Advertisers cut budgets amid turmoil

The advertising industry is feeling the pinch of political protests as advertisers start cutting or delaying their spending for 2014.

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Wannee Ruttanaphon, president of the Media Agency Association of Thailand (MAAT), said some companies and banks have slashed their budgets due to political tensions and a lack of positive signs of economic recovery.

They are not confident about prospects for the Thai economy, in line with the consumer confidence index.

A report from the University of the Thai Chamber of Commerce shows the index has fallen dramatically since last August on the back of the economic slowdown and political problems.

Only consumer goods companies are regularly spending money on ads as usual due to their higher sales.

Surprisingly, Channel 7 has prime-time advertising slots available for the first time in many years. The slots are normally fully booked many months in advance.

"When there is a crisis, radio, outdoor media and newspapers used for tactical campaigns will see their spending cut first," Ms Wannee said.

The MAAT predicts the ad industry will grow by 4-6% this year to 146 billion baht despite the political tensions.

The industry grew by 3% to 139 billion baht last year.

Spending on main media still increased in 2013, with TV rising by 2% to 69 billion baht, cable and satellite TV 23% to 11.8 billion, newspapers 4% to 20 billion, outdoor media 19% to 3.5 billion and online media 34% to 3.7 billion.

Media sectors with a spending decline last year were magazines (down by 4% to 5.7 billion baht), cinemas (5% to 7.5 billion) and in-store media (4% to 2.6 billion). Radio was unchanged at 6.6 billion baht.

The automotive sector was the biggest ad spender last year, followed by skin care, telecoms, entertainment and public services.

MAAT director Rathakorn Surbsuk said ad spending grew organically by 3% last year, but business was considered steady in view of 8.3% media inflation.

"This year will be another tough one for media owners since the overall economy is seeing no positive signs of recovery in the short term," he said.

Digital-TV transmission will be fully operational in the third quarter, but ad spending on this new medium will take time to grow.

"Digital TV may contribute only a small proportion of media spending this year, as those turning to advertise on the new channels may be small firms," Mr Rathakorn said.

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