Sluggish spend rise hints at woes ahead

<p>The worse is yet to come for the Asia-Pacific advertising industry, </p><p>which reported a sluggish six per cent rise in advertising expenditure </p><p>to US$13.5 billion for the year to June. </p><p><BR><BR> </p><p>In the first half of the year, most markets posted single-digit growth </p><p>rates - some like Korea and Australia reported sharp declines - compared </p><p>with double-digit increases reported for the same period last year, </p><p>according to ACNielsen data. </p><p><BR><BR> </p><p>However, ACNielsen and media directors say real growth rates could be </p><p>significantly slower because of the larger-than-usual discounting going </p><p>on in order to coax reluctant advertisers to spend. </p><p><BR><BR> </p><p>"Some growth markets such as China, the Philippines and Indonesia are </p><p>believed to have actually experienced little or no growth due to heavy </p><p>discounting which is common during tough economic times," said Forrest </p><p>Didier, Asia-Pacific managing director of ACNielsen Media </p><p>International. </p><p><BR><BR> </p><p>FCB regional media director Mark Pointer agreed. "In a severe downturn, </p><p>media owners might have to resort to drastic measures in order to </p><p>generate revenue." </p><p><BR><BR> </p><p>He also predicted that the second half growth rate would be slower </p><p>compared with the January to June levels. "If six per cent was the real </p><p>figure in the first half, I would be surprised if there was a six per </p><p>cent growth in the second half," Pointer said. </p><p><BR><BR> </p><p>Media directors said that worries about the state of the US and Japanese </p><p>economies were clouding the region's overall outlook. But they are still </p><p>pinning their hopes on China, despite increasing speculation that the </p><p>levels of discounting by media owners were among the highest in </p><p>Asia. </p><p><BR><BR> </p><p>Excluding Japan, China emerged as the biggest advertising market in the </p><p>region although the mainland's growth rate had slowed to 12.6 per </p><p>cent. </p><p><BR><BR> </p><p>At US$5.3 billion, the market is now twice the size of South </p><p>Korea, where adspend has declined by 6.7 per cent to US$2.1 </p><p>billion, following contractions in spending over two consecutive </p><p>quarters. </p><p><BR><BR> </p><p>However, spend by Asia's consumer goods and telecommunications </p><p>categories bucked the overall downtrend. </p><p><BR><BR> </p><p>In the Philippines for instance, Coca-Cola, San Miguel and Mead Johnson </p><p>increased their advertising spend by between 57 and 99 per cent. </p><p><BR><BR> </p><p>In China, pharmaceutical products continued to lead the advertising </p><p>market. </p><p><BR><BR> </p><p>The category is likely to maintain its growth levels after the </p><p>Government raised the spending ceiling for state-owned enterprises from </p><p>two to eight per cent of sales revenue. </p><p><BR><BR> </p><p>Spending in Thailand and Malaysia was supported by telecom wars. In </p><p>Thailand, the two main players, AIS and TAC, accounted for half of the </p><p>adspend of the top 10 brands; while in Malaysia, four telecom companies </p><p>- Celcom, DiGi, Maxis and Telekom Malaysia - made it into the top 10. </p><p>DiGi boosted its adspend by the biggest margin - up 50 per cent. </p><p><BR><BR> </p><p>Intensifying competition between Procter & Gamble and Unilever in </p><p>Indonesia helped pushed the country's adspend up on the back of higher </p><p>spend in the personal care category. </p><p><BR><BR> </p><p>ASIA-PACIFIC ADEX (usdollars millions) </p><p> Jan-Jun 2001 Jan-Jun 2000 YOY change </p><p> (%) </p><p>Australia 1,497.2 1,534.0 -2.4 </p><p>China 5,354.6 4,755.4 12.6 </p><p>Hong Kong 1,810.7 1,724.5 5 </p><p>Indonesia 334.1 268.6 24.4 </p><p>Malaysia 385.6 356.7 8.1 </p><p>New Zealand 339.4 336.0 1 </p><p>Philippines 632.8 528.7 19.7 </p><p>Singapore 412.2 393.3 4.8 </p><p>South Korea 2,126.2 2,278.9 -6.7 </p><p>Thailand 573.8 526.9 8.9 </p><p>Vietnam 49.1 47.1 4.3 </p><p>Total 13,515.7 12,750.1 6.0 </p><p>Source: ACNielsen Media International. </p><p><BR><BR> </p>