Perspective... This was supposed to be digital's moment. So why aren't budgets shifting?

Of course, nobody wanted to say this was digital’s time. Such gloating would seem insensitive at a time when most agency CEOs were wondering how they were going to pay people. The most common answer was that digital would fare ‘less worse’ than other media.

The logic was impeccable. Every time there’s a downturn, budgets shift into response-driven media as marketers hone in on short-term objectives. So digital should be the natural beneficiary. Only, it doesn’t seem to be happening. Figures for the first quarter in Hong Kong shows digital taking in only four per cent of budgets. In Singapore, some media buyers put it at just two per cent. These should be two of the most digitally advanced markets in the world - small geographies with excellent infrastructure and high web penetration.

In China too online advertising is hardly soaring. Recent figures show Q1 spend was flat on Q4, while the one cloud on Tencent’s otherwise stellar Q1 performance was its ad revenues: down 30 per cent quarter on quarter and up just 1.4 per cent year on year.

Obviously there are some brands spending big on digital, and anecdotal reports suggest some others are raising their allocation from the five per cent to the 15 per cent mark. But they must be outweighed by a huge number of advertisers spending next to nothing.

That feeling is borne out when you speak to digital agency CEOs. “I’ve almost given up thinking that it ever will happen,” said one despondently. The mood at next month’s ad:tech Singapore is likely to be far gloomier than last year, when the digital ‘confidence gap’ still seemed bridgeable.

Where exactly is the digital world going wrong? All the old issues haven’t gone away - inertia within companies, a poor sales job by media owners and middle-aged marketers who are still wondering what all the fuss about Facebook is. Yet those challenges have been met in other markets and conquered. Perhaps more important in Asia is that digital is still sold as a display, rather than a response, medium. For all the talk of tracking and effectiveness, few brands invest seriously in them. And because the internet has not taken off as a revenue channel for brands in the way it has in the West, there is less ‘hard’ sales data to help its cause.

Now there may even be a new issue as traditional media rates come down. Why bother experimenting when you can get the same reach you had before for a fraction of the cost? One senior digital executive told me recently: “At the moment clients aren’t wasting their money by spending on TV.”

“It will happen.” “It has to happen.” “It will happen with mobile.” These remain the mantras of the digital sector. They may be right, but don’t bank on it happening any time soon.

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