Sue-Anne Lim
Jul 6, 2015

Austerity spurs innovation

Malaysia has seen economic challenges over the past year but while growth is starting to pick up, consumer sentiment lags. Here's three themes to help brands continue to gain ground.

Austerity spurs innovation

Malaysia has seen economic challenges over the past year but while growth is starting to pick up, consumer sentiment lags. Here's three themes to help brands continue to gain ground.

Times of subdued demand, revenue or profit are also often times of opportunity and creativity. Austerity has a way of motivating innovation. Going through the furnace of a rough economy teaches even the world’s biggest brands lessons in becoming more accurate and meticulous with their marketing. Malaysia’s 2014 was turbulent and there’s till uncertainty about when the tide will change, but brands in the market would do well to review their marketing plans to find more efficiency and creativity. 

In short, 2014 was a year to forget. It was tough for Malaysia with three airline disasters, the worst flooding since 1972, plunging oil prices, Central Bank reserves at four-year lows, and the Bursa contracting 6.3 per cent year-to-date. Despite an improved GDP of 6 per cent (an improvement over 2013’s 4.7 per cent), market sentiment has yet to lift, with understandable worries about GST implementation in 2015. Sentiment shows a declining trend right up to the new year, with Malaysia’s consumer sentiment index slumping to a 6-year low by 2015’s first quarter; plus all the nation’s financial attitudes and spending plans look bleak.

Consumer sentiment index

Consumer spending expectations by sector

(source: Malaysian Institute of Economic Research)

In the third week of 2015, the Prime Minister had to revise the year’s budget (penned back in October 2014 when oil was at US$100/barrel), in order to reassure the country that it was not in a crisis. Since the ad market closely tracks the national economy’s fortunes, the measure of advertising expenditure growth shrank from 19.3 per cent in 2013 to 4.7 per cent a year later. So with all of that bad news behind us, the first four months of 2015 have already registered 4.2 per cent growth. But a question remains as to how brands are going to prove resilience and display the confidence needed to take on these challenges.

To succeed in Malaysia’s tightened market today, here are the three themes brands should follow to gain ground in a market that is challenged but still growing.

Sailing through rough seas

Tough economic times almost always push consumers to change habits. But marketers should not merely wait out the storm; this should be viewed as opportunity for new product or service innovations. Beyond that, smarter consumer segmentation has a role to play. It’s precisely the time for creating customized messages and value with optimised spend and, no doubt, the right time to reconfigure a marketing communication mix (traditional versus digital or integrated campaigns meshing up). Exact executions still depend on the product, brand positioning and overall corporate strategy but there is room to combine innovation with lower-cost marketing techniques to ford those rough seas.

It’s not a question of ‘if’, but ‘when’ digital advertising becomes a staple media

According to the Malaysian Communications and Multimedia Commission, broadband penetration reached 70 per cent in 2014. And from that, the increased mobile and desktop traffic drives online display adspend in the country. Far from just banner buys, advertisers are becoming more focused on context and content, which are imperative key drivers in online marketing. Data-driven analytics and how data is used will be a critical differentiator among advertisers as online display ads begin to drive conversion. 

According to comScore data, over 60 per cent of monthly internet traffic in Malaysia was video in 2014 and analyst projections call for that to rise to 80 per cent in 2017. TV advertisers are beginning to shift budgets towards online video platforms to extend reach beyond TV. Fuelling that strategic marketing decision is the advent of SMART TVs and the growing popularity of free-streaming sites that offer viewership of imported Asian content (Indian, Chinese, Korean, Taiwanese and Japanese). Numbers from the Malaysia Digital Association show that mobile adspend grew 24 per cent in 2014, and that should continue to grow as content developers provide even better user mobile experiences on their platforms. With industry analysts calling for over 80 per cent smartphone penetration in Malaysia this year, it becomes imperative for brands to look for the right content, channel and context mix to influence the consumer path to purchase. 








Population (m)






Household (m)






Fixed line penetration (%)






Cell phone penetration (%)






Broadband penetration (%)






(Source: Malaysian Communications and Multimedia Commission)


Be a Game Changer: Integration of channel and content to creating the right context

Technological advancements and smart applications have given us new opportunities (and challenges) to come up with new and innovative approaches to craft brand and marketing campaigns. Knowing and understanding the target consumer is key. In communicating with them, brands have to respect them, be open, and transparent. Unlike the past, consumers can, will and want to talk back. Bad news, more often than not, gets easily distorted as it travels round the block.  Today’s communications need to be multi-dimensional and multi-sensorial.

Malaysia’s consumers have more media consumption choices than ever before and this means it is harder to pinpoint them. The explosion in media platforms, vehicles and technology has rendered the strategy planning process far more complex than just seeking out the most relevant opportunities to reach an advertiser’s target audience through paid media. As a result, more advertisers are using more media or platforms to engage consumers in more ways. 

In Malaysia, digital investment has not kept abreast with audience movement. Brands who want to stay top of mind in consumer surveys like Asia’s Top 1000 brands still need to up their digital game and the three themes presented here make for a succinct guideline to achieve that goal. Channel, context and content integration is the future across Asia, despite on-going debates over old versus new. The market’s recent economic challenges will test both the will and speed of brands in adopting creativity in their strategy planning. The most adaptive ones will sail in spite of rough seas.

Sue-Anne Lim is chief of Dentsu Aegis Network Group insights & strategy


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