Like in other parts of the world, online consumer behavior in Pakistan changed drastically as in a blink of an eye everything went ‘online’ due to COVID-19. Digital advertising has helped businesses all around the world to stay connected with their consumers and innovate to endure the impact of the crisis. Advertising platform Mediaocean, after analyzing ad spend from more than 300 advertisers with a collective spend of more than $3 billion across Amazon, Facebook, Instagram, LinkedIn, Pinterest, Snap-chat and Twitter, concluded that the spending on advertising allocated to leading social media platforms by businesses is gradually bouncing back to pre-pandemic growth. Smart businesses/brands around the world are using digital marketing more than ever as it allows tracking of data related to consumer behavior and engagement. It is also agile enough for marketers to invest their marketing budget wisely on the best-performing online advertising strategies.
Ad spend is gradually bouncing back to pre-pandemic growth globally
Year-on-Year % change to ad spend
Sample of 300 advertisers across Amazon, Facebook, Instagram, LinkedIn, Pinterest, Snap and Twitter
What happened in Pakistan?
The COVID-19 pandemic has shifted consumer behavior in Pakistan as well. Besides the dip in retail shopping and a surge in online buying, the demand for online news, videos and even home-entertainment solutions has been on the rise. According to the Digital Pakistan 2021 report by Data Reportal, there were 61.34 million internet users in Pakistan in January 2021. The number of internet users in Pakistan increased by 11 million (+21%) between 2020 and 2021. Internet penetration in Pakistan stood at 27.5% in January 2021. Subsequently, number of active social media users increased by 9 million (+24.3%). While Pakistan has lagged regional peers in Information Technology adoption, it is on the right growth trajectory.
Sources: THE U.N; LOCAL GOVERNMENT BODIES, GSMA Intelligence, ITU, GW1, EUROSTAT, CNNIC, APJII, OCDH, SOCIAL MEDIA PLATFORMS’ SELF-SERVICE ADVERTISING TOOLS AND EARNINGS REPORTS; MEDIA SCOPE, CAFE BAZAAR * COMPARABILITY ADVISORY : Source changes internet user numbers no longer include Data sourced from social media platform, so figures are not comparable with previous reports.
Note: Social media user numbers may not represent unique individuals, and may exceed internet user numbers.
The increased use of Internet in Pakistan especially during the pandemic has also changed the allocation of marketing budgets by major brands and businesses of the country. While the global ad revenue shrank significantly due to COVID-19, brands and businesses are now more receptive to a ‘digital-first’ mindset when it comes to advertising in Pakistan.
Even before the pandemic share of Digital Ad revenue was increasing in Pakistan
Source: Aurora Fact File, Aurora in consultation with industry experts
According to Aurora Fact Sheet, the total advertising spend (revenue) in Pakistan had decreased during FY 2018-19 compared to FY 2017-18. However, the (%) share of digital and OOH (out-of-home) advertising revenue increased, despite the decrease in total ad revenue in Pakistan.
During the past 5 years, linear (TV, Radio, Print, Other) and digital ad spend both grew the most during 2017 while there was a decline in both following 2018. The NAR (National Ad Revenue) was PKR 67.2 billion in 2019 (near to what it used to be in 2015). Apart from the above comparison of previous years, if we look at the digital ad spending in Pakistan (year-on-year) from previous three reports of Aurora on Media Advertising Spend in Pakistan, it is evident that digital advertising is the only category of advertising in Pakistan, which has shown a steady year-on-year growth even before the pandemic. The percentage share of digital advertising in the total ad revenue is +30% during the past 5 years.
What to expect after COVID-19?
The only bright side of 2020 (COVID year) for Asia Pacific (APAC) ad market was the resilience of digital media in terms of growth. According to MAGNA, the future performance of advertising market will be tied to the pandemic, vaccination, overall business outlook and real GDP growth (predicted by the IMF). Provided that the outbreak is contained in the region during some point in 2021, all media formats will return to growth. The latest MAGNA Advertising Forecast predicts that Asia Pacific’s (APAC) ad market (which Pakistan is a part of) is set for a strong recovery in 2021, with growth of +11% to reach $193 billion. The digital advertising in the region is expected to grow by +10.4% to reach $371 billion (which is 61% of the total global ad revenue).
Overall Ad market Growth During 2020 (by country)
Growth by country
Source: Global Advertising Forecast Winter Update December 2020, MAGNA
Although the overall ad market which includes linear ad sales (this refers to traditional media like TV, Print, Radio, OOH) and digital ad sales (online video ads, search ads and social media ads) declined in 2020, but most of this decline came from the erosion in linear ad sales. Digital ad sales grew for most of the countries in APAC during 2020, suggesting that businesses/brands across the region were reallocating their ad spends to spend more on digital ad formats and cut spending on traditional ad formats.
During 2021, India is expected to see one of the strongest growth rates (+26.9%) in the overall ad market with +19% growth in digital ad sales. Among other South Asian countries that are part of APAC, Sri Lanka is expected to see a growth of +21% in digital ad sales, while Pakistan is also expected to see a growth of +21% in digital ad sales.
Growth in Digital Ad Sales (South Asia)
Source: Global Advertising Forecast Winter Update December 2020, MAGNA
What is Pakistan searching for in the digital space after COVID-19?
An important question that every marketer needs to understand for the effective utilization of ‘digital ad-spend’ is that what exactly are Pakistanis searching for in the digital landscape? Understanding online consumer behavior can lead to an intelligent allocation of ad spend within the digital space.
Google in its latest report ‘What is Pakistan searching for?’ has given valuable insights related to online consumer behavior in Pakistan. The key takeaways from the report are:
1- Pakistani Consumers are Getting More Sophisticated
Pakistanis need quick access to products and services that are offering delivery options, comfort, convenience and quality. Expectations from brands have increased as an online consumer in Pakistan now wants high-quality products being delivered at their door-step with a convenient digital experience. There is an increase in the search term ‘best’ along with various products.
2- Pakistanis are Searching for Sustainable Products and Services
Pakistanis are now searching more about environmental issues and continually looking for eco-friendly products while the searches about pollution index and air quality have shown a sharp increase.
3- Pakistanis Rely on Online Videos for News, Entertainment and Information
Local YouTube content creators like Irfan Junejo and Faiza Saleem are gaining popularity in the country as more Pakistanis are flocking to YouTube. Pakistanis are also participating in online live video sessions (‘with me’ content), which have boomed during the pandemic.
4- Pakistanis are more Concerned about a Healthy Lifestyle than Before
According to a study by Euromonitor, Pakistan is the second-fastest growing vegetarian country in the world. There has been a sharp increase in the search terms ‘fitness classes’, ‘health club’, ‘super foods’ and ‘self-development books’ in Pakistan.
What does this mean for the digital advertising industry in Pakistan?
Brands and businesses will need to create more effective strategies that help people use digital platforms. Video content is more popular than ever as people have to cut-down on all sorts of outdoor recreational activities including sports. With the Pakistani consumers becoming more reliant on digital and social commerce after COVID-19 businesses/brands need to rethink their digital advertising strategies in a way that yields high ‘Return on Ad Spend’ (ROAS) while building a loyal online customer/consumer base. Even if a business is spending peanuts, online marketing efforts need to be channelized in a way that each dollar makes a difference in the right direction. This can only be done with a better understanding of how online consumer behavior is changing in Pakistan.
How Brand Nib helps startups/brands/businesses to grow online?
Instead of strict media-buying (running paid campaigns for their clients), agencies (big or small) need to shift their focus to strategic guidance based on their wealth of collective experience and broad perspective spanning industries, markets and platforms—part of what has always made agencies more valuable than any in-house alternative.
At Brand Nib, we aim to provide digital marketing services to brands/businesses/startups through a consultative approach. More than being an agency we work tirelessly to be an integral marketing partner of any business/brand/startup that wants to market itself in the digital space. As an agency we believe that no business/brand/startup should suffer at the hands of bad online marketing/branding irrespective of its size, scope or budget.