As the region braces for a possible US-induced economic slowdown,
advertisers in Singapore have restructured their ad strategy to allow
them to maintain their share of voice in the market through a more
efficient use of resources.
They have diverted significant sums of advertising dollars from
television and newspapers to less costly media options such as outdoor
and magazines.
According to figures provided by ACNielsen, the Lion City's adspend grew
a sluggish four per cent in the first quarter to Sdollars 337.3 million
(about USdollars 191 million), compared with the 28 per cent growth in
the same period last year.
However, spend in newspapers - the country's biggest medium - expanded a
paltry 0.7 per cent to Sdollars 167.7 million, while television
performed even worse, contracting just less than one percentage point to
Sdollars 106.9 million.
At the same time, bus-back/taxitop advertising soared more than 40 per
cent, and radio and poster jumped about 26 per cent. Magazines surged 20
per cent and cinemas put on 10 per cent.
The restructuring of the adspend strategy is in line with the cautious
mood currently prevailing across the region, but Singapore is the only
major Asian market to make such a sizeable shift.
Zenith Media Singapore managing director Kenneth Tsang says part of the
reason for this is because new media opportunities are becoming
available to advertisers.
"There are more magazines, more channels like bus shelters, and that
allows us to be more innovative with print ads. Advertising on taxis and
buses keep reaching new professional heights and there has even been a
great deal of improvement in radio content in terms of music and other
shows.
"So lower cost opportunities abound as the supply of new media channels
become available. And it's not a case of 'more of the same' but a real
and tangible qualitative jump," Tsang said.
Compared with Singapore, Hong Kong's first quarter performance was only
slightly better at 4.8 per cent to HKdollars 6.8 billion (about
USdollars 0.87 billion), as advertisers adopted a wait-and-see attitude
on the direction of the US economy.
However, media directors said the lacklustre year-on-year growth rate
was a reflection of the bursting of the dotcom bubble, which was one of
the principal drivers of advertising expenditure in 2000.
Starcom Hong Kong managing director Paul Maher said: "In general, the
Hong Kong market is adjusting to a more realistic growth rate, close to
the territory's growth rate for the year."
Seen in this light, the first quarter performance isn't bad and the
consensus is for an adspend growth rate of between three and five per
cent for the whole of 2001.
Maher also said that given that banking and government authorities in
New York and Washington have taken serious steps to prevent the US
economy from plunging into a recession, it appears that confidence is
slowly returning to the Hong Kong market.
"In January, there was a high degree of uncertainty and budgets were put
on hold but I expect a resurgence in adspend in the last half of the
year as the feeling of pessimism recedes." Maher said.
One of the principal drivers of Hong Kong's adspend growth is mainland
China properties; advertising in this sector climbed 61 per cent to
HKdollars 343 million in the first quarter, which accounts for about
five per cent of the total adspend pie. In comparison, local Hong Kong
real estate advertising tumbled some 12 per cent.
China, meanwhile, continued growing at a double-digit rate, putting on
17.5 per cent to RMB20.5 billion (about USdollars 2.5 billion). Tonic
and vitamin was the biggest category, rising 4.5 per cent to RMB2.4
billion. The cough and cold remedy sector was the second-fastest
growing, surging more than 102 per cent to RMB1.1 billion.
