Govt advertising spending continues amid private sector cuts due to weak consumption, media agency s

State-run television stations such as the Royal Thai Army’s Channel 5, MCOT’s Modernine TV and the Public Relations Department’s Channel 11 are the preferred outlets for government agencies to promote their public campaigns.  

Rathakorn Surbsuk, trading partner at GroupM, a leading media agency, told The Nation that television remained a must-have medium for both governmental and private advertisers.

Nielsen (Thailand) reported that from January to September, total advertising expenditure from the government sector dropped to Bt3 billion from Bt3.5 billion in same period last year. 

However, Rathakorn said this decline was not a direct result of government spending cuts but was due to the revision of advertising rates in cinemas early this year. Excluding cinema adverts, overall advertising expenditure from government agencies in the first nine months was about Bt2.8 billion, almost exactly the same as in the same period last year. 

The Prime Minister’s Office remained the biggest advertising spender in the government sector with Bt852.84 million in the period, followed by the Industry Ministry with Bt246.84 million, the Bangkok Metropolitan Administration (BMA) with Bt242.61 million, the Defence Ministry with Bt225.30 million, and the Public Health Ministry with Bt166.42 million.

“The government agencies’ pattern of using media remained unchanged,” he said, adding that new media like cable and satellite TV were still a low priority for their advertising budgets compared with traditional media such as free-to-air TV, newspapers, and billboards.

According to MCOT’s financial reports for the second quarter, Modernine TV enjoyed growth in revenue from government bodies such as the BMA, the Public Health Ministry, the Social Security Office of the Labour Ministry, and the National Village and Urban Fund Office.

MCOT president Anek Permwongseni said his company projected Bt800 million in revenue from government advertising and sponsorship via Modernine TV. In the first nine months, the company had already received Bt600 million from government agencies, up from only Bt400 million in the same period last year. 

Rathakorn said some advertising by the Defence Ministry was done via Channel 5. 

Chalakorn Panyashom, executive vice president for television business and special events at Workpoint Entertainment, the operator of a satellite TV channel, said revenue from government advertising remained unchanged this year. 

He added that the company had received the same amount of ad spending from the same government clients as previously. 

According to Bualuang Securities, in the third quarter, Workpoint Entertainment generated about Bt170 million in profit, up by 25 per cent over the same period last year. Two government projects worth Bt50 million contributed to Workpoint’s ad revenue in the quarter. 

Rathakorn predicted that because of weak consumption, the advertising industry next year would face the same situation as this year. But he hoped that the educational campaigns to build public awareness about the move to digital terrestrial TV broadcasting led by the National Broadcasting and Telecommunications Commission would be a positive driver for the industry’s growth in 2014. 

Meanwhile, the government’s mega-projects such as high-speed rail would also require advertising and public relations activities. This would be another factor boosting the industry, he suggested.