Advertisers will be conservative
Advertisers are expected to be more cautious with their spending next year, given that domestic consumption has not yet fully recovered in light of geopolitical conflicts across the globe that could dent consumer confidence.
"We believe that major advertisers will take into consideration a number of the uncertainties lying ahead next year, so they might be more cautious in investing in advertising. The approach they adopted this year will continue," said Pathamawan Sathaporn, managing director of Mindshare Thailand.
The company expects the advertising industry to grow by only 3-6 per cent next year.
The growth forecast for 2015 was originally set at 4-7 per cent, based on the official economic-growth forecast of 2-4 per cent. In the first nine months when gross domestic product expanded by only 2.9 per cent, the industry was unable to achieve the original growth target.
In the first 11 months, ad spending remained in positive territory, increasing by 4.20 per cent from the same period last year. Total spending as at the end of November stood at Bt112.46 billion, compared with Bt107.92 billion in the first 11 months of 2014. According to Pathamawan, several advertisers may cut any unnecessary spending amid uncertainties. This was reflected in this year’s advertising spending.
According to Nielsen Thailand, in the first 11 months, all but one consumer-product company, included in the top 10 biggest ad-spenders, had cut their advertising budgets. Only Procter & Gamble boosted its spending, from Bt1.21 billion last year to Bt1.51 billion.
Though remaining the biggest spender, Unilever slashed its outlay by nearly Bt1 billion. Its spending worth Bt7.41 billion in the period was 8.7 per cent less than its Bt8.12-billion outlay in the same period last year.
Ranked third, Beiersdorf (Thailand)’s ad spending was cut slightly to Bt2.46 billion from Bt2.47 billion. Ranked ninth, L’Oreal (Thailand) spent Bt1.48 billion, down from Bt1.58 billion.
Among the top 10 spenders, four lowered their spending while six – including the Prime Minister’s Office – increased it. The office’s 11-month spending rose by 65.5 per cent from Bt1.11 billion to Bt1.84 billion.
Pathamawan said Mindshare hoped the economic situation would improve.
TV and digital media are expected to play a key role in the media industry next year. Advertisers continue to spend on these media. But it looks like bad news for newspapers and magazines, as brands are likely to shift their advertising to digital media instead of those printed media.
The rise in the number of mobile Internet users via smartphones is a key driver in this regard. With the arrival of fourth-generation wireless broadband, the number of mobile Internet users in the provinces is also expected to expand. Accordingly, social-media users will follow suit.
"This development opens more doors for brands to collect real-time data generated by consumers who are connected with online media," Pathamawan said.
Analysts suggest that brands utilise and analyse big data collected from connected media to develop holistic marketing communication strategies on top of the use of powerful traditional media.
According to analysts from various sources including the Digital Agency Association of Thailand, Google, Nielsen Thailand, Facebook, Line, Marketing Oups and the National Electronics and Computer Technology Centre, there are now 96.4 million mobile phones in use, of which 48.2 million are smartphones. Consumers are online almost four hours day.
In preparation for this challenge, Mindshare is planning to increase the number of data analysts it has to at least 10 from four currently. The agency has also invested in a "loop room", which is equipped with advanced technology to collect consumer data as well as to analyse big data for help clients modify their marketing strategy.
