Double-digit jump in 2H pushes 2009 adex growth to 7%

The government was the top advertising category last year pushing mobile line services, which have been the top-spending category for the last five years, to second place. With almost RM300 million spent, government institutions also helped to hold up adex which grew 7% to RM6.6 billion, after contracting 1% in the first half of the year.

Ad spend by local government institutions focused on continued influenza H1N1 and dengue awareness campaigns.
The ad spend of mobile line services fell 23.8% to RM288 million compared with 2008, while women’s face care, the third highest-spending category, grew 22% to RM193 million.

“The 7% growth in the Malaysian advertising market was boosted by a double-digit increase in spending in the second half of the year, significantly higher than the second half of 2008 and thereby countering the contraction in spending in the first half of 2009. Increased spending on government health-related awareness campaigns and continued spending on local events like the mid- and year-end sales and new product and service launches have helped the growth in the media sector,” said Sara Liew, associate director, media group, The Nielsen Company in a Jan 29 press release.

Three new entrants made it into last year’s top 10 advertisers by category — hypermarkets (RM116 million) at No 8, furniture retail (RM105 million) at No 9 and beauty salon/hairdresser (RM97 million) at No 10. Mobile interactive services, cinema advertising and bank/finance corporate categories fell off last year’s top 10 in the wake of the global financial crisis.
In terms of growth, hypermarkets saw the biggest jump, registering 44% growth in ad spend which was sustained by on-going price slash campaigns.

Tesco is one of the hypermarkets that spent “a lot of money” last year, said Tesco Stores (Malaysia) Sdn Bhd CEO Chris Bush in an interview on Jan 19. The spending was on both above-the-line and below-the-line advertising. However, Bush would not reveal the amount.

“Advertising for us is very important in making sure that the consumers and the market really understand what your brand stands for, and making sure that consumers and the market understand the value of Tesco is very important,” said Bush.

The government, which increased its ad spend by 42%, was the second fastest-growing category, followed by the fast food centre category, which showed a 39% rise. During the January to September period last year, fast food companies spent heavily on value meal packages promotions and new product launches.

Fast moving consumer goods (FMCG) and telecommunications advertisers continued to lead the top 10 advertiser rankings. Procter & Gamble emerged as the largest advertiser with ad spend of RM189 million, followed by Unilever Malaysia (RM174 million) and Celcom (RM 116 million).

Two new entrants to the top 10 advertiser rankings last year are the Ministry of Health and Telekom Malaysia Bhd (TM). The ministry’s ad spend jumped a whopping 376% from 2008 to RM91 million while TM’s ad spend surged 86% to RM94 million.

Between January and September last year, TM’s ad spend was driven by its “Talk & Save” campaigns along with its various home line and broadband campaigns.

Newspapers and free-to-air (FTA) television continued to command the lion’s share of adex at 52% and 37% respectively. They were followed by radio (6%), magazines and outdoor (2% each), and point-of-sale, cinema and the Internet (1% each).

Advertising spending across most media saw an increase, especially radio which grew 24%, Internet (22%), outdoor (17%) and point-of-sale (16%).

Ad spend for newspapers grew marginally by 3% to RM3.4 billion, driven by continued spending by local government institutions, hypermarket and university categories.

Local government institutions also contributed to FTA television’s 13% growth, along with women’s face care, communications corporate ads and beauty salon/hairdresser categories.

Radio saw increased spending from the tonic and vitamins category, electrical retail and tourism authorities while Internet adex was spurred by Internet service providers, communication and automotive corporate ads.

A point to note however is that Nielsen measures advertising spending based only on published rate cards, except for outdoor. As such, actual adex figures are likely to be lower. In an Oct 13 report last year in The Edge Financial Daily, a Nielsen spokeswoman said the media research firm used official rate cards as the standard to estimate ad spend and could not account for discounts that were not made public. She added that Nielsen had begun the process of collecting discount factors from media owners.

Nevertheless, the industry is optimistic about the outlook for this year’s adex. Last week, leading media agencies Zenith Media Malaysia and Omnicom Media Group forecast adex growth of 10% for 2010.

“Last year was indeed a challenging one across all sectors in the economy, including media. However, given that numerous economic indicators suggest the effects of the downturn are subsiding and improving business and consumer sentiment, the advertising market is expected to perform better in 2010,” said The Nielsen Company’s Liew.



This article appeared on the Media & Advertising page, The Edge Financial Daily, Feb 2, 2010.