The Land of Smiles has certainly seen better days.
In September last year, army-backed council appointed by Thailand’s own military rulers rejected a controversial draft constitution, further delaying elections and extending the rule of generals who took power in a coup in 2014.
Observers believe elections will not be held until at least 2017.
The World Bank has maintain a gloomy outlook for the country, with the economy expected to slow to two percent growth in 2016 from 2.5 percent in 2015 as high household debt holds back consumption and export growth is subdued.
“Policy uncertainty is likely to weigh on private investment,” the global development lender said in a statement.
Sunny Hermano, Southeast Asia business development & integration director at Havas WW Bangkok said the main issue is a lack of any schedule over the political situation.
“There is no option of thinking ‘I think it’ll be okay, because in 12 months everything will come together’, there’s uncertainty,” he added. “Everyone’s just waiting and the thing is, the longer it takes, the anxiety increases.”
“I’ve spoken to a lot of agency heads in Thailand, and everybody’s hurting,” said Hermano. “No one really complains too much because we all understand the situation but everyone has this ‘wait and see’ attitude, you can see it reflected in people being more cautious in what they buy and what they do.”
He reports that the agency is seeing more project-based work over traditional long-term retainer accounts.
“Some are more cautious and do pilots with us instead,” Hermano added.
The hardest hit segment is small and medium-sized businesses (SMEs), said Hermano, sharing that many B2B clients have approached the agency to assist with helping their partners.
“That’s one of the tasks, to educate their partners on better understanding digital more in order to leverage it,” he said.
Hermano said this trend comes from clients being cautious with their budgets, with many seeing digital methods as a cost effective way of doing “more with less.”
“In Bangkok, when you have a launch usually you just go ‘boom’ and have these mega-events,” he added. “You still have those but more brands are more careful with their spend and looking increasingly at digital execution instead.”
One player poised to enjoy this focus on digital is Sanook Online, one of the largest content portals in the country. It currently claims 40 million monthly users, 80 percent of which are returning visitors.
In 2010, China’s Tencent acquired a 49.92 percent stake in the company for US$10.501 million. Sanook also runs mobile messaging app WeChat in Thailand and engages in a variety of internet-related businesses, including internet advertising, mobile value-added services, e-commerce and casual games.
CEO Krittee Manoleehakul told Campaign Asia-Pacific that brands in Thailand have been fast responders to market changes, and although they still spend their budgets on both traditional and online media, the latter share is likely to get larger.
“It was expected to grow by 62 percent last year to reach 10 billion baht (US$ 282.5 million),” Manoleehakul added. “This figure exceeds the earlier projection of 33 percent, even though the economy has been unsteady.”
Manoleehakul said Sanook has also expanded its business to include mobile applications such as free music streaming service JOOX music and the restaurant-finder iPick.
The company has also set up a branded content team to work with brands who understand the value of content, and know how it can help resolve certain issues or pain points for consumers.
“For example, last year we worked with one of the top sportswear brands and co-created a video showing how office workers can stay fit,” Manoleehakul added.
“We also have to work on a strategy to match our advertising with consumer interests,” he added. “That’s why we have our advertising operations team, with their extensive knowledge of programmatic buying.”
Thailand’s speed kicks into 4G
The end of 2015 saw the conclusion of a long delayed and hotly contested auction for 4G spectrum by telecommunications players, sparking a flurry of investment despite the gloomy outlook for other industries.
The 4G auction is considered a major step in supporting the government's digital economy policy, which is expected to receive 232 billion baht (US$6.42 billion) from the two sets of auctions held in November and December last year.
Sigvart Voss Eriksen, chief marketing officer at dtac said there has actually been an increase in telecommunications spend over the last three quarters.
Sigvart Voss Eriksen
“It’s been very busy. There’s a big fight between brands to win 4G consumers over to their respective camps,” he added. “I haven’t seen any hesitance at all, and on our part, we are aggressively pursuing customers for our 4G mobile internet offerings.”
For the second largest telco operator in the country with more than 25 million subscribers, 2.1 million of which are 4G subscribers, the explosive growth of mobile has necessitated a change in the way dtac conducts both business and marketing initiatives.
“We’re moving from offline to online media, from large screen to small screen – going from segment of many to segment of one,” said Eriksen.
For dtac, this shift began three years ago with a concerted effort to better engaged with consumers via more personalised messaging.
“That’s the most important progress we’ve made, using predictive analytics to give individualised and contextualised marketing,” said Eriksen. “Be it via website, app or other channels, offers will be sent out based on how users are interacting with us, based on context.”
This journey had its challenges, with Eriksen sharing that the first hurdle was deploying a better-integrated system and improving technical capabilities.
“We were introducing real time analytics on top of our data warehouse, it was a difficult journey as it needed a lot of data capacity and short lead times to convert offers,” he added. “As a traditional telco, our systems weren’t ready for it.”
He reports that from zero just one year ago, today 70 percent of offers sent out by the company are contextual, thanks to the significant increase in below-the-line (BTL) capabilities.
“It’s revolutionising how we are interact with consumers and linked to our mission to improve the digital customer journey,” he added.
For one media agency, the use of technology and digital tools is a core part of how it does business in the market.
Mitsuyuki Nakamura, Southeast Asia president at Dentsu Media and CEO of Dentsu Media Thailand, said that even within the region, the Thai consumer stands out as a unique customer.
“Thai media consumption habits are unique, with their use of LINE and YouTube,” he added.
Nakamura said that the agency is tapping into partnerships with major players like Google to develop proprietary data or tools for clients to understand the complexity of consumer behaviours and improve communication design.
With culture and language the biggest barrier to major brands wanting a foothold in Thailand, the adoption of technology that would aid in marketing or brand building efforts can be very slow.
“Adaptation of major technology or methods to the Thai market requires more lead time mainly for two reasons. One is the fact that most media consumed is local media which still need to find tangible benefit to adapt global technology platform,” said Nakamura.
He added that the hesitation behind adoption is mostly due to lack of digital resources which have only recently started getting better, with some leading local media making moves to investing in technology platforms and other solutions.
"Secondly, it’s on client side that the adaption of ad-serving technology which requires a sound technical basis remains at a basic level of usage for many brands,” said Nakamura.
While most solutions stem from other markets, which are quite slow to adjust for local needs, Dentsu remains committed to accelerating the adoption cycle.
One such effort is via the launch of the Dentsu Media Laboratory last year, aimed at incubating local tech startups and “innovative extraction” of cutting-edge global technologies. It is the second such facility outside Japan, with the first in Taiwan.
Nakamura points to a proprietary solution that was successfully introduced to the Thai market, ibutterfly – a location based gamification coupon redemption mobile application, which utilises GPS, Motion Sensor & Augmented Reality technology.
“It brought a new mobile experience to Thai users and new connections between brand and consumer,” he added. “This year we’re bringing more new tech as well as developing our new platform tailored to fit with local flavour.”
The marketing scene is Thailand is poised to get increasingly digital and savvy in the coming months, as agencies and brands alike invest in technology solutions to adapt to an upcoming generation of Thai consumers that want more.