The country's digital advertising spending is projected to see flat growth this year because of the coronavirus pandemic, for the first time in eight years, says a report jointly commissioned by the Digital Advertising Association of Thailand (DAAT) and marketing consultancy Kantar Insights Thailand.
"Growth is projected at 0.3% this year to 19.6 billion baht," said Arpapat Boonrod, chief executive of Kantar.
The sector has posted double-digit growth every year since 2012, she said. Before the pandemic, this year's growth was predicted at 13%.
In the first half of this year, digital ad spending amounted to 10.1 billion baht. It's expected to fall to 9.4 billion baht in the second half.
Despite the impact of the pandemic, Ms Arpapat said the digital channel is becoming part of mainstream media in addition to TV, and media spending on the digital channel is expected to surpass that of TV in less than two years, driven by digital transformation and more time spent online.
In the first half, motor vehicle businesses were the biggest digital ad spenders (2.58 billion baht), followed by skincare products (1.88 billion baht), non-alcoholic drinks (1.64 billion baht), communications (1.64 billion baht) and dairy products (1.42 billion baht).
Ms Arpapat said Covid-19 has changed people's behaviour, especially on content viewership and e-commerce engagement, as consumers spend more time online and are exposed to broader platforms.
Even so, Facebook and YouTube are still the major channels where brands connect with their targets.
Since the end of 2019, TikTok has gained popularity as an exciting new communication channel, and its growth accelerated during the pandemic.
Nonetheless, TikTok is used by brands for marketing campaigns rather than ad spending, Ms Arpapat said.
Ad spending on Facebook is expected to reach 6 billion baht this year, accounting for 31% of total digital spending, followed by YouTube with 3.7 billion baht, accounting for 19%.
Spending on Line is predicted to reach 1.1 billion baht, which would make up 6% of total spending.
In the second half, digital media is expected to fuel sales, the trend of which could carry on over the next couple of years, Ms Arpapat said.
DAAT president Siwat Chawareewong said that while overall digital spending has decreased, marketers have shifted their budgets from traditional to online, mainly to e-commerce.
Tourism, services, motor vehicles, real estate, skincare and cosmetics have to adjust their strategies and utilise advertising spend better, he said.
Pacharee Permvongusawa, head of digital business at Publicis Media, said digital ad spending is expected to bounce back to double-digit growth again if unpromising situations dissipate while the 5G network roll-out gains steam.
Marketers also need to gear up for digital transformation themselves, she said.
Rajsak Asawasupachai, business director of media marketing firm IPG Mediabrands, said local digital platforms must be established so that ad spending will remain mostly in-country.