Media inflation across the Asia-Pacific region has returned to
levels last seen in 1996 and 1997 before the financial crisis swept
through the region; however, a warning bell has been sounded to
television media owners.
According to a MindShare study, no country will see the cost of media go
down this year.
Last year, deflation was reported in Japan and Thailand while Malaysia
held steady.
Media inflation in the key markets of Hong Kong and Singapore are
forecast to increase five per cent this year, compared with 2.5 per cent
and three per cent respectively in 1999.
Television is the main factor fuelling the rise and this has forced
advertisers to shift to a more diverse media mix.
This is most evident in Hong Kong, where TVB - the territory's largest
terrestrial television broadcaster - introduced two new prime time rate
classes, which effectively raised prices by up to 28 per cent.
The new rates, which go into effect in October, sees the highest price
for a single 30-second spot jump from HK$250,000 to HK$320,000 (about US$32,000 to US$42,000).
The hike, fuelled by surging demand for airtime by dotcoms and mutual
provident funds, took the market by surprise because TVB normally
adjusts its ratecard at the end of the year and not during the summer or
autumn months.
However, while advertisers are unhappy with the situation, there is
little they can do about it other than spread their advertising dollars
more evenly among the different media.
AXA Insurance China region general manager, corporate affairs, John
Snelgrove said he won't be pouring additional money into television
advertising although he acknowledged that "we'll be running out of
bullets quicker".
"We're now in a situation where we will have to take a closer look at
media as a whole, because not only is traditional media like television
becoming more expensive, it has become very cluttered so the watchword
in future is to be selective and innovative," he told MEDIA.
Mr Anthony Lau, the chairman of the 2As, said that rate hikes in the
middle of the year could cause chaos to advertising campaigns unless
media owners gave sufficient notice for planning purposes and that any
increases be undertaken with proper rationale, such as higher
circulation or viewership.
"What we don't want is unexplained hikes, which can be very annoying,"
said Mr Lau, who is also HSBC's senior advertising and sponsorships
manager, group public affairs department.
Advertisers across Asia are facing the first increases in media rates
since the economic slowdown, and in Hong Kong, agencies and clients
alike are voicing concerns about "unexplained" hikes.
However, it looks as if they will have no choice but to accept the
increased cost involved.
According to Ms Maggie Choi, Optimum Media Direction managing director
for Greater China, "A lot of advertisers are very upset and frustrated,
but they are trying to find ways around it."
Zenith Hong Kong managing director Alice Lam added: "High costs will
penalise the low-spending categories because TVB works on a bidding
system - the highest bidders get the airtime, the unlucky ones get
pre-empted.
But if prices continue going up, it will be harder to justify the cost
of television to clients."
MindShare Asia-Pacific chief executive officer Kelly Clark said his
agency's latest forecast shows that Asian economies were firmly on the
road to recovery.
This was reflected in adspend surging in the first six months of this
year, from 10 per cent for New Zealand to a high of 45 per cent for
Indonesia, according to ACNielsen Media International.
"Much of the cost inflation we are now experiencing is being driven
simply by increased advertiser demand for a finite supply of TV
airtime," he said.
"It does not necessarily reflect an increase in the quality of TV
programming or audience ratings performance, and that should sound a
loud warning bell."
Mr Clark added that TV stations were assuming the good times would
continue:
"We're not convinced that will be the case. Advertisers in almost every
category are considering alternative channels," he told MEDIA.
"So TV media owners should consider pricing policies carefully and, just
as importantly, look for new ways to demonstrate their contribution to
marketing programmes.
"Otherwise, their revenue base will increasingly be challenged by other
media channels."
Mr Clark added that the outdoor medium was becoming a viable alternative
to TV, depending on communication objectives.
Another market suffering from high television media inflation is
Indonesia.
Ms Christine Barki, president director of PT Metropolitan Retailment,
which runs Metro Department Store, described the television scene as
going "haywire" since the economy stabilised.
"It's come to the stage where it is very difficult to plan long-term
campaigns, she said.
Although dotcom companies have been grabbing the headlines this year for
their contribution to advertising expenditure growth, MindShare's
research showed that 'New Economy' advertisers were not the key drivers
of expenditure growth and inflationary increases.
Categories such as pharmaceuticals and telecommunications are
contributing greater growth in advertising spend, putting further
pressure on media supply and the resulting cost inflation.
MEDIA AND CONSUMER INFLATION 1998-2001
1998 1999 2000 2001
(Actual) (Actual) (Forecast) (Forecast)
% % % %
Hong Kong Media 2.5 2.5 5.0 5.0
Consumer 2.6 -3.3 -1.6 2.3
Taiwan Media 4.0 9.0 9.0 9.0
Consumer 1.7 0.2 1.4 2.2
China Media 13.0 12.0 7.0 7.0
Consumer -0.8 -1.3 0.5 1.9
Japan Media -2.3 -0.7 2.7 3.1
Consumer 0.6 -0.3 -0.5 -0.1
Thailand Media -12.0 -6.0 6.0 7.0
Consumer 8.1 0.3 2.3 4.0
Singapore Media 6.0 3.0 5.0 7.0
Consumer -0.3 0.5 1.6 2.0
Malaysia Media 0.0 0.0 6.0 5.0
Consumer 5.3 2.8 2.7 3.2
Vietnam Media 22.0 15.0 13.0 13.0
Consumer 8.9 4.3 0.0 4.5
N Zealand Media 2.0 1.0 2.0 2.0
Consumer 1.6 1.1 2.1 1.9
Australia Media 7.5 3.9 8.0 5.0
Consumer 0.8 1.5 4.9 3.5
Indonesia Media -2.0 40.0 19.0 17.0
Consumer 57.6 20.5 5.8 6.8
Philippines Media 15.0 17.5 18.0 18.0
Consumer 9.7 6.7 5.5 5.4
South Korea Media 9.8 16.0 14.2 14.4
Consumer 7.5 0.8 2.1 2.8
Sources: MindShare, EIU.
ASIA-PACIFIC ADEX
JAN-JUNE 2000
TV Newspapers Magazine Radio
Australia
(AUS$000's 1,390,154 524,605 204,964 263,276
China (RMB000's) ****** 24,101,984 8,446,507 328,146 -
Hong Kong
(HK$000's) 5,566,698 4,840,529 1,589,808 477,737
Indonesia
(RPdollars Million's) 2,645,251 778,766 185,968 -
Korea
(Won$000's) 1,003,433,681 1,729,834,393 132,799,785 102,941,553
Malaysia
(Rt$000's) 385,787 855,384 54,392 41,165
New Zealand
(NZD000's) ******* 530,639 164,396 57,490 58,205
Philippines
(Pesos 000's) 18,236,540 3,513,360 1,079,310 4,757,130
Singapore
(S$000's) 248,735 353,528 30,796 35,465
Thailand
(Bt$000's) 14,435,962 8,889,525 1,168,637 2,420,358
Vietnam
(US$000's) 31,510 11,855 3,694 -
Cinema Other Total YOY %
Australia
(AUS$000's 18,135 39,209 * 2,956,075 14.75%
China (RMB000's) ****** - - 32,876,637 44.07%
Hong Kong
(HK$000's) 6,030 379,255 ** 12,860,057 20.41%
Indonesia
(RPdollars Million's) - - 3,609,985 45.63%
Korea
(Won$000's) - - 2,969,009,412 35.21%
Malaysia
(Rt$000's) 4,514 14,234 *** 1,355,476 29.09%
New Zealand
(NZD000's) ******* 3,391 - 814,121 10.25%
Philippines
(Pesos 000's) - - 27,586,340 17.37%
Singapore
(S$000's) 11,318 34,954 **** 714,796 28.36%
Thailand
(Bt$000's) 144,380 736,067 ***** 27,794,929 26.84%
Vietnam
(US$000's) - - 47,059 37.98%
* Others - outdoor
** Others - LRT, sound ads, airport, MTR, KCR
*** Others - Rediffusion, video, point of sale
**** Others - Rediffusion, busbacks/Top, posters
***** Others - billboard, bus shelters, Bus Body Impact, busback & bus-
sides
****** China: Year 2000 figures are based on 1999 media coverage : 219
TV channels and 180 newspapers and 47 magazines
******* New Zealand: excludes direct mailing
Note: AdEx is an estimate based on published rate cards. No discounts
are taken into consideration.
Source and copyright: ACNielsen Media International.
