23 April 2012

Media Sector: Adex dipped 1.4% to RM 2.27 bil because of long festive periods of CNY and Christmas - Nielsen

PETALING JAYA: Total advertising expenditure (adex) in the country slipped 0.9% year-on-year to RM856.21mil last month, according to data from information and measurement firm Nielsen.

For the three months ended March 2012, adex dipped 1.4% to RM2.27bil. However, industry experts were quick to point out that the figures were within expectations.

“The dip in adex came as no surprise, as traditionally advertising expenditure has always been slower in the first quarter (Q1),” Omnicom Media Group (OMG) managing director Andreas Vogiatzakis told StarBizWeek.

He said Q1 adex was often lower, especially after the long festive periods of Chinese New Year (CNY) and Christmas which tends to be quite close together.

“Also with the lack of local economic indications in the early part of the year as well as the cloudy global economic situation, it was within our expectations that advertisers would be more cautious and conservative in spending.

“The still unresolved eurozone sovereign debt crisis and the not-so-robust US economy is generally putting business around the world in a “conservative mode,” Vogiatzakis said.

IPG Mediabrands president (Asia world markets) Prashant Kumar also said Q1 adex was within expectations.

“Yes, this was expected,” he said, adding the adex looked to be picking up after the CNY period.

The adex dip for the month of March was led by online, which fell 28.2% year-on-year, followed by free-to-air (FTA) TV, which shrank 10.5%. Newspapers continued to command the lion's share of total ad spend, accounting for 43.9% of total ad spend in March 2012.

The product/service categories with the highest ad spend in the first quarter of 2012 were local Government institutions, mobile line services, women's facial care, fast-food outlets and photography.

Vogiatzakis pointed out that in tandem with the slower consumer off-take, advertisers usually tend to be more cautious during the first quarter of the year.

“Some advertisers tend to focus their budgets on the festive month. Trend-wise, we see more advertisers skewing their budgets on more targeted and interactive media such as online, out-of-home and cinema.”

He also noted that media consumption was increasingly moving towards digital platforms.

“We see that advertisers have increased their spends on digital, which is only partially captured by Nielsen adex, hence not a true reflection of the market. The category that exhibits lower activity is telecommunication, banking/corporate and top fast-moving consumer goods advertisers.”

Going forward, Prashant said he expected full-year adex to grow 10% in 2012.

“Second and third quarters will be key contributors. Mega activations such as Euro (European Football Championship) 2012 and Olympics will be the key boosters in the next few months, followed by Hari Raya and General Elections thereafter.

“Malaysians are a happy lot of people. Barring some major shocks from the West, we expect a calibrated optimism to prevail for much of the next two quarters.”

Vogiatzakis shared a similar sentiment on Malaysia's adex outlook for the rest of the year.

“Based on the adex trend in the past eight years, it is observed that advertisers generally adopt the saving-for-the-rainy-days approach, with Q1 ad spend typically being the lowest of the year.

“Spending will grow quarter-on-quarter and reach its highest in Q4 in a rush to spend unused budgets. Thus, we would expect to see improvement in Q2. Key advertisers will tend to kick off their marketing efforts to improve sales off-take and also to lead up to key pre-festive seasons such as Hari Raya.”

Vogiatzakis also noted that upcoming events such as the Euro, Olympics and General Elections would boost ad spending, going forward.

“With an overall projected inflation of 13%, a healthy adex should reflect an increase of 15% or more, especially with the major events happening in the third quarter onwards.

“According to the latest Malaysian Institute of Economic Research, both consumer and business sentiments show a positive rebound in Q1, so it very likely that we will see the increased spending happen in tandem.”

Source: www.thestar.com.my


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