PETALING JAYA: The advertising industry is set to swing to a recovery mode next year with advertising expenditure (adex) picking up, underpinned by the brighter economic prospects and the development of Covid-19 vaccine.
The industry has been under tremendous pressure mainly from the movement control orders that started on March 18 following the pandemic.
This is set to change with the Malaysian economy gaining momentum, partly attributed to the various Budget 2021 measures to spur consumer spending.
The RM322.5bil federal budget, the nation’s largest, was passed despite a call by the Opposition for bloc voting.
Media analysts agree that with the economy poised for a stronger growth next year, it would also spur consumer spending and in turn give a boost to the ad industry.
Prashant Kumar, (pic below) founder and senior partner of Entropia and honorary adviser to the International Advertising Association Malaysia, told StarBiz that the outlook for the industry next year is expected to be better than this year due to the low base effect in 2020.
Apart from this, he said the discovery of the vaccine has improved sentiments.
“We are looking at a protracted and sure path to normalcy.
“New age technology players are going to be an important driver of growth as with increasing maturity, scale and competitiveness, many see a need to focus on owning the share of mind via brand-building.
“Native products from traditional companies are also going to see a boost, as well as products offering health benefits, ” Prashant noted.
He expects a mid-single-digit growth in advertising spends, primarily driven by digital but other media will also benefit from this growth.
Mediabrands Malaysia CEO Bala Pomaleh said the industry is on a positive recovery trajectory next year, compounded by buoyancy from the vaccine development news globally.
“We are projecting a double-digit growth in ad spends, driven by local consumption in the market. For example, Magna Malaysia has forecast a dip of 17.9% in adex spends year-on-year but with an 11.8% growth in 2021.
“This growth, in tandem with GDP projections, lies mainly in the digital space with video and social primarily driving it. Other recovery areas are also expected for radio and overall out-of-home (OOH), specifically in digital OOH.”Magna Malaysia is the centralised Mediabrands resource for intelligence, investment and innovation strategies.
Bala said it isn’t all doom and gloom in the ad land. These past nine months have seen increased digital adoption and transformation across several areas.
“Marketers must clearly identify the high value audiences they wish to court across each of their digital assets.
“This then leads to clearly defining the purpose and role of a brand’s digital assets and chasing audiences that give you better outcomes via addressable media that connects brands with individual consumers across multiple online advertising platforms, social media, OTT (Over the Top) content providers and smart-TV platforms, ” he said.
Revenue in the domestic e-commerce market is projected to reach about US$4.5bil in 2020, an increase of over 37% year-on-year.
As brands look to remain relevant and connect with audiences in this space, Bala said it is ever more important for content, data and analytics to fuse together for a seamless consumer journey.
There is also a greater need to develop Customer Data Platforms (CDP), he noted. This pulls together first-party data across multiple sources to build customer profiles which could then be used by marketing teams to boost advertising performance, he said.
Ad and media veteran Andreas M. Vogiatzakis, (pic below) who is also the executive director of AMVPLUS Advisory, views 2020 as a year of learning and experimenting and is ready to shift gear in order to be better equipped for the new norm next year.
This year has been a vortex of uncertainty, decline in spends and even witnessing many businesses closing operations due to the pandemic, he noted.
“The silver lining in this madness is the awareness it has brought to us all, and how the necessity to adjust, relearn and connect with our target audiences differently. This is the time to learn new ways, try new paths and reposition ourselves and our business practices.
“Leaders should focus not only on the hard aspects and technology that will drive their business to success in the new world but also to the power skills such as emotional intelligence, empathy, effective leadership, self awareness and purpose, all of which are critical elements of building the attitudes that will hold skills and knowledge together to bring success in an unprecedented fast-changing and ever-evolving world, ” he said.
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