Advertising & Marketing: Offline advertising making a comeback

This article first appeared in Enterprise, The Edge Malaysia Weekly, on March 9, 2020 - March 15, 2020.
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The cost of online advertising has risen steadily as the competition to capture more eyeballs becomes more intense with the growing number of companies choosing to market their products and services in this space.

After years of being vaunted as the medium that would take over and put paid to print advertising, companies are starting to realise that online advertising has its drawbacks. AdBlock software and browser extensions have also rendered many forms of digital advertising entirely useless, especially towards tech-savvy individuals.

However, online advertising is prone to fraud as online bots can artificially increase the visitor count of websites through “click farms” where legions of workers get paid minimum wage to click on paid advertisement links.

A 2019 study by Juniper Research estimates that a total of US$42 billion was lost globally due to digital advertising fraud. Multiple illicit industries have mushroomed to game the system, siphoning quick advertising dollars in exchange for artificial likes, clicks and watch time, all of which are tedious to verify and audit.

According to the founders of AdEasy Sdn Bhd, these are the growing concerns of marketers in Malaysia and companies are again setting their sights on offline advertising as a more viable platform of interest.

“Offline advertising is more fraud-proof simply because it is regulated. You cannot simply put up a billboard by the roadside. You have to apply for a permit from your municipal or city council and adhere to the guidelines of the censorship board. Also, the penalty for violating these guidelines is more severe,” says AdEasy co-founder and CEO Melissa Sim.

“More than 50% of our user base are start-ups that have gone beyond the Series A and Series B funding rounds such as Klook and Carsome. These start-ups started out as pure online advertisers. But there will come a point when the effectiveness of online advertising flatlines. No matter how much you expand your online advertising budget, the results will be more or less the same.

“That is when they will start to look at offline advertising again. Companies at the Series A stage and onwards are focused on growing their brands and offline advertising would be a more suitable tool for them to be at as many exposure touch points as possible.”

Therine Goh, co-founder and chief operating officer at AdEasy, also cites the cyclical nature of advertising mediums as a key reason marketers are slowly moving towards offline advertising. “Whenever there is a new advertising medium, many advertisers will jump on the bandwagon so as not to miss out on the opportunity. However, digital advertising is no longer a new concept. The industry has become so fragmented and cluttered and it is no longer as cheap to advertise online as it once was,” she says.

“Basically, it is just another cycle to us. When television advertising came out, many people said it would put radio advertising out of business, but it did not. When digital billboards came out, many said static billboards would go out of business, but these are still around. Mediums in the advertising landscape will only evolve as it is hard to make a medium obsolete.”

AdEasy is an online booking platform for offline advertising space. It aims to simplify the often complex process so it is as easy as online advertising.

“Facebook and Google dominated the online advertising space for a long time. Advertising online is as simple as logging into my dashboard, setting the location, target demographic and budget. And I can launch my campaign immediately,” says Goh.

“But if I want to launch an offline advertising campaign, I have to meet the sales representatives, brief each of them on my requirements and wait for them to get back to me with a confirmation. So, that was when we thought, ‘Why can’t we emulate the ease of online advertising but for offline instead?’” says Sim

“AdEasy is built like the Agoda or Airbnb of offline advertising, a platform that connects advertisers with media owners. This is important because every offline media type has very different processes and requirements for bookings. It can be quite complex, so our goal is to simplify that process.”

 

The four-year grind

Sim and Goh have a background in media and marketing respectively. With their combined experience, they understand the business pain points of both sides of the equation — media buying and selling.

“I started my career by selling billboards and advertising space on trains with UPD Sdn Bhd. I left the company when it was acquired by Big Tree Outdoor Sdn Bhd. Then, I joined Media Prima Radio and sold airtime when the radio department was started. FlyFM was six months old at that point and I was one of its first batches of sales representatives,” says Sim.

“After that, I founded my own media agency — Bloc 48. Therine was my first client. Then, I asked her to join me at Bloc 48.”

“Actually, we first met when I was working as a line producer for a small production house, where Melissa was our intern. That was when I found out we had studied at the same advertising school. We went our separate ways but kept in touch,” Goh recalls.

“I worked in Genting Group as a marketer, handling a portfolio of more than 40 restaurants, two hotels and a spa, as well as the casinos. It was difficult because it was hard to convince people to drive up a mountain to have meals at our restaurants. It was also difficult to advertise casinos through traditional means.

“After that, I joined General Mills Inc, a fast moving consumer goods company that owns brands such as Häagen-Dazs, Pillsbury and Nature Valley. I was working on the branding for Häagen-Dazs and I became Melissa’s first client when she formed Bloc 48. That was when she asked me to join her.”

The duo came up with the idea of AdEasy in 2013, when Goh was having difficulty securing offline advertising space during her time as a marketer. “Talking to the sales reps was very exhausting. Many agencies and sales reps have presentation decks that are 100 slides long. All I wanted to know was whether I could afford the media package and whether it was effective at reaching my intended audience. You do not need 100 slides to explain that,” she says.

Sim then raised the idea of building AdEasy — an online platform for offline advertising space. But they were not convinced that the idea was worth pursuing and decided to validate it through the Alliance Bank BizSmart SME Innovation Challenge.

“We were invited to join the innovation challenge, just to participate and pitch the idea. Back then, we were just trying to see if the idea made sense. We did not expect to get shortlisted as one of the 13 finalists to follow through on the programme,” says Sim.

They participated in the programme with people like the myBurgerLab founders and Kristy Ng. Unlike the other candidates, however, AdEasy was just a pre-seed idea and not a functional business.

“We were the only participants who did not have a running business. We did not even have a prototype. So, during the workshops, we had nothing to work with. But one of the judges mentioned that the difficulty securing offline advertising was a real business pain point for SMEs,” says Sim.

“That gave us the confidence to pursue the idea of AdEasy. After the programme, we started working on the idea to make it a reality.”

They invested time and effort in getting the business off the ground while trying to sustain themselves with projects at Bloc 48. After multiple rounds of trial and error and going through numerous website developers, they managed to launch their first working version of AdEasy in May 2017 — four years after the idea was conceived.

“It was a steep learning curve for us because we were trying to create something that was not available in the market. We literally had to build the platform from scratch because there was no precedent. We tried working with overseas freelancers, but it was difficult due to the time difference and language barrier,” says Goh.

“After a year, we decided to hire local freelancers and spent quite a sum of money to get the website working. The development took about two years to reach the prototype stage, but it still did not work as we intended. In the end, we decided to hire a full-time employee to work on the project, which helped immensely. We thought that, if we had hired him from day one, we could have saved a lot of money. It taught us that it is important to source for the right talents from the get-go.”

During the development stage of AdEasy, the founders actively approached media owners and companies to secure as much media inventory as possible. Their biggest breakthrough was when Astro agreed to list as a media partner.

“When Astro came on board, it was easier to secure inventory from other media companies. I had been in the industry for some time and a friend of mine at Astro knew I was working on AdEasy. We pitched the idea to Astro and it supported us straight away” says Sim.

 

Offline advertising market

AdEasy currently has 12 employees and about 1,500 available booking spaces listed on the platform. There are about 900 registered advertiser accounts, most of which are start-ups and local SMEs.

“In the past few years, it has always been the same few global brands that dominate and contribute to the bulk of offline advertising expenditure. We want to dispel the misconception that offline advertising is too expensive and too complicated, and make it more accessible to local start-ups and SMEs that have never considered advertising offline before,” says Sim.

“You do not need a RM1 million advertising budget just to advertise offline. Did you know that for RM30,000, you can run a one-month cinema campaign or even one of the billboards on the LDP [Damansara-Puchong Expressway] for a month?”

According to the duo, AdEasy has managed to secure about 80% of the total Malaysian offline advertising inventory nationwide. Radio is by far the most popular advertising medium on the platform, contributing to 69% of its revenue in 2019. Conversely, print magazines are the least popular medium.

“Radio advertisements are relatively cost-effective in terms of production and publishing. Compare shooting a television commercial with recording a radio advertisement. In many cases, radio stations provide advertisers both the studio and voice talent, making it very easy to produce,” says Goh.

“Radio is also a high-reaching medium. Commercial Radio Malaysia revealed that in 2019, 20.6 million listeners tuned in to a radio show on an average week. Malaysians still listen to the radio while stuck in traffic. Some of them even listen to radio stations online while at work.”

Sim points out that radio has one of the shortest turnaround times among the offline mediums. By comparison, advertisements in magazines can take up to three months before they are published.

Goh emphasises that offline advertising mediums are not objectively better than online advertising across the board. The mediums serve different purposes and achieve different objectives, she points out.

“Generally speaking, online advertising is used to implement short-term, tactical marketing strategies such as flash sales, events or limited time promotions. These are used to engage audiences and get quick results.

“But if a company would like to pursue brand longevity, it is still important to advertise offline to build up trust in the brand. Offline advertising is great for industries that require a certain level of trust such as education, banking, hospitals or even consumer goods such as milk.

“More and more local start-ups and SMEs are aware of the importance of offline advertising. In the past, the pool of advertisers in the offline market was small. But now, there are rapidly expanding newcomers looking to enter this space, especially start-ups that have secured funding.”

Goh highlights that such a shift in the advertiser base is beneficial to the media industry as a whole. By opening up the market to new players, media companies can focus more attention on delivering better content and creating more value for their audiences, without the big brands squeezing their margins.

When asked about the outlook for the offline advertising industry, Sim singles out digital billboards as the medium to look out for in 2020. “I am optimistic about digital billboards because there is a lot of potential in the medium that has yet to be explored. For example, Lazada’s 11.11 campaign utilised digital billboards in a very effective way. For much more location-centric purposes, such as local fairs and events, digital billboards are very effective as well,” she says.

“For 2020, we will be bringing in analytics for offline advertising space, starting with billboards. If you advertise on Facebook, it will display an estimated amount of impressions and reach when you key in a certain budget. We want to be able to do that for offline mediums as well and are trying to figure out how to track impressions for billboards. We are doing this on our own initiative and we look forward to providing these kinds of added value to our advertising user base in the future.”