Turbulent year ahead expected for ad firms

This will be another difficult year for the local advertising industry, which is projected to grow only 5 per cent in the most optimistic scenario of a peaceful political climate.

However, the Bt90-billion advertising industry is expected to witness a solid decline this year if there are any violent incidents in the country.

Witawat Jayapani, president of the Advertising Association of Thailand, said the political situation would be the main criterion in determining the growth or otherwise of the industry this year.

"Business entrepreneurs are able to manage other economic factors such as the rise in petrol prices and handle them to a certain extent. The instability of the political situation seems to be an external factor and beyond the control of the business sector," said Witawat.

He said political instability would have an impact on investors' confidence and their investments in the country as well as the sentiment of local consumers and their spending habits.

"While 2007 was considered a gloomy year as everybody waited to see the newly elected government, 2008 will be a 'weird year' as there are many things happening in the country for the first time," he said.

"Thai people were looking forward to a new, elected government, but once it was formed the people remained unhappy," added Witawat.

According to Nielsen Media Research, advertising expenditure dropped dramatically, by 6.9 per cent year on year, in January. Spending also fell by 3.09 per cent year in February and by 3.6 per cent in March. Spending however posted growth of 4 per cent in April due to the peak sales season for summer products and the Bangkok International Motor Show, which generated bigger advertising budgets from major carmakers.

"Advertising agencies need to be cautious in over-expanding their business or recruiting more people," said Witawat.

Wisit Lumsiricharoenchoke, executive creative director of Ogilvy & Mather Advertising, said: "As creative people, we need to make more effort to ensure that our clients get maximum value for the money they spend on advertising. Creativity should take the lead in identifying channels of advertising."

Witawat said that even event organisation had been affected by tougher competition.

"We have seen a greater demand for below-the-line activities this year in the business sector, but at lower average prices. Business clients want to save their budgets during the economic slowdown and look for the event-organising agency which offers them the best price," he said. He added that as an example, the price of one major event had declined heavily from about Bt1 million in 2004 to only Bt300,000 today.

"I think it is the right time for event-organising agencies to have their own association to look after the establishment of standard prices in the industry, similar to the pitching-fee system developed by the advertising association," said Witawat.

The Advertising Association of Thailand yesterday announced the award presentation for the Adman Awards & Symposium 2007 to be held on Friday at the Royal Paragon Hall, Siam Paragon. There were 1,027 entries submitted for the competition,

This year's festival is on the theme of Advertism, reflecting advertising as a cult which kindles the hearts of working people whilst making the industry shine again. The idea is to ward off a  crisis , not only due to difficult clients, political uncertainty or economic decline, but the "cultists'' themselves who  seem to have lost the original spirit of creativity.