The advertising industry this year will grow less than five per cent from Bt88 billion last year unless a general election scheduled for October gives a clear picture of the new government, Far East DDB managing director Dan Zonmani said yesterday.

Zonmani said confidence in Thailand's business sector had been shaken by many negative factors, particularly an economic slowdown, political uncertainty and violence in the southern region.

Many companies are delaying their plans to allocate money for advertisements and marketing activities.

However, if the general election takes place on schedule in October, it might boost confidence in the business sector as companies will be able to know in which direction the country is headed and set their own business plans accordingly, he said.

He predicted 8-per-cent growth in that scenario.

Zonmani added that the general election this time would not generate a high cash flow within the ad industry as elections usually do. First, the Royal Decree effective since last August 24 until election day limits political parties to advertise in specific media only including billboards and ads on the Skytrain. Second, so far only two political parties - the Democrats and Prachastat - have conducted serious ad campaigns.

Far East is responsible for creating campaign ads for the Democrat Party.

Zonmani expects that the business environment in Thailand will improve after the general election so that corporate companies will be stimulated to spend more.

So far, the gloomy business outlook has caused Far East to lower its expected billing target this year to a five per cent growth in line with expert forecasts. They had earlier targeted 15-per-cent growth on the Bt1.2-billion billing last year.

During the first half of this year, Far East generated Bt500 million in billings, down three per cent year-on-year.

In term of clients, a local major housing developer, Land and House, and Carabao XO energy drink, which belongs to Carabao Tawandaeng Co Ltd, stopped ad spending with Far East.

However, amid this situation, the company is taking the opportunity to restructure its working environment to create the image of a modern agency instead of its current traditional look. So far, the company has invested Bt6 million-Bt7 million to improve the working place as well as adding new facilities like the Dee Dar Bar for the creative staff to relax.

The company is also applying a new management system called Matrix, featuring cross-function working between each department.

Dan said Matrix would decrease the hierarchy within the company and enable staff at all levels to feel more relaxed in sharing their knowledge and opinions with high-ranking executives.

While improving itself, the company is focusing more on the work with its current 25 corporate customers rather than fanning out for new clients.

After all improvements are completed this year, Far East will fully start driving growth again next year by strengthening the work of its current clients and gaining new ones, particularly local middle-sized companies and international corporations.

At the same time, the company expects its billing to eventually achieve 15-per-cent growth. Currently, international clients account for 22-23 per cent.

Nitida Asawanipont

The Nation