Taiwan adspend collapses to first quarter's NTdollars 12.6b

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.

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