Byravee Iyer
Jan 27, 2014

Myanmar adspend grows, but not in line with expectations

YANGON – Although Myanmar’s newly emerging consumer class has fueled growth in ad spending, the industry may have been overly optimistic about the country's economic renaissance, according to industry executives.

A hoarding for Pepsi in Myanmar
A hoarding for Pepsi in Myanmar

According to Myanmar research agency Marketing Research and Development (MMRD), media spend in 2013 increased 29 per cent over 2012 (excluding radio and pay TV channels, which it doesn’t monitor). There has been a “significant” increase in spend on sponsorship, which is not included in the ad spend figures and therefore may help account for the lower-than-expected growth in advertising spend, the agency said.

“Advertising spend increased about 50 per cent in 2012 over 2011, which is why I expected it to reach $180 million in 2013," said Rose Swe, MD of Mango Marketing. "But it did not come up to that level.” Mango, which works with clients including Coca-Cola and Unilever signed an affiliation agreement with JWT in April last year.

Adspend grew 36 per cent in 2011 and 52 per cent in 2012, but it’s important to note those growth figures came atop a lower base.

Still, the numbers are surprising considering the flurry of brands that have entered the market. Coca-Cola, P&G, Pepsi and Unilever were among the first. Beverage companies like Heineken, ThaiBev and Carlsberg also announced their plans for the country. Telecom players Vodafone and China Mobile have also announced plans to bid for licences in Myanmar.

Among the media, TV has grown the fastest according to MMRD; between 2010 and 2012, spending on TV grew 50 per cent.  However, print, outdoor and radio are also showing strong growth. At present, TV accounts for 64 per cent of the advertising pie, print makes up 28 per cent, and outdoor represents 7 per cent.

The media landscape is still in its infancy. Consumers can choose from seven television channels, including two national, two regional channels and three pay-TV providers. Eleven privately owned newspapers existed as of May 2013, with seven more set to launch. Magazines and journals are circulating well, with about 300 titles in all. Myanmar has limited internet access, but SMS usage is predicted to grow.

One intriguing aspect of Myanmar’s media industry is the popularity of VCDs and DVDs, used to watch local drama shows and Korean movies. According to MMRD, video, VCD and DVD usage is higher than television, reaching 75 per cent of consumers or 33.1 million people. TV advertising reaches about 51 per cent of the population (22.3 million people). Radio reaches 43 per cent, while journals reach 30 per cent. Newspapers and magazines stand at 12 per cent and 8 per cent, respectively.

“TV advertising works best for the mass market as consumers like watching TV programmes,” said Khin Myat Thu, general manager of Y&R Yangon. “You can see that consumer viewership engagement with VCD and DVD is the highest, so there is an opportunity for brands to connect with the rural audience.”

Advertising in the country benefits from its novelty, at least for now. “Consumers still enjoy seeing new commercials as some TVCs can be very entertaining," Swe said. "But they get annoyed if one ad comes often while they are enjoying their drama series."

FMCG brands have been quick to jump on the bandwagon. In 2013, Unilever, Colgate Palmolive, Nivea, Ovaltine and Horlicks were among the top spenders in the market.  

Ad agencies, which stormed into Myanmar a year ago are still trying to find their feet. The WPP group was one of the first movers. Ogilvy & Mather picked up a stake in Myanmar’s leading agency Today Advertising. Y&R quickly followed setting up a joint venture with local partners K-Note Advertising. And JWT tied up with Mango.

At Spikes last year, Swe said that branding is not fully understood as a concept. Demonstrative advertising is still likely to be the most effective. She illustrated this with an example from Unilever’s Clear anti-dandruff shampoo. After two false starts that used glamourous imagery and celebrity endorsement to promote the brand, it finally gained footing with a TV spot that presented the product’s benefits in a straightforward way.

According to Swe, consumers seek fun and entertaining ads that are culturally connected. Agencies are concentrating on activations, events and direct marketing and haven’t started experimenting with digital marketing.


 

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