The Philippine Internet by the numbers
The Philippines, Vietnam, and Indonesia will account for almost 90% of growth in online ad spend in Southeast Asia in the next five years according to research conducted by Media-Interactive, AC Nielsen, and Yahoo! The value of online advertising in the Philippines is expected to reach Php 1 billion this year as young and influential Filipinos increasingly look to the Internet for entertainment and to network with friends.
With a population dominated demographically with individuals of productive age-about 61% of the population is between 15 and 64 and about evenly divided among males and females-the Philippines is a nation of early adapters (Yes, adapters.), despite some awesome financial hurdles. For example, 80% of an estimated population of 98 million-equivalent to some 72 million individuals-use mobile phones.
The Philippines has the sixth highest number of mobile phone subscribers in Asia Pacific, and according to one recent report they send two billion SMS messages a day, more than anywhere else in the world. With a little more than half of Philippine households making Php 50,000 or less each month, mobile telephony has clearly been embraced by economically challenged socioeconomic classes as an affordable and reliable way to interact with family and friends.
Internet users-estimated at between 24 and 35 million-are disproportionately young, single, and surprisingly, poor. They can’t afford broadband access, or even a computer and modem. So over 70% of Philippine Internet users go online at Internet cafés. Most others, 27%, log in at home. Seven percent each go online at work and school. In reality, the percentage of users who access the Internet at work and school is probably much higher.
Research organizations have a tough time measuring access in private firms and in schools, which generally provide fast access speeds. Because broadband penetration is low at only about two percent of the population, it’s often assumed that most Filipino Internet users must endure slow connections. The overwhelming reliance on Internet cafés-while not super fast-along with probable home and office use, suggests that access for the average user is faster than broadband penetration suggests. Broadband is growing-about 400% in the last year.
Another myth is that Internet access is largely limited to tier-one urban areas. Research by AC Nielsen and Yahoo! show that usage is surprisingly broad. One example: 35% of Filipinos living in Cagayan de Oro accessed the Internet in the past month at the time of the survey. And regardless of socioeconomic class, users are more likely to be opinion leaders and early adopters compared with traditional media consumers.
Entertainment is by far the most important reason Filipinos go online, with 78% seeking some form of entertainment, according to research firm comScore. This bodes well for companies that develop Internet games. It’s not particularly good news for some other digital marketers. I’ve argued that it makes sense for politicians, for example, to be visible on the Internet and on social networks because 51% of users them regularly.
But at least one political consultant I know disagrees completely. He believes that because most Internet users have small budgets for online access, they are not going to waste time checking out a politician’s blog and website. Nevertheless, comScore suggests that while entertainment dominates users’ time, about 43% also go online to visit news and information sites. And there is encouraging news for online retailers: More than 40% of users go online to buy books, software and hardware, and apparel.
In fact, Filipinos engage in a broad range of online activity. Research by Universal McCann shows that 86% upload photos; 61% upload videos; 99% watch videos, and 90% read blogs, which includes gamers. Popular games always feature blogs and forums where players can interact, develop networks, and trade tips. While games themselves are wildly visible and disturb young users’ mothers, gamers actually learn to read and write online.
Users are world-class, too. Several have launched successful international careers, notably Arnel Pineda, now lead singer for the rock-band, Journey. Filipino users have made hundreds of thousands of edits on Google Map Maker, an online tool that allows users to map previously unmapped areas. A programmer employed by the University of the Philippines, Wayne Manuel, was recently named the worldwide winner in a global Map Maker contest conducted by Google, and won $50,000 for UNICEF.
While analysts may debate what Filipino Internet users are willing to do with their precious access, the Philippine Internet by the numbers reveals an active, engaged community. Despite the numbers, however, understanding how to engage is not without mystery.
(Michael Alan Hamlin is the managing director of TeamAsia and a Manila-based author. His latest book is High Visibility: Transforming Your Personal and Professional Brand . Write him at email@example.com and follow him on Twitter, Facebook and LinkedIn.).