Online Advertising on Blogs in Singapore & Malaysia

If you are a blogger in Singapore & Malaysia, you have a myriad of choices in deploying online advertisements other than the standard Google Ads. Most people who have deployed google ads on their blogs will know that they don't earn much from that system for good reasons. First of all, the Singapore market is small and that naturally leads to a small audience unless your blog can penetrate the markets beyond Singapore. Besides, to earn the money on Google Ads, the click through rate must be high. To get a good enough click through rate, you need to get a lot of traffic. That comes to my next point, Asians don't do a lot of click throughs. An interesting article on TechCrunch by Erick Schonfeld recently revealed that click fraud has raised by 15% in 2007 and interestingly one in three clicks is click fraud. In this blog article, I will review the online advertising trends in Singapore and Malaysia based on my observations from the blogosphere. In addition, I will talk about the three companies (Advertlets, Blog2u and Nuffnang) which specialize on online advertising in Singapore and Malaysia. I have experimented each one of them on my blog and will offer some feedback and how these companies can improve.

Trends about Online Advertising on Blogs in Southeast Asia

In this region, most Internet users are from the urban cities, for example, Kuala Lumpur, Jarkarta, Singapore and Bangkok. Hence it is not difficult to localize most bloggers. In each of these cities, they have organized their own gatherings and activities to stay in touch. Specifically to blogs, we can observe a few interesting trends which are happening in Southeast Asia as a whole:

• Cost per Impressions (CpI) and Cost per Visitor (CpV) are preferred measures for both advertising agencies and their clients: Unlike in the US and European market, most Asian Internet users do not have the tendency to click onto an advertisement or convert into a customer for the online ad itself. Any company which want to deploy their marketing online or extend their digital presence have to rely on benchmarking their success on the number of eyeballs their ads get on the cyber real estate. After all, when a blogger starts putting an ad on a blog, he or she is actually opening up real estate for the advertisers to put ad placements. It may be easier to deploy a campaign via an online advertising agency where they directly have relations with the blogger community. The other reason is that the audience for the blogs in Southeast Asia is less sophisticated than their counterparts in the west.
  
• Language creates a fragmented market as a whole for each country: Currently, most online advertising agencies are only looking at blogs in English. However, given the diversity of culture and language in Southeast Asia, the situation is slightly more complicated. It is important to look at the vertical markets based on other languages. For example, in Thailand, tech bloggers (some of them are English speaking expats) converse in English, but there is a significant population of users who may be blogging in Thai. Similarly, with the high percentage of Malay-speaking population in Malaysia and Indonesia, the online advertising companies have not exploited the market segmentation to full advantage. Of course, while trying to conduct a campaign in Thailand, I realized that Google did not have a translator from Thai to English.
  
• The Long Tail effect is not happening yet: In Southeast Asia market, an online advertising company is unlikely to make money via the long tail. It means that the company is better off soliciting campaigns from the multi-national companies who have presence in the region. The reason is that their marketing budgets are higher and hence the online advertising company can get a bigger cut of the revenue. The reason is simple. The online advertising companies has to share their profits with the bloggers who they got to deploy the ads. If the margins are small, the online advertising company will not do very well. If an online advertising company gets bigger accounts from the big brands, they can later move towards the long tail for the local small medium enterprises which may be more skeptical towards online advertising, given that there are not much success stories heard. Even the big Internet companies such as MSN and Yahoo! are only deploying simple banner ads for their clients and have not really started on looking to the long tail of small medium enterprises in the region.
  
• The Exclusivity Model does not work for bloggers in Southeast Asia: Some online advertising companies have tried to get the bloggers to give exclusivity of their blogs to one agency alone. That model is unlikely. Let me sketch out why this is unlikely. Most or all Asian bloggers prefer instant gratification, i.e. they want to get paid quick and they want to be paid as much as possible. It is likely that the bloggers would want to have more ads deploy so that they can diversify the payment rates. For example, a blogger can deploy three ads where the online advertising agency pays at different times. So, it is not sensible for them to give exclusive rights. The problem gets worse when it comes to prominent bloggers who command high traffic. If they give away their exclusive rights (unless they are given better incentives than the rest), the online advertising agency needs to justify why there is a preferential treatment. 

Based on these trends, it may be good to take a tour around Singapore and Malaysia to see how the online advertising agencies specializing on blog advertising works.

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Review of Companies Specializing on Online Advertising in Singapore and Malaysia

In Singapore and Malaysia, there are three companies which specialize on online advertising specifically to blogs. They also have to tackle competition from the multi-national companies such as Yahoo!, MSN and Google, and also regional state-owned media companies which command a huge distribution channel that can easily market an Internet service quickly. Of course, one motivation of this article is to give a sense on how each company handles the blogger from business model to payment system. If you are a blogger, you might want to think about how to go to each of these agencies to deploy ads on your blogs. If you are a client who is looking for an online advertising to outsource or deploy a marketing campaign, this may be a good reference on how these companies use their community of bloggers to spread the word for you. I also advocate bloggers to do their own research (not just from their websites) on how bloggers think about these companies in general.

About Advertlets (from their website): "Advertlets.com is an Asian blog/weblog advertising network that offers the remarkably sensible proposition of targeted, unintrusive advertising that benefits the online advertising and blogger community, as well as their readers."

How does it work for the blogger: The procedure is quite simple. I did it quite quickly. You register yourself as an Advertlets user, get a piece of computer code from them (with a specific size, for example, a banner or square/rectangle ad) and placed it on your blog (either on the blog post or sidebar of the blog). What happens is that the code is automating the advertisement on your blog, and then at the same work out the amount of money that you earn. You can also make a quick buck if you write a review of Advertlets.

Business Model: For the customer, Advertlets deploys your ads through their blogging community. There is a revenue sharing mechanism, where Advertlets will cut part of the advertising money to the bloggers. Of course, they have a Titan program where they get the blogger to give them exclusive usage of their ads only in the website similar to Nuffnang (which I will get to later). To be part of  the Titan program, the bloggers have to be vetted and approved by Advertlets. They also initiate activities to get bloggers to meet up and gather.

Feedback: I have deployed the advertlets code for a while. Other than a major accident that happened in January, there is no major issues with the deployment. During the major accident, the blogs where the ad is deployed caused the readers of the blog to move to another placeholder site. Of course, the problem was rectified within a week. My account has been set up for four months and given that no information is given on how much each ad cost, I worked out that I earned about $0.13 per day. So far, I have seen movie trailers ad and recruit.net ads on my site. What if the ad deployed does not match the flavour or the theme of the blog? So far, I have not reached the disbursement of a payment to me. Hence I cannot tell how efficient the payment is. Since I am not the type of blogger who endorses a service. The other unfortunate thing is that I did not have the chance to attend their activities given that they are in Malaysia. Hence I can't judge their customer service.

What needs to be improved: Depending on where the bloggers are, it is hard for the blogger from anywhere other than Malaysia for meet up. The other thing is what I have pointed out earlier, as a blogger who shares the space with advertlets, it may be good if they can be clear with the earnings, like until how much you can cash out. For example, Google allows the web user to cash out when their earnings reach US$100.

       

About Blog2u (from their website): "Blog2u is a match-making service for advertisers and bloggers; to deliver online word of mouth of products and services from freelancers, agents and even bloggers in the most cost effective method through blogs."

How does it work for the blogger: The procedure is simple. You sign up with Blog2U and if they have an ad for you, they will email you both the code and the instructions for deployment. It is not as automated for the user compared to the other two companies. The ad is usually deployed for a month and can vary depending on the specifications. For example, I have deployed one on my side bar and another for all my blog posts in the month of Feb 2008. 

Business Model: Blog2U adopts an interesting business model that the company match the advertisers and the bloggers (or web communities, given that they can make the same deployment). In some sense, you can see the company as an online marketing company. Once the company gets the marketing advertisement, it goes on a shotgun approach to deploy the ads quickly without any expectation of clicks and referrals. For online advertising in Asia, the company adopts instant gratification and quick penetration to audience to execute a campaign in a short time. Unlike the other two companies, how well you paid is dependent on how famous you are or how high your internet is, Blog2u take away that assumption and deploys it equal to everyone.

Feedback: If you are a blogger who wants instant gratification, i.e. the company pays you immediately when you deploy the ad, then Blog2u is ideal for you. I have done two ads for them, and they have paid me instantly through my bank account. Although the amount is small, the thing I like about the company is the trust established between the ads agency and the blogger. It is good that the company pays you first and trust that you put up the ad. I have deployed one ad wrongly, and the exchange with the manager from Blog2u has been cordial. Of course, the problem is that if you are the type of blogger who have no idea of computer codes (particularly, you are the visual editor type), you may find it difficult at the start to adopt this service.

What needs to be improved: The main part is making the ad deployment easy for the blogger. The deployment requires the blogger to have some knowledge of HTML. If the blogger uses visual editor and have no idea how to put codes on sidebar or blogpost, they will have difficulty on that. One lucky thing is that most Singaporean bloggers I know are computer literates. Next, the follow up to the blogger when the ad ends need to be established. For example, when the blog ad on my sidebar ended in Jan, I am wondering whether I should take down. Of course, I have given this feedback to them and they told me that they are working on that.

About Nuffnang: "Nuffnang.com is Asia’s first and leading blog advertising community. Our online platform allows advertisers to serve graphic or video based advertisements onto the thousands of local blogs that are signed up with us."

How does it work for the blogger:  The procedure is quite simple. I did it quite quickly. You register yourself as a Nuffnang user based on your geographical position (Singapore or Malaysia), get a piece of computer code from them (with a specific size, for example, a banner or square/rectangle ad) and placed it on your blog (either on the blog post or sidebar of the blog). What happens is that the code is automating the advertisement on your blog, and then at the same work out the amount of money that you earn. For Nuffnang, you can make use of their own aggregator to publicize your blog to get more blog traffic. One thing to add, is that Nuffnang is the first to add a program known as Glitterati for bloggers to give them the exclusivity rights to place only their adds.

Business Model: Although they are similar to Advertlets, they also have added the feature where a blogger might be paid by writing a review for a product from an advertiser. The way how a blogger is paid is dependent on the number of ads served on the blog. The blogger needs to reach S$50 such that a cheque payment is disbursed to him. The key thing about Nuffnang is that their model is fitted with a statistical distribution of the internet traffic disbursed through the community of bloggers who are using their service. If you are a prominent blogger, you are likely to get more ads because of your high internet traffic. What happens that if you are a niche blogger (who might not command high traffic)? You might not get any ads. However, as far as I know, most bloggers (including myself) have gotten ads so far.

Feedback: As a blogger with moderately good traffic (depending on the post), I don't have any problems in getting ads served out to me. Of course, that means that if you are a blogger that needs instant gratification, you might get frustrated if you have no ads served to you in a month. I liked the fact that I know the amount of money I received for the ad they have placed on my site. It also gives some sense on my earnings and provide some degree of transparency between the blogger and the ad deployment agency. Of course, having been to one gathering, I have enjoyed meeting fellow bloggers and I think that they have organized a lot of activities to connect and communicate with the bloggers. The follow up on when the ad should be taken down is automated and hence I do not need to worry about when to take the ad down.

What needs to be improved: They need an improvement with their payment system. Being someone who is interested in customer service, I started counting the number of days for their cheque when I cashed out the first time. According to them, it takes about 30 days at most, and I got it on the 34th day. Other than that, the issue of getting exclusivity from the bloggers only works if they have a constant stream of ads which they can serve. Otherwise, given the nature of the bloggers' demand for instant gratification, it is unlikely for them to sign on unless the incentives are there.

A Short After Thought

Of course, it will be interesting to see how far online advertising through blogs would go. I believe that the main competition for the companies I have reviewed comes from the major corporations. In a competitive landscape where the major corporations in Asia still need to be educated more about online advertising and extension of digital presence, these companies need to focus a lot more on having major clients before they can exploit the long tail. Ultimately, their competitive advantage is the relationship that they have with the local blogger communities. It remains to be seen that these companies might venture further than Singapore and Malaysia in Southeast Asia.

Interesting Thoughts and follow ups on the subject:

• Nicholas Aaron Khoo has shared his thoughts about blog advertising with an interesting analogy using outdoor advertising on cars. Do check out his article: Blog advertising is like outdoor advertising on vehicles? He made an interesting point that the online ad agencies can add more value if they can match the bloggers and the clients properly in ad targetting and delivery.
• Thanks to DK and Paddy promoting this article in their blogs. Actually, the exclusivity argument has popped up in many chats between DK and myself during PHP User Group events. DK has presented a stronger  version of the argument against exclusivity than the one which I presented in this article. He based it on the model that if an online advertising company wants to obtain exclusivity from a blogger, the company must paid up all the losses that the blogger accumulated if he or she uses the other online ad agencies. In reality, given that all three companies are start-ups, it would be difficult for these companies to be able to subtantiate those type of losses.
• Is Contextual Advertising on its way out? from TLE entrepreneurs site. In some sense, they based their argument on the current decline of Google stock in the stock market. Of course, contextual advertising will change with the evolution of audio and video ads.

Author's Note: I have met the founders (Paddy Tan, Ming Shen and Josh Lim) and their staff of all three companies but I do not express a preference for anyone since I deployed all three ads on my blog. This article is written after chatting with many bloggers during our gatherings in Singapore. He thanks Preetam Rai and Saumil Nanavati (CEO, Sydus) for some interesting discussions on this topic. I have made an update at 12 noon, 2 March 2008. Thanks to Nicholas Aaron Khoo and Kevin Lim for their comments on the article.

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Comments

[chandani]

This is a really good article.

[Entrepreneur]

This is a great article and carefully laid out, but I have say that I disagree on several points.

(1) I believe The Long Tail effect has reached Asia. It is simply the advertising agencies that have not been able to take advantage of it.

For example, one of the most promising new advertising companies today is PROJECT WONDERFUL which displays ads on an auction basis, with no regard to click thrus. If Asia is notorious for low CTR's and click fraud, this is actually the best method to deploy and not the current format in which all 3 local (Malaysian) advertising agencies are doing it.

(2) COMPETITION is great and anyone wanting exclusivity has missed the point of completely. The fight between Nuffnang and Advertlets reached ridiculous proportions as the two mud-slinged each other while the advertisers laughed. Their juvenile performance showed that immaturity, not just of the founders, but of the entire industry. The presence of COMPETITION is good! It legitimizes and shows there's a market. There are only 2 players, well 3 players now with Blog2U. If advertisers are ever to take the blogging community as a legitimate form of marketing in Singapore, there better be more companies staking a claim.

(3) MNC's and SME's and even really small businesses realize the traffic from the web comes from anywhere and everywhere and won't begrudge you for showing their ad to someone not in your region. What they will begrudge is that no one visits your blog at all and the only eyeball they are getting are yours.

The advertisers are there. They're ready. It's the advertising platforms that are not. Why else will you see so many Singapore ads served on GOOGLE ads? They're not going to Nuffnang or Advertlets or even Blog2U because the eyeballs they reach are so few via those blogs and unfortunately, many of Singapore's most popular blogs tend to be juvenile in nature.

[Paddy Tan]

Hi Bernard, thanks for this article. I am sharing it with my students, friends and our bloggers too. :)

At the end of the day, running a startup be it online or offline business, cash flow is one sinker that can topple even the biggest earning companies as running the business is gonna be a marathon rather than a 100m dash. We are able to pay upfront not becos we get paid by advertisers upfront (that be the best clients to have! hahah!) but we tap onto the experience gained when running BAK2u, to try to efficiently handle the cash in/out of the business.

Many things can go wrong running a startup and especially in such hypercompetitive business environment in the online advertising space. If we grow too fast, running faster than the market before it is ready, it will kill us. If we run too slow than our competitors (and many other standing by waiting for the right chance to strike), we will also kill ourselves. Either way difficult decisions have to be made swiftly.

BLOG2u will not the the newest nor the last company to enter the scene here, which is why before we can dash completely we need to build up the foundation first and learn and unlearn our mistakes that we already started making.

It is such article that will give us a wake up call on what we can do to better improve what we are not doing right and what we can further enhance overtime too.

Thank you,
Paddy Tan

[Anonymous]

I have heard quite a few comments that people have either not received their cheques from NuffNang or Advertlets or the cheques have come unsigned. Still happening till this date. Blog2U doesn't have the same issues though. Guess the business model is a bit different.

[Nic]

Thanks for the nice link Bernard, and coming from a great article too!

I like the objective views you've taken and expressed in this article, it does help put some sense and balance to this often over-heated arena.

The local blog advertising scene is a maturing one and has personally taken me by surprise many times with it's new developments. I personally have had to rethink quite a few of the earlier positions I took as new developments came up.

But end of the day, it's still business. And the fundamentals still remain - maintaining healthy cashflow, delivering customer value, watching your PR, and so on.

[The Singapore Daily]

Interesting point about Asians having lower clickthroughs then their western counterpart. Might this be a case of a lack of targeting on the Advertiser's part and a lack of depth in blog owners' understanding of its readers. Great article Bernard. Thanks!

[ming]

Dear Ice Angel,

It surprised me to see your post here.

As mentioned on the phone, I will reissue you the two cheques we previously sent out. Both were sent out on time, and it confounds me how you have not recieved them, we pride ourselves in delivering all payments as promptly as possible!

Do use our helpdesk to submit queries in the future as it was by chance that I came back to read this thread! It is your money after all! :-)

Best,
Ming

[tokyotribe28]

Great review! Thanks for the article.

[jiinjoo]

On the flip side, I do hope we consider the opposite on certain points above:

1. Maybe bloggers in the region should consider a wider audience, or a niche that spans a wider geography. It's unfortunate that most big corporation that has online marketing budget are segmented by country based business units for legal purposes, and thus they want a geographically focused audience, however I believe all 3 companies mentioned here has the capability to segment the market for them. Think how to beat Google's target based advertising. I find it sad that IDA chose to advertise the National Infocomm Scholarship via adsense instead of either of the company above. Remember to THINK BIG when running a startup.

2. An option away from focusing on the yet to emerge "long tail" is to take a look at the "short head" - D'oh! Homer would say. e.g. onemotoring earns 6 digits in advertising alone annually (sorry can't reveal exact figure) - if you can't beat them, join them - see if your technology can make a 6 digit ad revenue grow to 7 or 8 digit. In fact the so called "major companies" are not ignoring marketing, they are just putting their money at the "short head". See how citibank plaster City Hall MRT in S'pore, or how Digi plaster Happy no every tiang of the LRT in KL? They are practicing it similarly online.

imho, online ad can be much more than real estate - as long as we put it the effort to think about the technology and business model to enable a new dimension.

[ice-angel]

haha.
Nuffnang seldom give me ads though and i see my friends with much lesser hits getting more ads that me :( I've not gotten any successful cheque from them since i started serving ads for them... But still, im sticking to them because they somehow represents singapore's official blog advertising company.

Advertlets pays me more than hundreds per month, and i received them successfully. But some of my friends didn't receive theirs though =x

Blog2U is quite efficient i should say :D

[Bernard Leong]

Kevin,

Thanks for the comments and thoughts on the article, particularly, on the issue on the lack of long tail. You are right, the shifts in the media landscape has seemed to go against the media profession, given that the "cult of the amateurs" as argued by Andrew Keen are distributing content much faster and making it accessible. What social media has done accidentally, is to break the stronghold of the big corporations on the ownership of the media. For example, let's look at the US Elections going on now. It is much easier for me to find a video or clip on the candidates than go to MSNBC, CBS or Fox News for them.

The way to mitigate the "inherent" nature of the industry in Southeast Asia is to find a way to pay for the media content while giving access of that content to everyone. Ultimately, the important rule about distributing free content out there is the following: "Who pays for it?". Actually, some parts of the media industry are adopting the model that the Advertisers pay for it. For example, you can watch the NBC TV series "Heroes" online if you are in the US, but you are subjected to advertising. That's because Nissan is paying for everyone to watch the series.

Ming,

Thanks for the note and comments (and I have replied to your point above to Kevin), and I will hope to catch up with you sometime soon. Of course, good to know that Nuffnang is expanding.

Good luck with your ventures. :)

Daryl Tay,

Thanks for the note. Of course, at the end of the day, online advertising on blogs is a game of real estate. I think that it's likely to measure through eyeballs than by click throughs.

[Daryl Tay]

This is a really good article. As a Singaporean, the stuff really rings through to me. That's why a lot of locals can't believe it when Google makes money from click throughs. "What? Who even looks at ads?"

[Ming]

Yo Bernard,

Interesting and informative expose on the blog advertising scene in Singapore.

I agree with you and kevin about the long tail of advertisers in SG. There is just not enough mass at this point of time, and I lean towards kevin's arguments that this is inherent and will not change or "mature" in the long run.

Of course I hope otherwise, as this would mean a more vibrant entrepeneurial ecosystem.

With regards to your feedback about payment. We try our best to make prompt payment, and definitely there is more room for improvement. As we increase the staff count in Singapore, we can increase the number of "admin" days, to handle this. Right now, our resources are focussed on finding advertising dollars (meaning we're out most of the time), with dedicated days to admin. As you can imagine (all finance related issues have to go through me, for control purposes).

You are also absoloutely correct in saying that our main competitors are the big boys, and that is where Nuffnang's focus is at this point of time. You can see that in our improvement in technology/UI, and also in our stable of advertisers, who include all top brands.

Do jio me next time you guys meet up, and we can discuss further how to improve local advertising networks' chances in the global playing field!

Look out for exciting developments in the near future too. Will keep you posted!

p.s. Kevin, when you coming back!??

Best,
Ming

[Kevin]

Bernard, well done on an elaborate deconstruction of the present blog advertising trend in Singapore and Malaysia. It's a useful platform for deeper discussion into the metrics of influence, which at best is still difficult to properly assess.

On the issue of the "lack of a long tail", I see two incumbent forces: 1) The online advertising industry in Singapore is still at its infancy, compared to traditional media channels, 2) The local market might be too small to sustain the long tail (i.e. any niches).

While, advertising is still the most direct way to give "dollar value" for online content / traffic, there's a larger issue at foot. As seen in the recent strike by the Writers' Guild of America, the TV networks haven't found a way to appraise online content, because it's mostly made free by the amateur netizens. These experiences show us what's clearly shifting in our media landscape.

Free user-generated content from Youtubers, Flickr photographers, political bloggers, it's a major trend against the media profession, from devaluing online content, to even the job cuts in the industry. As noted by Mark Deuze, and if interested, see his "Precariousness of the Media Industry". I'm not saying this is a negative trend, but rather it's a shift that needs to be addressed not with traditional forms of financial economics, but new informational and socially-oriented ones.

I personally see the traditional concept of advertising as a stop-gap solution to deriving value from one's online labor. It's hardly good enough to say something (e.g. per per click) is better than nothing. I'd think a more integrative marketing approach via blogs would be better since the commercial agenda would have to be better aligned with one's blog content / personality (based on measures of influence).

Alternatively, I'm leaning towards a more natural means of seeing rewards for online content, specifically currencies beyond money, e.g. forms of Community-based Currency.

I hope my two-cent is taken in good faith. I've been intrigued about the sever lack of measures for valuing online content, as you can see from the deposition I've taken on my blog. Still, it can be a good thing, since non-market oriented content is a sign of authenticity, in pursuit of a true-r marketplace of ideas.