Covering the local online market for 2008 and the first half of 2009, the study found that online spend increased its share from 3.5 per cent in 2008 to six per cent in 2009.
Ken Mandel, the chairman of IAB, says that, in the long term, reports like these could help the digital ad market grow faster as companies are able to justify investments.
"The report has created a lot of excitement. The reason is that everyone thought that digital spend in Singapore accounted for maybe three per cent or maybe four per cent, but no one thought it would be six. I think we have reached a very important inflection point and to get from six to ten is not very hard now."
In 2008, the Singapore online market was worth the relatively small amount of US$36 million - about a quarter of the size of New Zealand's. This grew in the first half of 2009, totalling $21.5 million within those first six months. The report argues that by delivering growth during a period of declining advertising budgets, online is proving itself to be a winning medium.
According to Nick Fawbert, the general secretary of IAB, this report could be a "confidence booster for the industry since it has the essence of transparency and accountability that attracts companies." He says that small companies find it difficult to invest in reports like these, so by pooling their resources they have reliable research that they can use for reference purposes.
Barney Loehnis, head of digital of Ogilvy One, thinks IAB has made an interesting effort to quantify an advertising market like Singapore, pointing out the figures on display advertising, which go against the regional trend of growth.
However, he also notes an absence of information on the stage of evolution that Singaporean digital industry is in compared with mature markets like the US and the UK. His wish list includes more information on "mobile, social media and videos", which could help marketers gain insight ahead of the curve.
Arun Kumar, the head of digital at Mediabrands for Asia-Pacific thinks that report is more robust than others that have come out in the market as IAB has managed to get the cooperation of publishers.
"The usage is likely to be macro. It could help marketers to benchmark their spends. For agency heads it could give some broad direction of where the digital industry is headed. However, looking at percentages is not always the most logical way of looking at digital." Going forward he thinks that IAB can add measurements on social media, portals and ad networks.
Varsha Rao, CEO of SingTel Digital Media, thinks that the objective of the report was to develop a baseline, which it has achieved. "We can use this report to educate our customers, clients and advertisers. More information is the cornerstone to grow the market."
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This article was originally published in the 20 May 2010 issue of Media.
