station of the Space Silk Road is already operational in Pakistan since 2017.  BeiDou is making rapid progress with 30 BRI countries already linked up.

When completed, the ambitious global initiative would use an exclusive satellite navigation system, BeiDou, fiber networks and 5G on land and submarine cables to create a multi-dimensional digital mega-project across land, sea and space.

Summary:

Rapid growth of broadband access in Pakistan is changing the country's media landscape. Digital advertising is forecast to grow by 32% to Rs. 10.8 billion ($103 million), 12% of total national advertising revenue (NAR), according to Magna Advertising.  Digital marketing expert Lars Anthonisen believes Pakistan is quickly becoming a "digital first country". Anthonisen sees "new opportunities for brands to reach and engage with consumers who may have previously been overlooked". Magna expects to see a return to media market growth in 2019, with television, which makes up two-thirds of total NAR, benefitting from the 2019 Cricket World Cup (+15%), according to a Branding in Asia report. Growing availability of smartphones, tablets and mobile broadband is extending the reach of advertisers to digital media where it is possible to precisely target prospective customers.

Related Links:

Haq's Musings

South Asia Investor Review

Pakistan Media Industry Shakeout

Digital BRI: China and Pakistan Building CPEC Info Expressway

FMCG Growth in Pakistan

Is Media Free?

Pakistan Retail Sales Growth

Advertising Revenue in Pakistan

Pakistan FMCG Market

The Other 99% of Pakistan Story

PSL Cricket League Revenue

E-Commerce in Pakistan

Fintech Revolution in Pakistan

Mobile Broadband Speed in Pakistan

3 comments:

Riaz Haq said...

#Pakistan #media media ownership concentrated in a few hands, aided by lax legal restrictions on cross-media ownership. Top 4 news #television channels in Pakistan (Geo News 24%, ARY News 12%, PTV News 11% and Samaa TV 7%) at the end of 2018 was 68.3%. http://pakistan.mom-rsf.org/en/findings/concentration/

Summary of key findings in terms of audience shares:

Television: top 4 TV channels command over two-thirds of all TV news channel audiences.
Radio: top 4 radio stations command over half of the news radio audiences.
Newspapers: top 4 newspapers command over four-fifths of the newspaper audiences.
News websites: top 4 native online news websites command over half of all online media audiences.


top 4 news radio stations in Pakistan (FM106 Gujranwala & Sadiqabad 9.3%, FM100 Lahore 6.2%, FM103 Lahore, Faisalabad and Multan 6% and FM107 Karachi 5.6%) at the end of 2018 was 56.2% (total top 10 radio audience share percentage of 48.2% used as the 100% benchmark). This means 4 of Pakistan’s 209 FM stations with highest audience share have an accumulative audience share of over half of all news radio listenership audience in Pakistan.

The same analysis shows that the audience share for top 4 newspapers in Pakistan (Jang 27%, Express 18%, Nawa-i-Waqt 14% and Khabrain 11%) at the end of 2018 was 80.4% (total top 10 newspaper audience share percentage of 85% used as the 100% benchmark). This means 4 of Pakistan’s 847 newspapers accredited with the Audit Bureau of Circulation with highest audience share have an accumulative audience share of four-fifths of all newspaper readership audience in Pakistan.

The same analysis shows that the audience share for top 4 news websites in Pakistan (dawn.com 4.96%, jang.com.pk 4.22, thenews.com.pk and express.pk 2.72%) at the end of 2018 was 56.9% (total top 10 newspaper audience share percentage of 26.4% used as the 100% benchmark). This means 4 of Pakistan’s native news websites with highest audience share have an accumulative audience share of over a quarter of all news website audience in Pakistan.
Key finding

Media regulations in Pakistan undermine fair competition through unfettered cross-media ownership

Riaz Haq said...

The world of advertising – An overview
BY TAYYAB TARIQ NARULA

https://www.pakistantoday.com.pk/2017/05/28/the-world-of-advertising-an-overview/

Overall, the brands’ budgets are shifting towards digital media at a fast pace and according to Magna Global, an affiliate of the global conglomerate IPG group, it is expected that the digital media spending will surpass TV media spending by 2018

The history of advertising can be traced back to the lost city of Pompeii in 79 AD wherein the advertising messages were found in its ruins. The history of modern advertising starts with the advent of the mediums of mass communication and the first one among them was the printing press. Printing press is said to be the beginning of the European renaissance and enlightenment period due to which people were exposed to the thoughts of the new age philosophers e.g. John Locke, Voltaire, etc. Along with bringing new ideas to the public for enlightenment, it also paved the way for capitalism. In 1472, the first paper bill ads was published by William Caxton for a book and he tacked them to church dooRsSince then, advertising grew with the invention of every new medium of mass communication i.e. Newspaper, TV, Out of Home and Digital.

In 1704, first newspaper ad was published in USA while in 1941 the first TV ad was broadcasted, again in USA. With the advent of cars, out of home advertising became an important medium of advertising. People with a high entrepreneurial spirit found a great opportunity in out of home advertising and even when the government stopped their way, they found creative ways to expand their business. In 1963, the French government put a ban on bill boards, so Jeans Claude Decaux, then a budding entrepreneur, made a deal with the city of Lyons, proposing that he would build bus shelters and keep them clean in exchange for advertising space there. This lead him to create one of the biggest companies in the world in out of home advertising sector having a revenue of more than $6 billion in 2016 and making him a billionaire worth more than $6 billion.

Nowadays, advertising is a huge business because of the rise of transcontinental capitalism. The global spending on advertising for the year 2016 was worth $500 billion, which is more than Pakistan’s total GDP. And if marketing expense is added i.e. market research, public relations, direct marketing, etc, then it makes a total industry of worth $965 billion. Among them, $214 billion were spent on TV and $160.2 billionwere spent on digital, being the two largest mediums. The annual revenue of the Facebook in 2016, which started in 2004 and for the google, the search engine giant, was $27 billion and $89.5 billion respectively. And the revenue model of both of these digital giants only consists of advertising. Among the world’s biggest advertisers are Procter and Gamble, Unilever, L’oreal, Toyota Motor Corporation and Volkswagen.

The world’s biggest advertising markets are US, China and Japan. In US, the multinational companies spend a whopping $180 billion on advertising. The closest market, China is not even half of that. In China, the companies spend 85 billion on Advertising while the next biggest advertising market Japan is again not even half of that with a combined spending of only $38 billion. The other big markets are UK, Brazil, Germany, France, Italy, Australia and South Korea with a combined spending of $140 billion. Interestingly, US spending in advertising is more than the combined spending of the eight countries among the world’s top 10 largest spenders, excluding China. This also represents the strength of the US economy and its high per capita spending as advertising is directly a function of the economy. Whenever the economy performs better, the advertising spending of the companies increases and whenever there is a slump, the advertising sector also faces a downturn.

Riaz Haq said...

#Digital #Pakistan: Increasing digitization and #internet accessibility make Pakistan's e-commerce market one of the fastest growing in the world. Size of #ecommerce market is up by 92% to 99.3 billion rupees ($640.3 million) during the fiscal year 2017-18 http://www.globaltimes.cn/content/1163302.shtml#.XXBF_novZYI.twitter

The number of registered e-commerce merchants was 496 in the first quarter of the fiscal year 2017-18, reaching nearly 1,100 by year end, and was over 1,200 in the first quarter of 2018-19, showing an exponential growth in e-commerce activities in the country.

Pakistan has e-commerce companies in almost every major sector from retail and ride-hailing to property and car purchasing. Benefits such as lower transaction costs, ease of selection of various products while sitting at home, wider selection range, opportunity for making informed purchase decisions based on online reviews and on-time delivery process are the main sources of attraction for consumers, paving the way for the industry to flourish.

Leading online businesses in Pakistan in retail are Daraz, Yayvo and HumMart, whereas ride-hailing services have been overtaken mostly by the global and regional giants Uber and Careem.

Additionally, PakWheels and Zameen are the largest online marketplaces for car and property shoppers and sellers in Pakistan. Among food delivery service providers, FoodPanda is most popular.

The industry has not only helped major players in expanding their businesses, it is also an effective tool for small- and medium-sized enterprises due to low costs and increased accessibility of sellers to customers.

In its efforts to increase the growth and development of the industry, the federal government has recently framed a draft e-commerce policy aimed at achieving higher export growth through enhanced activities from e-commerce platforms, promoting small e-businesses and creating employment opportunities.

The main goal of the policy is to augment the e-commerce industry's growth to make it one of the key drivers of Pakistan's economy.

Though data shows a steady rise in digital transactions and the number of registered vendors, the country's successful e-commerce entrepreneurs believe that Pakistan can learn much from China to further boost the industry, which is still in its infancy, as the latter has an immense knowledge base, experience and advanced technology in this field.

In a conversation with the Xinhua News Agency, Adam Dawood, head of Yayvo, one of Pakistan's largest online retailers, said that China is the world's biggest e-commerce market with annual online sales worth hundreds of billions of dollars.

As a neighboring country, China is eyeing the huge untapped potential in Pakistan, with Chinese e-commerce player AliExpress, part of tech giant Alibaba, recently acquiring Daraz.

"Apart from investment in Pakistan, China has such a big market for products that we could increase our product assortment overnight," Dawood said, adding that there is a lot of learning required in terms of product-market fit, legislation, and route to market that would help Pakistan increase not just the online shopping base, but also the internet penetration rate.

Talking about the challenges the e-commerce industry is facing, Dawood said that Pakistan needs to focus on optimizing overall service delivery and customer experience aspects.

"Our logistics and payments systems need to evolve to be better suited; it behooves the government to pass legislations and cooperate and collaborate with regional players including China to further support and actively promote the digital businesses."

Pakistan needs to encourage Chinese enterprises to explore opportunities in the Pakistani e-commerce industry and join with local start-ups for new business ventures, said Shehryar Hydri, secretary general of the Pakistan Software Houses Association, a trade body promoting and developing software and services industry in Pakistan.