The extension of Starcom into new diversified business units is in line with its strategy to counter the slow-down in mainstream media spending, which is expected to grow only 6-8 per cent this year, compared with double-digit growth in recent years.

Total media spending in the first five months grew only 1.29 per cent to Bt37.7 billion, up from Bt37.2 billion in the same period last year.

"The market for mainstream media is quite competitive, and we need to seek new business areas, or what we call 'blue ocean' areas. Extending ourselves to new diversified areas is a way to promote sustainable growth within the company," said Starcom Thailand CEO Atipol Ithivatana.

Over the next three years, about 30 per cent of the company's billings are expected to come from new business.

Xpanse, Starcom Thailand's second diversified unit - after media-activation services Consumer Contact, which now contributes about 5 per cent of total billings - will provide total communications services to business clients in fast-moving consumer-product areas that want to deliver messages directly to their clients upcountry. The most effective media upcountry include billboards, caravan units, in-store materials, radio and cable television, as opposed to television, radio and newspapers in Bangkok and other major cities.

"Thai consumers have changed their behaviour and lifestyle, and this creates new market segments. There are many products launched catering to specific groups of consumers," said Atipol.

Melissa Ho, regional director of specialist solutions for Southeast Asia at Starcom's regional headquarters in Singapore, said the new upcountry communications initiative was created at Starcom's India operations in February 2006 and that Thailand was the first market outside India for the launch of the diversified initiative.

The new Xpanse unit will work as a full-service upcountry media agency and a planning consultancy for designing appropriate upcountry communications initiatives. It will monitor service agents and the results and feedback from communications initiatives launched upcountry.

In addition to Thailand, Starcom also launched an "out-of-home" communications service in Indonesia on Tuesday.

Kwanchai Rungfapaisarn

The Nation