Advertising spending in Thailand will drop 10-15% this year as companies shift their ad budgets to cheaper and more specific online media, according to Media Intelligence Co (MI).
MI media director Pawat Ruangdejworachai said brands and advertisers are more cautious with their expenditures, even when spending on budget-friendly internet space.
Mr Pawat said that in today's slow economy, companies will usually cut their ad budget before anything else. Moreover, brands are emphasising point-of-sale marketing strategies, instead of creating brand engagement through advertising.
Brands and advertisers are still worried about the economy, he said. Thailand's economy is still feeling the aftershocks of the 2014 coup that brought the military government to power. A general election has been tentatively slated for late next year.
"Ad expenditures won't improve by the end of the year, as the third and fourth quarters are usually slow for the ad industry," Mr Pawat said.
Meanwhile, the digital TV industry is at a four-year low and many digital operators are struggling to fill their air-time slots at 50% capacity, even during prime time, he said.
He listed the main factors behind the industry crisis as follows: first, ad expenditure has shifted to cheaper online options; second, the economy remains sluggish; and third, digital and out-of-home media platforms are stealing eyeballs, especially in Bangkok's transit segment.
Automotive, fast-moving consumer goods (FMCG) and non-alcoholic beverages -- sectors that spend lavishly on TV media -- have also shifted their ad budgets to target popular over-the-top platforms like Facebook, YouTube and Line.
"This change of strategy allows them to reach their exact target group without wasting money," Mr Pawat said.
He said digital TV operators should adapt by broadcasting content of outstanding value that attracts viewers and by extension advertisers.
BBTV's Channel 7 ranked first among digital TV operators in terms of viewership in May, followed by BEC World's Channel3 HD, WorkPointTV, Mono29, RS's Channel8 and GMM Grammy's ONE HD, according to a report by Nielsen Thailand, the local operating unit of the global information and measurement firm.
Mr Pawat said ad expenditures across all media platforms stood at about 100 billion baht last year, with spending on internet and online media taking up 10 billion baht.
MI reported that ad spending on all media outlets listed by Nielsen Thailand fell 9.2% to 39.7 billion baht in the first five months of 2017. In contrast, internet and online media spending is projected to grow more than 30% to 12 billion by the end of the year.
Nielsen Thailand reported the biggest drop in ad spending was experienced by the magazine sector, where it fell 37.2% to 807 million baht over the five-month period. This was followed by radio, which saw a 20.4% slide to 1.76 billion baht, and newspapers, where the comparative drop of 20.1% took spending to 3.26 billion baht.
The biggest winners were in-store media, where ad spending shot up 45.8% to 398 million baht, followed by transit, where it climbed 36.1% to 2.69 billion baht, and cinema media, where it increased 25.4% to 2.68 billion baht.
