April 22, 2014 00:00 By Watchiranont Thongtep The Nat
Unabated political chaos, volatile economy to blame
Advertising expenditures last quarter dropped 6 per cent to Bt24.68 billion from Bt26.48 billion in the first quarter of last year, according to Nielsen (Thailand).
A media analyst said yesterday that the reason was the prolonged political unrest and volatile economy in the country since late last year.
The media research house found that only cinema ads showed growth – up 44 per cent to Bt1.73 billion from Bt1.2 billion – while spending on other media like television was even.
From January-March, marketers and product owners spent just Bt15.39 billion, or 62 per cent of the industry's value. This was down by almost 7 per cent from Bt16.53 billion. Newspaper ads dived 21 per cent to Bt2.97 billion from Bt3.5 billion. Radio sagged 13 per cent to Bt1.2 billion.
Ad spending for magazines, outdoor media, transit media, in-store or even the Internet also followed this trend. Magazines slumped by 21 per cent to Bt1.01 billion, in-store media 33 per cent to Bt343 million and the Internet by 8 per cent to Bt193 million.
Outdoor media was off slightly by 1 per cent to Bt1 billion and transit media by the same percentage to Bt810 million.
An analyst at KKTrade Security, part of Kiatnakin Phatra Financial Group, said cinema ads were expected to see strong growth last quarter.
From February-March, cinema ad spending recovered by 19 per cent because ad agencies and product owners were eager to boost sales in the high season this month after suspending their plans due to the political uncertainties.
According to Nielsen, last month alone, major brands like Coca-Cola beverages, Wall's ice cream, Toyota's pickup truck, Kasikornbank and Isuzu's pickup increased their ad budgets for media.
The improvement in cinema ads was the direct result of the blockbuster line-up including “300: Rise Empire”, “Divergent” and Thai title “Kid Teung Wittaya”.
Other media also witnessed the same trend as cinemas. Channel 3 appears to be a big gainer because its evening drama series “Sameethreetra” drew a high TV audience rating as well as ad revenue while other channels like 7 and 5 suffered a decline.
The analyst predicts that the Fifa World Cup Final in June would not drive the media industry as had been expected except RS, which holds and manages the broadcasting rights to this soccer tournament.
However, the drawn-out political unrest and unpredictable economy still dampened local spending and confidence in terms of purchasing decisions. Ad spending via in-store media also faced a slowdown.