Local ad market braced for hit
Written by changthai11 on Tuesday, October 7th, 2008
ADVERTISING
Local ad market braced for hit
WORANUJ MANEERUNGSEE
Thailand’s 92-billion-baht ad industry may be affected by the financial crisis in the United States, which is now spreading to Europe, says veteran advertiser Chaipranin Visudhipol.
The market research industry, on the other hand, is more optimistic. Some market research companies view that tougher competition next year might turn into an opportunity for them because businesses might invest more in market research to cope with falling purchasing power, according to Daranee Charoen-rajapark, the former president of the Thailand Marketing Research Society and managing director of the research firm MarketWise Ltd.
Mr Chipranin, the former president of the Advertising Association of Thailand, said there were no positive indicators for the world economy next year, except the downward trend of global oil prices.
Basically, whenever Europe and America face economic problems and a global recession looms, the parent firms of inter national companies around the world tend to cut their ad budgets. The financial crisis of today may be no exception, in which case the subsidiaries of multinationals in Thailand will be affected.
He noted, however, that for some multinational corporations, the ad budgets of their subsidiaries are not dictated by the parent companies but rather by their own performances.
He predicted the first half of next year would be even tougher for the local ad industry as the impacts of the global financial crisis became full-blown.
”My point of view is that the Thai political situation is no longer a key factor and it’s hard to predict when this
[crisis] will end,” he said.
As for this year, the industry’s growth might contract for the first time since the 1997 financial crisis, he said.
Nielsen Media Research, a research house, reported total ad spending in Thailand inched up 0.18% to 59.4 billion baht year-on-year in the first eight months of this year.
But Ms Daranee noted that the market research market had grown despite the tough times. In any case, industry experts have revised downward the growth target for the 2.64-billion-baht market research in 2008 to 5% from 8% earlier, compared to 7.8% growth in 2007. Like many industries, it has been hit by uncertain political and economic situations.
She said the local market research market last year grew faster than the world average of 6.2%, but lagged behind fast-growing economies like China (12.7%) and India (14.4%).
As well, spending on marketing research here was much lower than spending on advertising. She said per-capita spending on market research in Thailand was $1.21, compared to advertising spending of $36.82. On the other hand, spending on marketing research was only 3.3% of total ad spending.
”The more advanced the economy, the higher the spending on market research,” she said, adding less research spending meant Thais missed a chance to experience new products that might better suit their needs.
