As consumers cut back, ad spending may fall 2%

"Consumers are experiencing a higher cost of living but their incomes are still about the same, so they're very careful about spending," Leo Burnett managing director On-usa Lamliengpol said yesterday.

"Advertisers have to shoulder steady rises in manufacturing and operating costs. So they're very cautious on ad spending," she said.

Consumer inflation touched the highest level in 10 years at 7.6 per cent last month, while media inflation has climbed by 10 per cent already, driven mainly by television.

Leo Burnett has seen many clients thinking harder and spending more time discussing plans with the agency to ensure their spending would bring good returns.

None of its clients has cut back on its budget yet but some have delayed their spending plan while others have spread their ad spending over more media channels and learned to integrate those channels instead of focusing on a few specific ones.

The agency is being conservative with is revenue target. Instead of working aggressively to get new corporate clients, it has focussed on existing ones.

As the economy changes, creating thinking has also changed from the "idea era" of the last century to the "people era", On-usa said.

The idea era was the time when creatives always thought of how to make advertisements look different from others just to catch consumers' eyes, while the people era was when creatives had to really get into consumers' lifestyles and inside their thinking.

"Consumer insight or consumer surveys are not enough now. They are just on the surface. Creatives really need to get into their feelings, which they don't actually tell you when you do consumer research," she said.

"We might have to get into their homes and spend time with them to know what their aspirations and fears are," she said.

 "This may allow us find the best way to reach consumers. We want to create brand experiences that have a lasting impression on viewers."