The boom in online social media is expected to lead to an increase of more than 30 per cent in online-advertising spending this year.
The increasing number of people engaged in the social networks and more time being spent online by Internet users are two main factors being used to convince marketers to spend more on online advertising, according to marketing agencies.
The managing director of online advertising agency TopSpace, Kasamart Neerapatama, forecast a 30-per-cent increase in spending on online advertising in 2010. He named three factors responsible for this: the increasing number of social-media users; the increasing total number of Internet users; and the Fifa World Cup.
TopSpace, which oversees online media for top websites including Sanook.com, Hi5.com, Mcot.net and Yahoo.com, claims a 25- to 30-per-cent share of the total online-advertising market.
However, online advertising currently claims only 1 or 2 per cent of total advertising spending.
"Seventy-five per cent of our revenue comes from online advertising, while 25 per cent comes from our consumers," Kasamart said. "This year, TopSpace's revenue is expected to increase by 30 per cent. Last year, Hi5's revenue had flat growth because Facebook.com was so popular that it pulled online-advertising spending away from our customer's websites. This year, we think the online-adverting market as the whole will be vigorous."
The chief executive of interactive agency ThomasIdea, Uraiporn Cholsirirungskul, offered a similar opinion. ThomasIdea provides online strategy consultancy and digital marketing services.
Uraiporn said the popularity of social media and the increasing time being spent online by Internet users was attracting increased spending on online advertising. However, although online-advertising spending is growing rapidly, it is still only about 2 per cent of total advertising spending, she said.
She admitted that the social-media phenomenon was one of the key factors attracting marketing spending. However, she advised that digital marketing should cover every touch point, and not only social media.
Complete digital marketing should meet three main concerns: the brand on the corporate website, playing as the company's virtual head office; the brand in an interactive campaign, as a tool to engage customers; and the brand on the social media, as a viral-marketing tool.
"The social media in Thailand are currently in an initial stage, with many companies learning to adopt them as marketing tools," Uraiporn said. "The social media seem to help companies to spend less for online advertising, but they require dedicated time and effort, and that becomes a company operational cost as well."
