On-line advertising not keeping pace with impact

Businesses are still reluctant to advertise on the Internet although its impact in Malaysia has considerably surpassed that of developed countries such as Japan, Hungary and the United States, an international study revealed today.

The Internet accounted for 4.1 percent or US$9.75 billion out of US$238 billion (World Bank estimates) of the country’s gross domestic product (GDP) in 2010, said the ‘Online and upcoming: The Internet’s impact on aspiring countries’, a joint study carried out by Google and McKinsey & Company and released today.

Despite its significant contribution, only one percent of the country's total business budget is allocated for online advertising, stated the report, comparing the number of businesses that sell products and services online with many other countries with similar wealth.

The report is the first of its kind to measure to the contribution of the Internet to economies.