Newspapers and radio still on growth path in Malaysia

Updated: Saturday August 24, 2013 MYT 9:09:10 AM

Newspapers and radio still on growth path

BY M. HAFIDZ MAHPAR AND EUGENE MAHALINGAM
STARBIZ@THESTAR.COM.MY

TRADITIONAL media, namely newspapers and radio, are still the advertisers’ preferred choice. They are the only media monitored by Nielsen − other than pay TV − to register advertising expenditure (adex) growth last month. According to Nielsen, newspaper and radio adex in July grew 4.1% and 12.4% respectively compared with a year earlier, while ad spend for pay TV surged 74.2%. The increase in share of voice for pay TV in 2013 was partly due to additional channels being monitored, according to Nielsen.The Association of Accredited Advertising Agents Malaysia (4As) president DatukJohnny Mun says newspapers and radio are still considered to be among the most effective forms of media.

“Traditional media have always been the driving force for marketers and advertisers when it comes to reaching their target audience. Digital is growing and is still in its infancy stage.

“But the reach of traditional media, such as newspapers and radio, is still considered the stronghold. It’s still strong compared with what most people think.”

An industry observer concurs that traditional media are still a preferred choice for most advertisers.

“It’s still considered a safe bet. Yes, digital advertising is growing but many are still testing the waters when it comes to this medium.”

Total adex in July, excluding Internet ad spend, rose 16.7% to RM1.2bil from RM1.03bil a year earlier. For the first seven months of the year, total adex grew 19% to RM7.25bil from RM6.10bil a year earlier.

Excluding pay TV, adex grew only 1.9% for the January-July period.

The product/service categories with the highest ad spend in the first seven months of 2013 were local Government institutions, women’s facial care, fast-food outlets, mobile line services and haircare products.

Nielsen measures advertising spending based on published rate cards, except for outdoor ad spend which is based on actual spending.

Starcom Malaysia managing director Nick Drew says he expects total adex to record single-digit growth, ranging between 5% and 6%, this year.

For comparison, the global advertising market is expected to grow 3.5% this year, a repeat of last year’s growth (based on the forecast by ZenithOptimedia).

“The word which I am sure everyone is using, is cautious. Despite the gross domestic product growth in Malaysia, the marketplace remains relatively cautious,” he says.

This week Bank Negara revealed that the economy grew by 4.3% last quarter, but it revised downward its growth forecast for the year to between 4.5% and 5%.

On the perception that multinational companies were waiting until after the general election (GE) to spend on advertising, Drew says that Starcom’s multinational clients had actually continued to spend around the GE period.

“If you take out the Government spending, it is still the traditional product categories like toiletries that drive adex growth. The top advertisers are still Unilever, Nestle and Samsung,” he says.

According to Nielsen’s data, Unilever was the country’s biggest advertiser in the January-July period. It boosted spending by more than 60% year on year. Rounding up the top five advertisers list are the Prime Minister’s Department, Nestle, Procter & Gamble and Samsung.

Drew says Malaysia is seeing about 20% growth in digital billings, noting that even globally, digital is still the fastest growing advertising medium