Adex down 0.8% to RM3.1B

But players are not concerned as Q1 is traditionally a slow period

PETALING JAYA: Year-to-date (YTD) April 2012 advertising expenditure (adex) in the country slipped 0.8% year-on-year to Rm3.15bil, according to data from information and measurement firm Nielsen.

However, industry experts are not pushing any alarm bells yet, as they feel that the numbers are within expectations.

Omnicom Media Group managing director Andreas Vogiatzakis said the figures were not a surprise, pointing out that adex was traditionally slow in the first quarter (Q1).

“Usually, Q1 generates the least amount of ad spend while Q4 generates the most,” he told Starbizweek.

MEC Malaysia managing director Law Chan Keong said adex in the first quarter was slow due to shorter working days in January as a result of Chinese New Year holidays.

“The other reason could also be due to uncertainty in the global economy, especially with the eurozone crisis which has had a chain effect. It’s not about consumer sentiments. Some clients are maintaining a cautious mindset in terms of spending.

“They’re still investing and spending but they’re adopting a more cautious approach,” he said.

The YTD adex dip was led by free-to-air television, which shrank 9.1%. Newspapers still continued to command the lion’s share of total ad spend, accounting for 42% of total YTD April adex this year.

The product/service categories with the highest ad spend in the first four months of 2012 were local Government institutions, mobile line services, women’s facial care, fastfood outlets and photography.

According to Nielsen, adex in April, however, increased to Rm878.24mil from Rm873.89mil a year earlier.

Vogiatzakis said he expected adex to improve in Q2. “I am confident it will bounce back in Q2, especially with the Euro (European Football Championship in June) and Olympics (in July),” he said.

Law concurred, pointing out that the two sporting events would be critical in determining ad spend for the rest of 2012.

“Also, the timing of the General Elections will be critical, as it will be a factor that will trigger adex growth,” he said, adding that Q2 would be the defining quarter for the rest of the year in terms of ad spend.

“How Q2 performs will set the tone for the rest of the year.”

Vogiatzakis said this year’s adex could mirror that of 2008, which also featured the General Elections, Olympics and Euro tournament that year.

“Ad spend that year began slow and peaked in Q3 during the major sports seasons. Hari Raya was also in Q3, so we expect a huge amount of spend in that quarter (for 2012).”