Media agencies said the gloom had forced the terrestrial stations offer deeper discounts, but many expected the stations to moderate the discounting in 2004. The 2002/03 financial report of challenger station MediaWorks shows a huge disparity between its ad sales revenue and media spend figures compiled by Nielsen Media Research on its two-channel operation.
NMR tracked advertising expenditures at rate card value of S$252.3 million for the 2002/03 financial year for Channel i and Channel U against MediaWorks' own reported ad sales revenue figure of $41.6 million. Similar comparisons cannot be made for rival broadcaster MediaCorp as it does not publish advertising revenue reports.
MediaWorks chief operating officer for marketing, Nalini Naidu, declined to comment on the discounts, saying the company's legal department would need to look at the questions forwarded by Media. Naidu also claimed that NMR calculation was skewed as it included trailers in its adex calculation.
An executive at NMR said the company had a team of people recording TV ads by brands, duration and published rates provided by broadcasters and that the monitored spend levels did not include trailers.
A media company head said discounting of up to 50 to 60 per cent "was not new", even before the market's partial liberalisation in 2000.
MediaCorp's senior vice-president of TV airtime sales and marketing, Eric Lynge, said the network has resisted matching the competitor's discounts.
"Our discount levels continue to be significantly smaller than those of our competitors," Lynge said.
Sources said MediaWorks had been more "imaginative" in packaging discounts into bonus deals for big media agencies, some of them amounting to "non-preemptible" bonuses. These allow advertisers to lock in primetime spots that cannot be displaced by late-coming ads paying a higher rate.
Agency chiefs contacted by Media applauded MediaWorks' rate stance, saying it reflected a difficult marketplace. "MediaWorks has been very collaborative and very flexible. If you have a big campaign, they'll go an extra mile to work with you to make it a win-win for all," said one media agency head.
Another media agency chief believes the recovering marketplace will minimise the pressure to discount. MediaCorp's Lynge said that the network had used new packaging of off-primetime and primetime spots to persuade more advertisers of the advantage of TV shoulder time "as a strong marketing platform".
"We anticipate a more buoyant TV advertising market in 2004. Our ratecard remains unchanged and we will look to increase rates should the economic conditions permit it," said Lynge.
TELEVISION ADSPEND - UNDER PRESSURE
Sept 02 - Aug 03
Sept 02-Aug 03 MediaWorks
(NMR, Sdollars m)* annual report
Channel Operator (Sdollars m)
I and U MediaWorks 252 42
5 and 8 MediaCorp 392 N/A
* Figures compiled by NMR are based on published rates provided by
stations and cover brands and campaign duration. Trailers are excluded.