ASIA-PACIFIC – SEPTEMBER 2011: Barney Loehnis, Ogilvy & Mather Asia Pacific Head of Digital, shares with adobo his thoughts on three often-quoted statistics about the Philippine digital landscape and why it important to look deeper into the numbers.
I recently attended the excellent Internet and Mobile Marketing Association of the Philippines (IMMAP) Summit in Manila. I always enjoy how the Philippines organizes the best industry conferences in Asia. It feels, more than any other market, like a real community.
However, one thing stood out this year, which I feel compelled to comment on: there was too much apology around some key digital penetration and usage “figures” as if they were legitimate justifications for not accelerating investment online. These figures seemed to hang in the air unchallenged. So let me put these statistics into a regional and global context, so that no minister, no CEO and no marketer can use them as an excuse for not investing now.
“Only 30% of Filipinos are online.” When I left the UK five years ago there was 30% penetration and investment in digital was booming. It is more important to segment your audience and understand how important is the connected 30%? How much do they drive opinion and lead sales of my product? How do they use the internet and phones to manage their lives and inform them of new products and services? 30% is equal to 30 million voting and buying Filipinos. 30 million is more than the population of Australia, Singapore, Hong Kong, New Zealand and Mongolia put together. That seems like an attractive audience to me.
Even the Secretary of Communications, during his fascinating review of Philippines 2.0 used this penetration number as an excuse for the government not to invest more. This figure should send alarm bells ringing through the corridors of government. 30 million people accessing eGov services poses huge cost benefits and savings opportunities. It is far easier to make small and incremental investments in eGovernment than wait for everyone to get online.
“Smartphone penetration is just 5%.” This does sound quite low – so what other benchmarks do we have? Should that be an excuse for not thinking about how to develop innovative customer services on smartphones? Absolutely not. It’s the same as Japan: and that hasn’t stopped Japan developing and embracing mobile marketing – nor Korea whose smartphone penetration was only at 8% in 2010. Marketers must remember that communications and services need to be “remarkable”; so, the absolute penetration figures of smartphones are not as relevant as the positive buzz that can be generated by leading innovation. Push existing technology to its boundaries and use emerging technology as a flagship. 5% is a good number, and a perfect number to build flagship services from.
“Only 20 million consumers have debit cards and only 5 million credit cards…” so the market is not mature enough for e-commerce. What retailer have you ever heard complain about a potential customer base of 25 million customers? In China 20% of e-commerce is done via cash on delivery to the delivery company, and then credited back to the retailer, not through credit cards. A lack of bank card penetration is not letting China hold it back from delivering the benefits of e-commerce to consumers. As China discovered there is a vast market waiting to engage with e-commerce. Develop the rights services and people will come.
The only number which shocked me was that only 1-3% of marketing budget is allocated to digital. This number lags the time spent online by core audiences by about 20%. This discrepancy says to me that senior marketers are willfully performing their roles at 20% below the optimal efficiency. For me, that is the true wake up call.
So what I really wanted to say to the wonderful marketing community in the Philippines is: wake up and smell the roses – other nations would kill for those vital statistics. As you budget for 2012 be bold and ambitious to give your brands competitive advantage with connected consumers.
