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Business trends

Way to Southeast Asian shoppers' hearts? Through their feeds

Advertisers team with social media stars in hopes of reaching their large followings

A screenshot of Melissa Koh's Instagram post showing her enjoying a trip to northern Japan.

TOKYO -- Partnering with social media superstars is a new favorite tactic of advertisers in Southeast Asia, lending products the poster's cache and a chance to be seen by their multitude of followers.

"Look, there's magic all around," wrote Melissa Koh, one social media "influencer," of a February day spent in snowy Yamagata Prefecture, Japan, in an Instagram post. Her account on the photo-sharing service has attracted more than 220,000 followers, each tracking Koh's travels and fashion choices, and eager for suggestions on where to go or what to buy.

In fact, Koh's trip through northeast Japan was sponsored by All Nippon Airways as part of an advertising campaign targeting Southeast Asia. Having the star post photos and footage on her own account was designed to expand the campaign's reach -- with marked success, according to the official behind the ANA Holdings unit's plan. Passenger figures are up, the person said, thanks to Koh.

For companies to sponsor and commission posts by such influencers is not a new strategy. But it has recently caught on in Southeast Asia. Influencer marketing now accounts for around 30-40% of companies' social media advertising spending in Thailand, up from 15% or so three years ago, according to U.S. ad agency Ogilvy & Mather.

While circulation of fashion and travel magazines is lower in Southeast Asia than in China or Japan, the growing popularity of smartphones is bringing more people there online and onto social media. Social media penetration in Brunei, Singapore, Malaysia, Thailand and the Philippines now tops 50%, according to British advertising agency We Are Social. Companies are betting that this trend, coupled with a willingness to take friends' recommendations when shopping, makes sponsored content a potent advertising tool in Southeast Asia.

Lifestyle brand

Social media influencers and their followers are bound by common tastes and values. While advertisers lose some control over the content associated with their brand when they sponsor posts, they gain access to the poster's influence and credibility with their fans, and give their products and services "a feeling of familiarity," according to Goro Hokari, director of the Hakuhodo Institute of Life and Living ASEAN, which examines lifestyle trends in the Association of Southeast Asian Nations.

Sponsored posts are thus a way to precisely target narrow demographics -- a strategy that is particularly effective for pushing cosmetics, fashion and food products. Shiseido, for example, was able to take its Senka skin care line from 12th place in Thailand's face-wash market to fifth in a little over a year through a sponsored-content campaign. French cosmetics maker L'Oreal is working with influencers across the world on content such as makeup tutorials, available both on its own website and through collaborators' social media feeds.

Events for influencers, their fans and industry insiders reflect the surge of interest in this form of advertising. In April, around 3,000 people attended Influence Asia, one of the largest such gatherings in the region. Some 252 influencers were present, up from 180 in 2015, while social media posts linked to the event numbered 62 million, or 40% more than two years earlier. Even Singapore's DBS Group Holdings, parent of DBS Bank, is working to court influencers with this type of event, betting social media stars can get younger generations interested in financial products.

Sound advice?

Yet maintaining credibility in social media advertising is a growing challenge. Unscrupulous companies can have employees post in the guise of ordinary consumers to push products. Meanwhile, influencers criticizing a sponsor's competitor have found themselves embroiled in lawsuits.

Singapore has mandated advertisements be clearly distinguished from ordinary posts. Certain accounts also pride themselves on their independence from potential sponsors. Starvingtime, a feed of restaurant reviews and recipe videos run by a Bangkok man, specializes in exposing gaps between eateries' advertising and actual offerings. All advertisements are clearly identified as such.

This candor and neutrality has earned the account more than 1.3 million followers. Last year, Starvingtime registered as a company, and now employs around 50 workers as a brand of its own.

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About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

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