GroupM forecasts slight growth in Thai ad

"We are predicting real advertising spend next year will grow slightly, after very flat growth this year, which has been a difficult year for the industry after experiencing a weak [domestic] economy, in line with poor consumption. Many advertisers have pulled back on spending as sales have not been up to expectations," Kevin Clarke, chief executive officer of GroupM Thailand and Myanmar, said yesterday.

GroupM currently manages about 40 per cent of total advertising expenditure in Thailand. Under its parent company, UK-based WPP, the agency has major clients such as Unilever, Procter and Gamble and L’Oreal.

Rathakorn Surbsuk, trading partner at GroupM, said the industry would witness growth of 4-5 per cent next year, against the expectation of either flat growth or a decline of up to 5 per cent this year.

In the current quarter, local business performance appears to be weak, so companies have cut their advertising budgets and allocated the money for online strategy and promotion to boost sales, he said.

"I would say this situation can be seen across sectors, but particularly in consumer products, automotive, and banking and financial services," Rathakorn said.

The Kingdom’s rising stars for advertising next year will be digital television and online media, while the losers will be traditional media like analog TV, print media and radio, according to GroupM’s forecast.

Clarke said some TV stations had gained more significant audience shares from weak incumbents after the launch of terrestrial-based digital broadcasting.

"What needs to be done at those digital-TV stations is that they should create a clear brand identity, targeting specific audiences and offering the right content to attract audiences. If they are able to do this properly, there is still more room for them to increase their advertising rates next year," he suggested.

Apart from digital TV, transit and online media are expected to see positive growth in 2016, Rathakorn added.

An increase in commuters via the mass-transit system in Bangkok, in line with the extended lines of the BTS Skytrain and MRT subway, will present further opportunities for brands and companies, he explained.

Meanwhile, online media will continue to be a key driver for advertising business.

"Advertisers will continue to experiment in finding better ways to connect in a relevant way with their target audiences. Data analytics and use will be the key in helping brands personalise interaction with particular customers. Therefore, programmatic and performance-based models will play an important role," Clarke said.

With prolonged economic uncertainty and further fragmentation of audiences across digital TV and online media, GroupM believes there will not be any significant increase in next year’s pricing for both types of media outlet.

Any ad-rate increase might be less than 5 per cent, said the CEO.