Thai adspend tipped to show zero growth

BANGKOK: The Thai advertising industry is expected to show zero growth this year as spending levels have slowed to a snail's pace in the third quarter, according to the latest figures by ACNielsen. The industry was already preparing for a tough second half of the year due to the global economic slowdown, but the situation has been exacerbated by the September 11 terrorist attacks in the US. Research figures show that media spending grew over the first nine months of this year by seven per cent, but once inflation, media packages and discounts are factored in, actual growth is likely to be non-existent. "The ad market is flat and it is going down," said OMD managing director Martin Dufty. According to ACNielsen's figures, media spending from January to September totalled 39 billion baht (US$875 million). Last year's spending reached 51 billion baht, a 23 per cent jump from 41 billion in 1999. However, while most media fared reasonably well compared to last year, for instance, magazines showing a 20 per cent growth, a look at figures for September paints a more realistic picture. TV saw an increase of six per cent, which in reality is a marginally negative growth performance, but the second- largest media spending category, newspapers, reported a 25 per cent drop. CIA Media Innovation managing partner Ichaya Santitrakul, who is also vice-president for media of the Advertising Association of Thailand, said advertisers were cutting their spends and looking at more below-the-line activities, such as product placements in popular television shows, event marketing and public relations. As the industry looks set to lurch into an uncertain year in 2002, advertising rates are likely to remain at this year's level, at best. The recent move by TV channels 3 and 7 to increase ad rates sparked an uproar among leading agencies. It is likely that both channels will now drop their rate hike plans, especially after Channel 7's prime-time advertising bookings fell by a reported 30 per cent last month. "All media rates will not increase until the war has stopped, except perhaps for popular magazines Dichan and Elle," claimed Ichaya. However, Ichaya predicted the mobile phone category would continue spending. Mobile operators, AIS, DTAC and Digital GSM are the top three largest spenders in the biggest-spending category. With the expected launch of the Orange mobile service at the end of next year, market incumbents are poised to spend heavily to protect their market share.

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