Total advertising spending to drop 10% this year
Thailand’s total advertising spending across all media outlets will see a 10% decline this year due to unfavourable economic conditions and the mourning period for the late King.
Ad spending in 2015 grew by 3.3% to 122 billion baht, up from 118 billion in 2014.
Wannee Ruttanaphon, chief executive of IPG Mediabrands Thailand and vicechairman of the Media Agency Association of Thailand (MAAT), said ad spending on all media outlets in October and November dropped by 8% as the country entered a period of mourning for the King’s passing on Oct 13.
Normally, ad spending in the fourth quarter is much higher than other quarters as it is the festive season, she added.
Ms Wannee said the government needs to implement more stimulus measures to boost consumer confidence and domestic consumption.
During the first nine months of 2016, total ad spending fell by 5.4% to 91.4 billion baht, according to Nielsen Thailand.
Among all media outlets, ad spending on the internet saw the highest rise of 73.6%, followed by outdoor media at 34.2%.
On the other hand, ad spending on cable TV saw the biggest drop at 37.2%, with magazines down by 29.2%. Meanwhile, spending on digital TV went up by 5.6%.
MAAT predicted ad spending on digital TV will drop by 14.4% while radio, newspaper, magazine and out-of-home media will see declines of 6.5%, 19.9%, 26.7% and 8%, respectively.
Spending on the internet, transit media and cinema, however, is expected to surge by 30%, 11.7% and 3.2%, respectively.
Cable and satellite TV will see their ad spending down by 4.8%.
Online advertising is seeing a sharp surge as the ad expenses are lower than traditional media.
In the first nine months, MAAT reported a 6.1% decline in total ad spending on all
media outlets.
Ms Wannee is optimistic that even though there are several forecasts predicting that total ad spending on all media outlets will fall by 10% this year due to the tepid economic recovery and unpredictable political situation, ad spending will rise by 4% in the beginning of next year on the back of improving exports and state investment in megaprojects.
However, she said media agencies should prepare more effective media and strategy planning in a bid to connect with their targeted audiences amid the intense competition.
IPG Mediabrands is calling on media planners and brands to adjust their strategies during the economic slowdown, while ad agencies should advise brands and companies to use various media to better reach target clients.
She said the only way to survive in the industry is to create something new and offer their clients the most cost-effective tools as digital TV and the internet are set to take a bigger slice of the market in the future.