20% increase in Q1 adex

PETALING JAYA: Advertisers spent 20% more on media in the first quarter of this year compared with the same period in 2012.

According to market research firm Nielsen Malaysia, total spending on monitored media (excluding Internet) grew to RM2.7bil in the first three months of 2013 from RM2.26bil previously.

However, it noted that the big 69.2% jump in pay-TV advertising expenditure (adex) was due partly to additional channels being monitored.

For the month of March specifically, media adex continued its earlier uptrend. This was mainly attributed to the upcoming general election, which had been driving ad spend, said industry observers.

“With the election confirmed for May 5, this was an expected increase vis-vis the government-related campaigns, which ranked number one in the recent adex,” said Omnicom Media Group Malaysia managing director Andreas Vogiatzakis.

Total adex rose to RM988.47mil in March from RM853.68mil in the same month last year, according to Nielsen.

Adex growth during the month was led by pay-television, which rose 61.4% year-on-year, as well as cinema and free-to-air television, which grew 13.6% and 12.7%, respectively.

Newspapers continued to command the lion's share of total ad spend, accounting for 37.9% of total adex in March.

During the month, the product/service categories with the highest ad spend were local government institutions, mobile line services, women's facial care, fast-food outlets and tonics and vitamins.

“Advertising spending in the local government category has continued in the last two months so far this year, in the RM90mil range,” said Vogiatzakis.

An analyst from a local bank-backed brokerage concurred that adex growth so far this year had been boosted by the impending election.

“With the upcoming election, many government agencies are going into overdrive to promote their campaigns,” he said.

Looking towards April, and with the election getting closer, Vogiatzakis believes that adex will continue its uptrend.

“It's likely that advertisers would be more conservative on their April spending to avoid competition with the clutter from the election campaigns.

“We expect that after the election news slows down, advertisers would continue with their normal spending patterns, perhaps even rolling out campaigns which they had put on hold (until the election was over).”

Vogiatzakis added that he expected to see an increase in ad spending in the second quarter of this year compared with the same period in 2012.

“But it won't be more than in the first quarter of this year, as it would be hard to combat the high spend that the local Government had poured in in the first three months.

“So, all in all, a lot would be determined by the election outcome. And while we foresee a gradual growth, the market would continue to be cautious on spending. The automotive, telecommunications and mobile sectors would see robust increases this year.”

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