TAIPEI: Taiwan's total adspend collapsed by 10.2 per cent in the
first quarter against what has been described as abnormally high
spending levels achieved because of last year's presidential race.
Just released statistics from Rainmaker Industrial show adspend of
NTdollars 12.6 billion (USdollars 383 million) in the first quarter
compared with NTdollars 14.1 billion last year.
K. F. Lee, chief executive officer of Carat United Media Services,
blamed last year's presidential race for the sharp downturn. "Adspend
for 2000 was high because of the presidential election on March 18 so
this year is low in comparison," she said.
"The other is that record companies began a boycott of cable TV when it
announced it would raise its rate card. That was late February."
Rainmaker's figures bear out Lee's observation. In March, Taiwan's cable
TV spend plummeted by 41.4 per cent compared to the same month in 2000
after January and February's double-digit growth. Terrestrial TV also
took a hit that month, dropping 19.5 per cent, a significantly larger
decline from the 6.8 per cent and 13 per cent dips of the first two
months.
Bessie Lee, general manager of MindShare Taiwan, said terrestrial TV's
woes stem from a long-standing problem. "The government terrestrials -
TTV, CTS and CTV - have been losing market share to cable TV since the
mid-90s," she said. "The privately-run cable TV companies have much
better business sense." In fact, 2000 was the first year that Taiwan's
cable TV adspend surpassed that of terrestrial TV. This was again true
in the first quarter of this year. Cable TV's NTdollars 3.8 billion in
adspend was 30.4 per cent higher than terrestrial's NTdollars 2.9
billion. Combined, they account for half of Taiwan's ad revenue.
As for March's drop in adspend, MindShare's Lee described it as
"seasonal" to a certain extent. "The economic situation isn't so good
now, and clients usually cut budgets right after Chinese new year."
Another key factor is a slowdown in telecom spending. "Mobile phone
penetration is nearly 80 per cent. The need for advertising for new
customer acquisition is no longer there," said Lee.
ESTIMATED EFFECTIVE ADSPEND
Media 2000 Adex 2001 Adex
Jan-Mar Jan-Mar
Unit: NTD'000
Terrestrial TV 3,378,498 2,929,123
Cable TV 4,336,130 3,818,665
Newspaper 4,287,701 3,853,985
Magazine 1,530,278 1,488,157
Radio 530,599 545,007
Total 14,063,207 12,634,938
Source: Rainmaker Industrial Ltd.
