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The media industry hopes the economy improves in the months ahead, after consumer confidence fell in April for the first time in six months.
The tumbling confidence was blamed on skyrocketing oil prices and the rising cost of living. The conflict over constitutional amendments, political uncertainty and street protests have contributed to an unstable political situation.
The demonstrators were still on the streets as the Mid-year Economic Review went to press, demanding that Prime Minister Samak Sundaravej resign.
The media and entertainment industry acknowledged that business performance was slow in the first quarter because some entertainment content went off the air, while many entertainment events were postponed to mourn the late Princess Galyani Vadhana.
Still, they hoped the elected government formed in February would move the country forward after struggling for 16 months under the coup administration.
From January to April this year, total ad spending fell by 1.4% year-on-year to 28. 3 billion baht, according to Nielsen Media Research Thailand.
Witawat Jayapani, the president of the Advertising Association of Thailand, said a 5% increase in ad expenditures was the best projection it could hope for. It was not high fuel prices, but an uncertain political climate that hurt the industry.
''Last year was a gloomy year, but people hoped that it would be over when we got a new government,'' said Mr Witawat. He thinks 2008 will be an unusual year as people become accustomed to the government.
''Well, people looked forward to the new elected government. Once it was formed, they did not want it.''
The uncertainties have psychological effects on consumers, making them reluctant to spend, said Parames Rachjaibun, chairman of the consulting firm Turnaround.
Their spending was rational rather than emotional, added Mr Parames. People want to get value for money. Therefore they need information to make decisions.
''Communication is the trend right now for advertising. Agencies not only produce the ads, but also help advertisers to do communication, providing more information,'' he said.
Phot Jaichansukkit, president of Public Relations Society of Thailand, agreed, pointing out that advertising has been growing slowly, but this was in contrast to public relations and communications. He said that in the first four months of the year, public relations billings were approximately 50 billion baht, more than half the total of 90 billion baht for all of last year.
Corporate communication in particular has been increasingly used since a single company can own various products, said Mr Phot. Corporate communication is a valuable tool to strengthen the brand as a whole. They have also organised smaller but more frequent marketing events for customers.
Mr Phot predicted marketing events would likely gain momentum for the rest of the year.
That was partly true, said Mr Witawat, however, many event organisers were forced to accept lower service fees because of tough competition among numerous players.
''Events are increasing, but they (event organisers) are not earning more money. I think this is the right time for event organising agencies to form an association to standardise prices and pitching fees in the industry,'' he said.
A decline in ad spending for the industry was a result of a big change last year when the commercial station iTV went off the air. Later it was transformed to commercial-free Thai PBS (Thailand Public Broadcasting Service) in February. Ad spending on TV shrank by 4.8% year-on-year in the first four months of the year.
But this was a windfall for existing free-to-air TV operators, channels 3, 5, 7 and 9 (Modern Nine TV), because their commercial revenues went up when a competitor vanished.
BEC World's Channel 3 reported increased ad revenues of 18% in the first quarter. MCOT's Modern Nine posted an increase of 14.5% in ad revenues.
However, the third quarter is regarded as the low season for the advertising industry.
MCOT president Wasan Paileeklee said that to cope with hard times, the broadcaster was already offering below-the-line marketing options to complement clients' conventional advertising. It would arrange on-ground activities to help clients create brand awareness.
Marketing activities invariably increase costs. But Mr Wasan argued that if the activities were sound, they would drive airtime utilisation and advertising, making the investment worthwhile.
''Politics is beyond our control, so MCOT should not worry. We should do the best that we can do,'' he said.
Grammy Group, the country's largest entertainment firm, is also worried that uncertainty among people will get stronger during the fourth-quarter high season. They hope products and events to celebrate its silver anniversary will push revenues to its target of eight billion baht or more.
An analyst said that falling consumer confidence would be the only negative factor for the media and entertainment industry in the second half of the year.
''Some might see opportunity in the crisis. Probably, it will be the other way round. Advertisers may spend more on advertising amid intense competition to encourage consumers to spend,'' the analyst said.
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