Advertisers return in force

ADVERTISERS have become active again since April, and those who haven’t are expected to start spending soon.

Nestle Malaysia communications director Khoo Kar Khoon says that for any company that saw that their sales were not fantastic or short of target in the first quarter of the year or up to now, it only had six more months or so to catch up.

“If they don’t do anything now, they’re doomed to fail to meet their targets. If you don’t want to continue selling on discounts and you don’t have a very strong brand, how are you going to survive if you don’t advertise in this competitive environment?” he tells StarBizWeek.

“You need to advertise to have brand presence on top of mind. You have to continue to create excitement for the brand.”

According to market research firm Nielsen Malaysia, Nestle was the second biggest advertiser in the country for year-to-date April.

Total advertising expenditure (adex) in Malaysia jumped 13.5% to RM4.21bil in the first four months of 2014.

Pay TV figures are believed to be distorted as more channels were being monitored from the first half of last year. Excluding pay TV (whose adex grew a whopping 30%), total adex growth was 7.5%.

Advertisers boosted spending in newspapers by 8.1%, with English-language newspapers grabbing the lion’s share (40%) of the RM1.5bil adex. Within the newspaper category, English dailies saw a strong growth of 28.3% in April.

Last year there was high government spending leading up to the general election. If the spending of the Prime Minister Department were excluded, adex growth for January-April this year would have been a whopping 20.6% (with pay TV) and 13.5% (without pay TV).

Khoo, who helmed the Malaysian Advertisers Association for four years until last month, expects to see “quite high spending” by advertisers in May and June.

“A lot of companies that haven’t spent much in the last three months, will have to rush from now till Ramadan (July). During these two months, if there’s no high volume of ad spending, they should be worried.

“Similarly, a media owner will have to fight to get a big chunk (of the advertising pie) during this period,” he says, adding that everyone − marketers, agencies and media owners − would have to “work very hard” in these two months to outflank competitors.

An additional booster during this period is the FIFA World Cup, with both official sponsors and non-sponsors trying to capitalise on the football craze.

“Not all will go on TV. Perhaps 30 to 40 advertisers will go in-store or digital in relation to the World Cup fever,” Khoo says. Among the brands that have launched football-related promotions are McDonald’s, KFC, Maybank, CIMB Bank, and Petron.

Advertising spending will also get a boost from some companies with a financial year ending in June. “They may want to spend the rest of their ad budget before year-end,” he notes.

Nestle launched quite a few campaigns last month, including Nescafe Classic Fresh Pick, Maggi Big Ayam and the Milo Malaysia Breakfast Day.

Khoo: ‘You have to continue to create excitement for the brand.’

“We had to delay certain projects earlier this year partly because we have a lot of projects and they have to be spaced out. It was also partly due to the MH370 news, so we had to be careful and sensitive. But the delay wasn;t long,” Khoo says.

AirAsia has also been aggressive in advertising recently. On how important it is for the carrier to advertise at this time, AirAsia group head (ancillary income) Kenny Wong says: “More than ever now, given the recent issues facing the aviation industry as well as the political situation in neighbouring countries which could affect travel, we need to be aggressive and resourceful in reminding people of our low fares, widest network and excellent connectivity.

“More so, there is now an even smarter way to travel − out of the brand new KLIA2 which is easily accessible through the ERL (Express Rail Link) coupled with aerobridges which offer better comfort and ease.”

Asked whether May-June is a crucial time for marketers to go all out, with Ramadan approaching, he replies: “Absolutely, especially in view of the World Cup distraction as well.”

Ad spend by property developers has also been strong and is expected to continue remaining steady going forward, says Adrenaline Communications Sdn Bhd executive director Steven Choo.

“We have a number of property clients and ad spend by them has been very strong. Tropicana Corp Bhd had an ad campaign in April that spilled into May which was quite successful.

“Eco World Development Group Bhd also has a massive ad campaign this month. So to say that people are holding back spending is not true.”

Choo adds that even if interest rates are adjusted in July, he still believes that companies will continue to spend.

“Those with money will still continue to spend, but perhaps more selectively,” he says.

Meanwhile, UMW Toyota Motor Sdn Bhd senior manager for brand building Mandy Phang says the company has been steady with its ad spend all year so far, adding that spend was, however, higher versus the same period last year.

“We had fewer model launches last year and the market was also a bit more cautious due to the elections.

“We haven’t ramped up ads of late. Just some sustenance activities,” she says.