mindshare expects flat growth at best

Mindshare Thailand, a media planning firm, predicts that the country's advertising spending next year will be flat or could even contract from this year's level, due to cautious spending amid the global economic slowdown.

Stephanie Bell, leader of Mindshare Indochina and the Philippines, said the slowdown - which has reached the level of recession in the United States and many European countries - meant a tough year ahead for all countries.

Although Asian economies are physically distant from the crisis and are expected to be relatively slightly impacted when compared with the US, it is clear that next year will be a tough time for several sectors.

Mindshare forecasts overall advertising spending in the local market next year to show flat growth from this year. However, if the political and economic situation worsens, it may revise its forecast downward on a quarterly basis.

"Even if total advertising spending next year is lower than this year, the rate should not go fall by double digits as it did after the 1997 financial crisis. This is because the current economic fundamentals are stronger than during that crisis period," Bell said.

In 1998 - one year after the eruption of the "Tom Yum Kung" crisis in Thailand - ad spending crashed by 23 per cent.

For this year, Mindshare predicts ad spending to decline by 2-3 per cent from Bt91.71 billion in 2007. However, some brands may view the gloomy economic situation as opportunities to increase their competitiveness and create long-term deals to benefit them in the future, she added.

Bell said consumers were expected to spend longer at home next year, which means the media consumption rate for television and online ads should increase more than for other media channels.

She said the marketing strategy trend in 2009 would rely on social networking, which has increased significantly this year. Examples of social networks are small communities, particularly online ones such as Web blogs and the Hi5, Facebook and Pantip websites. These channels are very strong when it comes to spreading an advertising message.

Besides, digital marketing is one widespread media channel that has grown significantly this year. Examples of digital media channels are in-store media, screen media on the BTS Skytrain, as well as mobile phones and Blackberry devices.

Bell expects Mindshare's revenue this year to grow by 11 per cent, higher than its earlier expectation of 10 per cent. It expects next year's revenue to increase by 9 per cent.

Paul Gibbins, leader of Mindshare Thailand, said ad spending in the first 10 months of the year declined from Bt75.18 billion in the same period last year to Bt74.13 billion - a 1.4-per-cent drop. Spending was good in the first nine months, as the new government was formed and the Olympic Games in China stimulated spending. But the numbers dropped in October, mainly due to the global financial crisis.

Rathakorn Surbsuk, head of the exchange, Mindshare Thailand, said the mass media - which he called "must-have media" - such as television and newspapers would still grow next year, while outdoor media would face a downturn as people tend to stay at home more.

Outdoor media such billboards are an efficient channel for property and automobile firms facing a business downturn next year, he added.

Rathakorn said consumer products, financial companies and discount stores would be segments whose spending would be higher than this year's level.