2014 ad spending growth put at 5%

The Media Agency Association of Thailand (MAAT) forecasts that advertising spending next year will grow by just 5 per cent, held down mainly by a sluggish economy and political uncertainty.

“After the slowdown in advertising spending during the current quarter, by the end of this year we expect to see only 3-per-cent growth in total spending from Bt113.75 billion last year. We also estimate that next year will see only 5-per-cent growth,” said Wannee Rattanaphon, chairwoman of the MAAT. 

According to Nielsen (Thailand), in the first 10 months, advertising spending posted just 1.56-per-cent growth to Bt95.78 billion. Last year, the industry enjoyed almost a 9-per-cent surge to Bt113.75 from Bt104.75 billion from 2011. 

Wannee said that since the second quarter of this year, many businesses in the fast-moving consumer goods (FMCG) sector had cut their advertising spend after facing a decline in sales due to consumers’ poor purchasing power.

Wannee mentioned big spenders like Unilever (Thai) Holdings, Procter and Gamble (Thailand) and L’Oreal (Thailand) as examples in this regard. From January to October, Unilever spent Bt5.627 billion on advertisements, a slight year-on-year decrease from Bt5.649 billion, while Procter and Gamble poured in Bt1.58 billion, down from Bt1.93 billion in the same period last year. L’Oreal also cut its spending from Bt1.53 billion in first 10 months of last year to Bt1.32 billion in the same period this year. 

Meanwhile, many advertisers have taken a wait-and-see approach on spending on adverts for the coming festive season.

She suggested that digital media and upcoming digital TV channels would be among key trends in advertising spending next year. Because of the rise in smartphone users in line with the expansion of third-generation wireless broadband Internet in the Kingdom, consumers tend to consume more information and video content via their smart devices.

The MAAT predicts that the industry will witness more than 50-per-cent growth in advertising expenditure via Internet channels such as social media, banner adverts and viral video clips, on par with this year’s figure. 

Once the 24 new commercial digital terrestrial television channels are established, the industry expects to see some advertising relocate from cable, satellite and analog channels to digital TV from the second half of next year. 

However, Wannee believes that the advertising investment via cable and satellite TV will continue to rise by 25-30 per cent in next year, as those channels could help advertisers communicate directly to specific audiences, unlike the six analog free-to-air channels, which cater to a mass audience.