Media ad spending set to drop 15%

Media ad spending set to drop 15%

Ad spending via digital or internet channels is projected to increase this year as the pandemic speeds up digital adoption.
Ad spending via digital or internet channels is projected to increase this year as the pandemic speeds up digital adoption.

Spending on media advertising is projected to drop 15% to 77 billion baht this year as the coronavirus pandemic causes brands to tighten their budgets amid a weak economy, according to researcher Media Intelligence (MI).

The crisis is also likely to speed up digital adoption by consumers to 1.5-3 years from now, with an emphasis on digital media, food ordering and online shopping.

“Covid-19 has increased media consumption via TV and online, but overall media ad spending will contract this year because of lack of consumer spending,” said MI business director Pawat Ruangdejworachai.

In 2020’s first quarter, ad spending across media dropped 6% to 19.8 billion baht year-on-year, while full-year spending could fall 15-20% if the government decides to lift the lockdown in May, Mr Pawat said.

If there were a second wave of the pandemic, total spending could contract by 30%, he said.

In the first quarter, ad spending on digital TV fell 7% to 3.5 billion baht year-on-year and spending over all  TV broadcasting categories - including free to air and cable/satellite TV - plunged 10% to 9.7 billion baht.

Ad spending on out-of-home media and cinema, dampened by the lockdown, fell 9% to 2.6 billion baht and 15% to 427 million, respectively.

Ad spending on magazines plunged 22% to 170 million baht while newspapers, the hardest hit, plunged 35% to 663 million.

However, ad spending on the internet or digital channels grew by 12% to around 5.5 billion baht.

Mr Pawat said before the Covid-19 outbreak took hold, ad spending on TV was projected to account for less than half of the entire media ad spending in 2020.

But as the pandemic erupted, ad spending on media such as out-of-home and cinema plunged, making it likely that TV would make up 51% of the total spending this year.

Ad spending via the digital or internet channel is projected to make up almost 30% of the entire media this year, he said.

A suitable number of digital TV players in the market would be six, to be able to compete with over-the-top players, said Mr Pawat.

People were likely to flee to other media platforms as the 15 digital TV channels face a financial crunch from the lack of ad spending and were turning to TV shopping and drama reruns, he said.

TikTok, Twitter and Line were gaining momentum during the pandemic, Mr Pawat said.

TikTok, a short-form mobile video app, has seen time spent rising by 50% during the outbreak.

“Brands need to customise content for each channel as if they are speaking in their own language,”  Mr Pawat said.

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