Total online advertising spend in Singapore reached S$135.9 million (US$107 million) last year, which marks a "watershed moment", although gap still remains between the country and other more mature digital markets, according to the Interactive Advertising Bureau (IAB).
In a statement released on Tuesday, the IAB Southeast Asia's Singapore Chapter said a strong close to 2011, which saw the second half advertising revenue grow by 25 percent, helped push the year's performance beyond double digits and into the S$100 million (US$79.5 million) territory since it started measuring online advertising spend three years ago.
The first half of 2011 generated S$60.3 million (US$47.6 million), while the second half saw it climb to S$75.6 million (US$59.7 million), it stated.
"This is a watershed moment," said Loren Shuster, chairman of IAB Singapore and also country director for Singapore and emerging markets at Google. "It is the first time the revenue has moved out of the double digits and crossed S$100 million since we set out to measure online advertising spend three years ago."
The report, compiled by PwC, tracks online and interactive advertising market annually and was commissioned by both IAB Singapore and the Media Development Authority of Singapore (MDA).
Shuster added that while Singapore continues to be ahead of Hong Kong in terms of total percentage of online ad spend, there is still "catching up" to do with other more mature markets.
Overall, the online ad spend in Singapore grew at a compound annual growth rate (CAGR) of 23 percent for the 24-month period ended Dec. 31, 2011, and was mainly driven by search and display ads, the report said. However, it noted the share of search ads has continuously increased at the expense of display ads for the past three years--a finding consistent with more mature markets.
Industry-wise, the financial services sector had the highest ad revenue with 15.22 percent share. Other sectors that had "dominant" online spend were travel and leisure, technology and communications, business services, and property, according to IAB.
Digital advertising is now "firmly embedded" in businesses' marketing strategy across industries, said Greg Unsworth, technology, infocomm and entertainment and media industry leader for Singapore at PwC Singapore. With faster broadband speeds and increasing mobile penetration, consumers' engagement with connected digital experiences is rising.
As such, the importance of digital advertising will only continue to grow, Unsworth pointed out.