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.
