Media was one of many sectors that suffered because of the pandemic in 2020, experiencing an estimated 20% year-on-year decline in ad spending to 71.8 billion baht.
Whether the industry recovers in 2021 remains uncertain, depending crucially on how successful efforts are to curb the spread of Covid-19.
Among media players, only those with online channels are likely to merit a positive outlook in terms of ad spending as more people are engaging in online platforms instead of physical, social interactions to avoid the risk of contracting the virus.
"The fresh outbreak in mid-December caused an immediate impact for people on the ground and various marketing events," said Pawat Ruangdejworachai, newly appointed president of the Media Intelligence Group (MI), a media planning and creative agency.
"The outbreak will continue to weigh on the country's media industry and advertising market in 2021."
TWO SCENARIOS
There are two scenarios for the media industry in 2021, Mr Pawat said.
First, Thailand could effectively curb the spread of the virus by January 2021, he said.
This means brands would continue with their budget plans for summer activities and ad spending could grow 5-10% year-on-year in 2021.
The second scenario is the outbreak persists and another lockdown has to be imposed in the second quarter. In this case, ad spending could see a contraction of 5-10% in 2021.
Mr Surin eyes streaming pacts for Channel 3.
February and March are peak months for ad spending in several product categories, such as air conditioners, automobiles, beverages, cooling powder, soap and sunscreen lotion.
"If the new infections are contained, we will certainly see positive signs in online and out-of-home media, while advertising budgets for TV may also be in good shape," Mr Pawat said.
"On the other hand, if the Covid-19 situation persists, all forms of media, but particularly out-of-home media, will be hit hard because most companies will slash their advertising budget in light of slow sales of their products. More people will opt to stay home and work from home."
He said several clients are seeking consultations for ad contingency plans in 2021 because of the current situation.
An estimated 20% fall in ad spending in 2020 was the biggest drop since the Asian financial crisis in 1997.
Only the online channel saw growth in ad spending, with an estimated increase of 0.3% to 19.6 billion baht, Mr Pawat said.
Before the pandemic, it was projected to rise by 13% in 2020.
In 2021, ad spending on the online channel is expected to bounce back to double-digit growth, he said.
"Digital can surpass TV within 2-3 years in terms of ad spending," said Mr Pawat.
The pandemic accelerated people's engagement in e-commerce, with even the Gen X and baby boomer categories joining the trend, purchasing goods and services online.
ENTERTAINMENT EXPRESS
During the lockdown in March 2020, audiences surged for online platforms, such as Netflix, TikTok, Instagram Live and online news.
With the onset of a new wave of infections in December, a similar trend can be expected to persist in 2021, Mr Pawat said.
Ad spending on out-of-home and mass transit media as well as cinema could continue to fall because people are likely to continue to spend more time at home, he said.
Siwat Chawareewong, president of the Digital Advertising Association of Thailand, said many brands already settled on advertising plans for 2021 before the latest outbreak.
Mr Siwat said spending on Facebook ads was the highest at 6 billion baht in 2020, accounting for 31% of the total spend on digital media ads.
This was followed by spending on YouTube ads, which reached 3.7 billion baht, accounting for 19% the total spend.
The outlook for out-of-home media ads is grim if the pandemic persists.
STREAMING PARTNERSHIP
Surin Krittayaphongphun, president for TV business at SET-listed BEC World, the operator of Channel 3, said 2021 is expected to be an unusual year for the adverting industry overall.
If a vaccine is not available in Thailand, out-of-home media will definitely be in trouble, he said.
With more people staying home, they are expected to watch more TV if channel operators produce good content, said Mr Surin.
Moreover, TV offers content that can be viewed across various platforms, he said.
"Streaming services may steal viewers from TV channels, but we can still forge business alliances with these companies to deliver our content via a streaming platform," Mr Surin said.
TV advertising accounts for 80% of Channel 3's revenue, with 20% stemming from selling global content via licensing and through online advertising.
"We are not only a TV station, but also a content producer," he said.
"2021 is a year of caution for traditional media. Media spending via traditional media is expected to decline by 10% in 2021. It will be the most difficult time for newspapers and magazines. Yet out-of-home and cinema media is expected to recover if the pandemic ends."
CONTENT FOCUS
MI's Mr Pawat said TV operators have to adjust their content to attract more viewers, while operators of radio channels need to extend into platforms that fit with their target audiences.
If the pandemic persists, out-of-home media will have to adjust the price of its advertisements in a bid to secure companies' ad spending, he said.
"2021 could be the toughest time for out-of-home media," said Mr Pawat.
Aaron Rigby, managing director of market research firm Nielsen Media Thailand, said although media spending on traditional media, such as TV, newspapers, radio and magazines, was sluggish in 2020, it rebounded slightly at the end of the year.
This uptick shows advertisers are returning and this trend will hopefully continue into 2021, he said.
Mr Rigby said Thai media spending is expected to continue to shift towards online media, a trend his company has observed over recent years.
"When it comes to TV programmes, for example, a programme's success should be judged on the total audience across both broadcast and digital media rather than being assessed separately," he said.
"We have been working closely with the industry in 2020 and are aware of this."
Mr Rigby said owners of media companies need to focus on content.
"As it was before the Covid outbreak and will be long after, content is king and good content will drive consumer behaviour," he said.