Web marketing

Michael Alan Hamlin

Posted on December 17, 2008

The Philippines: A study in contradition

The Philippines is an intriguing study in contradiction. Its enthusiastic embrace of social networking and the Internet is a good example. As this year draws to a close, research suggests that 24 million Filipinos – about 27% of the population – have access to the Internet. Although broadband penetration has lagged – estimates vary from less than five percent to more than 15% – new services are becoming available that promise respectable bandwidth at increasingly attractive rates.

An astounding 99% of active Internet users say they watch video clips on the Internet, and slightly over 90% have read a blog. According to data gathered by Universal McCann, 83% of Filipino Internet users are members of social networks and 86% upload photos to social networks like Facebook, Friendster, and Multiply. Although about 60% of Internet users have access at home, they regularly visit Internet cafés – underlining not just the social incentives for Filipinos, but the interactive attraction of the Internet.

The Internet is also a great visibility engine for Filipinos. Google’s year-end Zeitgeist – spirit of the times – 2008 results for the Philippines showed artists Charice Pempengco and Arnel Pineda as the number one and two, respectively, fastest rising celebrity searches. And it was YouTube videos that originally brought them to the attention of their benefactors: Ellen DeGeneres and Oprah Winfrey in Pempengco’s case, and guitarist Neal Schon of the legendary rock band Journey in Pineda’s case.

Filipinos increasingly turn to the Internet for news even for well-established celebrities. Boxing champ Manny Pacquiao took the top four slots on the top-ten Zeitgeist list for fastest-rising Google news searches in 2008. Other fast-rising news searches, in order, were Ces Drilon, RCBC bank robbery, 2008 SONA, The Dream Match, Bar Exam Result, and Reproductive Health Bill, demonstrating that the Internet serves as a comprehensive source of information for Filipinos. Top searches for the year also reflected a variety of interests, from musical lyrics to social networking sites, to maps. (Disclosure: Google is a client of my firm, and a Google document announcing the Zeitgeist results is available here.)

When it comes to Philippine culture and tourism, the Zeitgeist results show that the Internet is once again a priority source of information. The top five fastest-rising Filipino-related searches for 2008 were Florante at Laura, Ibong Adarna, Pinoy Jokes, Noli MeTangere, and El Filibusterismo. The fastest-rising travel destinations were Pangasinan, Cebu, Palawan, Baguio, and Sagada.

The Internet is also a primary source of information for coping with the economic downturn. According to a Google service called Google Insights for Search in which popularity of search terms can be compared, 2008 saw large increases in searches for “sale” (36% increase), “tipid” (36% increase), and “free” (10% increase) as Filipino users sought good deals that will save them money.

More to the point, terms like “recession” (2,600% increase) and “financial crisis” (333% increase) also saw significant spikes in search volume in September and October, when the depth of the crisis was becoming clear. These results show not only that Filipinos are turning to the Internet as a primary source of information, but that the notion that the financial crisis isn’t affecting Filipinos is simply nonsense.

Where is the contradiction in all these numbers? The contradiction is that despite Filipinos’ enthusiastic embrace of the Internet, few Philippine companies have figured out how to leverage the Internet and web marketing to promote their products and services. To be fair, no one has really figured out how to leverage the Internet for marketing communications. But elsewhere, advertisers are trying.

Internet adspend in China is growing at 70% a year, and although advertisers are pulling back dramatically on overall adspend globally, Internet advertising is growing according to TNS Media Intelligence. Although the Philippines has a larger Internet user population than Hong Kong, Malaysia, and Singapore, a recent AC Nielsen study projects that the Philippines will fall to fifth place in Internet adspend after Singapore, Malaysia, Thailand, and Indonesia in 2010. That year, online adspend in the Philippines is expected to be slightly more than $22 million.

That’s not necessarily because Filipinos are reluctant to spend money buying products online. According to one executive in a position to know, the local version of online auction site eBay has become an important Asian revenue generator. Whether that is true or not, these facts make it clear that while Filipinos are embracing the Internet, Philippine companies aren’t.

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