Thailand's Bt80-billion advertising industry is expecting a flat year amid a negative economic environment and political uncertainty.

Business players have shifted their budget to below-the-line activities rather than media advertising.

The stagnation in advertising expected for this year follows double-digit growth for the industry over each of the past three years: 12 per cent, 17 per cent and 12 per cent, respectively.

"Ad agencies have lost their power to generate good income like before. Business players have diluted budgets to spend on media advertising and instead shift funds to below-the-line activities like marketing events and activities," said Punnee Chaiyakul, vice chairman of Ogilvy & Mather Thailand, and managing director of Ogilvy & Mather Advertising, the parent company's advertising agency.

She said spending on media advertising increased only 4 per cent in the first half of the year, as reported by Mindshare, the media buying agency within the Ogilvy & Mather Group. The inflation rate in the local media industry has climbed around 10 per cent a year.

Punnee said Ogilvy & Mather Advertising's revenue proportion to the group had dropped gradually, from 85 per cent in 1990 to only 65 per cent today. Another 35 per cent of revenues was shared by other communications and below-the-line activities like event marketing, public relations, direct marketing, customer-relations marketing and digital and interactive media.

"However, I believe advertising will maintain its current business proportion for at least five years. The implementation of one-on-one marketing requires a good and systematic zoning of households. The zoning of households and residential units in Thailand, particularly in Bangkok, is not well organised," said Punnee.

She aid local political uncertainties were another negative factor harming the advertising industry, because they block the issue of new laws and regulations related to advertising.

At least 15 companies cannot list themselves on the stock market and launch initial public offerings (IPOs) during this time of political turbulence. They have also frozen their advertising spending on IPO campaigns.

Punnee said the only positive event for the industry was the Fifa World Cup tournament.

At least 10 World Cup-related television commercials have been launched, particularly for home appliances, televisions and food products, in an attempt to cash in on the great occasion of football fever. But the World Cup drops its final curtain on Sunday, and no other good business opportunities are expected for the rest of the year.

Ogilvy & Mather Advertising said yesterday it continued to dominate the field by scoring huge wins in local and international advertising awards this year. Including being named 2006 Agency of the Year at Thailand's prestigious AdMan Awards, the company bagged a total of 51 awards - more than twice that won by the first runner-up. On the international scene, Ogilvy & Mather Advertising also figured prominently at Cannes at this year - the world's most coveted advertising awards - by garnering four Lions.

Kwanchai Rungfapaisarn

The Nation