Truelogic Episode 41 Recap: 2022 Wrap-Up Series: Digital Advertising

2022 digital advertising wrap up

It’s been a fast year so if you’re into digital, we thought we’d help make sense of how it’s fared. Continuing our conversation on the 2022 wrap-up, here’s a quick overview of digital advertising performance for 2022.

Podcast Transcription

Berns San Juan: Hi, guys, and welcome to another episode of the Truelogic DX podcast. Once again, it’s me, Bernard. And today we’re going to continue the conversation of our 2022 wrap-up series. And this time we’re going to talk about digital advertising. It’s been a fast year, so if you’re into digital, we thought we’d help make sense of how the industry has fared overall. And in today’s episode, I wanted to share some interesting stats in terms of digital ad performance in 2022.

A lot of the stats, you guys will be hearing from me will come from sources like Statista, the Mask, and Cantar. Let’s have a quick overview.

Digital Advertising in the Philippines

The average ad spend in digital advertising in the Philippine market if you don’t know, is probably around P15 billion pesos per month. So that takes us to somewhere around 43 to 45 billion Philippine pesos every quarter. This ad spend is expected to increase to 1.33 billion. We’re sort of trending up. Now, I think a lot of the market overreacted in Q1 because people saw a decreased trend.

But I think what some people don’t anticipate is that ad spending is usually high, as in November and December, for the same reasons, right? Like holidays, everybody wants everybody’s attention. You’ve got the Big 11.11 and 12.12 sales. And so normally, we see an ad spend budget of over 20 billion pesos in November alone. And then we see that taper down in December, down to 18, 17, 16, by the time that period in the year rolls down.

By far one of the largest winners in terms of growth in the digital advertising segment is search advertising. Its volume is about half of that. So if we’re seeing 15 billion pesos spent on ads, you’re probably looking at about 7 billion, roughly a little over 7 billion per month in terms of search market advertising. In terms of the global comparison, the ad spending in the Philippines is actually, what I would say, half a percent of the US where they spend roughly 261 billion on advertising.

Dominant Channel in Advertising

In terms of publisher performance, Facebook remains dominant in terms of receiving ad spend for publishers, it receives about 52% of all publishing spend. But again, the estimate is that, or remember that take it with a grain of salt, because search advertising specifically on Google probably accounts for almost half a billion dollars.

Digital Ad Performance in 2022

So Google probably accounts for a good spend that isn’t on channels. So let’s do a quick overview of what the digital ad performance was for 2022. And I’ll start with some of the top publishers. In terms of ad spending where brands and companies add money goes, Facebook sort of corners the market. Now remember publishers, Google search is not a publisher and so it doesn’t belong in this category.

But in terms of publishers, Facebook has 56% of the market, which is huge, followed by YouTube, where people spend 23%, almost 24% actually, of their ad budget. Then followed by Instagram, which receives about 13%, and then Twitter, which is immediately 3.5%. So, you know, it could be better. And then after that, it’s the slew of different publishers like Yahoo. Yahoo is a publisher, they’re a portal, and they’re not a search engine. And then Inquirer, ABS CBN, GMA, and Rappler. So to be followed by those that you’re with a fraction of a percent.

In terms of who outspent who in terms of digital, you guys can probably guess, right? Like if I ask who the top ones.. of course, it’s Lazada and Shopee. So the e-commerce market is by far the king in terms of ad spending. So e-commerce is the number one segment in terms of category, followed by brand advertising, which is almost 24%, followed by software ads, right?

So if the Monday.com ads have followed you guys, that’s them. And then followed by games,  media, and other recreation, and then the rest you know is other advertising. Quick note though, a portion of the market that did not use to appear in this report were schools and universities, which account for like a fifth of a percent. But you know, that’s no to me, to me that’s progress.

In terms of which brands were trying to buy for your attention. By far, Lazada is the one that spent the most in terms of being able to get your attention, followed by Shopee, which is behind by only a few percentage points. But Lazada and Shopee both have 8%. Lazada is about eight and a half percent, Shopee spent about 8% so Lazada is about half a percentage point higher, followed by personal ads.

Something of note, Spotify did a lot of advertising in the Philippines, right? So about 1.75% of digital ad spend was done by Spotify. Now the other thing that I found interesting, is Riot Games, they are 1.26% of the market. They have started becoming pretty aggressive this year. I’m not surprised. And then of course there’s ad spending by Grammarly and other software tools.

Digital Marketing Activities in the Philippines in 2022

So there has been a lot of digital marketing activity that has happened in the Philippines over 2022 and I wanted to sort of break it down. But to fit this into 18 minutes, I’m going to focus on two categories specifically, which are search and social media.

Let’s do a quick review first, right? Like the top five categories that are based on ad spend shares. E-commerce is one. Corporate ads are two, software games and then miscellaneous advertising, right? In terms of the winning amount of advertisers, Lazada, Shopee, and others, right? Spotify, Riot Games. And then the top five publishers are Facebook, YouTube, Instagram, Twitter, and then Yahoo, because Yahoo is a publisher.

So let’s talk about search. With the recent backlash against Meta and the plateauing adoption of Facebook… Now, take note, when I say plateauing adoption of Facebook, I mean that the user base is not growing as fast as Facebook would have wanted it to. Especially during the pandemic, right? It continued to grow. Facebook was acquiring 3 million new users every year. It hasn’t done that for 2022. If anything, Facebook will probably plateau at the 73 million user mark.

According to Facebook stats, I think Facebook says there are 83 point-something million active Facebook users in the country. Agree. But I think, you guys and I both know there are several people with more than one Facebook account, right? And so, sure, there might be 83 million Facebook accounts, but that probably only truly represents about 73 million Filipinos and it’ll probably stay at 73 figures for the next two to three years.

Now, of all the social media users, 53% are female and 47% are male. Now, why do I pull that figure in terms of social media? Because 61% of ad spending targets females and 39% targets men. Interesting. I get it, there are more women than men on social media, but 61% of the advertising money goes to female audiences and 39% goes to male audiences. I think as far as channels are concerned, Facebook is still the top social media channel, followed by YouTube at 23%, Instagram at 13%, and Twitter at 2.5%.

Now, let’s compare some of those figures to the search where who has been a big gainer for the year 2022. We saw an increase in the average monthly spend that is allocated to search. Quick side note, I just realized in an ad on GMA that they are saying that their audience size has now increased to 70 million Filipinos, which is probably accurate. They probably really benefited a lot from the collapse of ABS-CBN, like the broadcast arm of the business, ABS CBN used to have 52, and GMA used to have about 40, 44. And so I’m not surprised with the 77 million figure. But let’s contrast that Facebook alone, not even talking about YouTube, and Google search, but Facebook alone, already has about 73 million users. So digital reach for a fraction of the price point is one big thing to consider here. Also considering that you can be fairly persistent when it comes to a digital channel.

While it looks like social media has achieved optimum reach, a lot of analysts are forecasting that the growth for digital advertising will be in search. And if digital advertising continues to stay at about 43 billion, I estimate that it will probably grow higher. I think the estimate is where we’re normally spending 15 billion pesos per month. So about 43 billion, we will probably see it rise to $1.33 billion this year.

That’s not a tremendous amount of growth. Like people might think, “Okay, is that big? Is that small?” That’s actually about an 8% increase. But a majority of what’s worth noting is that Facebook spending has been consistent. A majority of that 8% increase in digital ad spend comes from search.

Now, I try to relate this to the experiences of the Truelogic brand, where I think this year, we probably signed on, I think, maybe 30 to 40 new clients, people that never worked on digital before and people that are doing digital for the first time. And then a lot of our clientele, I would say almost half of them, have expanded their digital advertising spending where they used to only search, now they’re also doing search and social, where they used to do only lead acquisition, now they’re doing e-commerce. So there has been a lot of progress in 2022.

And so while there’s a tethering off in social, we’re not going to anticipate that kind of tethering off when it comes to search. How much of this has to do with the backlash against Meta and whatnot? I’m not going to say, that’s not for this episode’s conversation. But suffice it to say that there’s still a tremendous amount of growth to see in terms of the advertising landscape in the Philippines.

In the next episode, we’re going to talk in-depth a bit more about the 2022 wrap-up for social, specifically 2020 to wrap up for SEO. But for now, I’m going to sign off by saying thank you very much for joining me on this quick episode of the Truelogic DX Podcast. I hope you guys join me on the next episode. Before I sign off, if there are people you want us to join, or you want to bring on the podcast, let us know. If there are conversations you’d like us back to or let us know we’re listening.

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