MEDIA

Advertising thriving

Bamrung Amnatcharoenrit

The government has imposed certain curbs on advertisements to show its social and health responsibilities but the industry has kept growing at an impressive rate.

ONE OF the biggest beneficiaries of the Thaksin government's policy to spur growth through domestic consumption has been the advertising industry, which has shown robust growth for almost four years.

In 2001, the industry expanded by a mere 3.8% to about 52.99 billion baht in billings from the previous year. Growth quadrupled to 15.38% to total 61.21 billion baht in 2002 and expanded by another 16.75% to 71.46 billion baht in 2003, according to Nielsen Media Research.

"It has been a clear picture since Mr Thaksin took office. More political stability was seen. With a stable government, confidence gained ground and the economy started to rebound. The advertising industry has benefited in a big way from such an environment," said Chaipranin Visudhipol, managing director of TBWA/Thailand Co, a major advertising agency.

The Thaksin government, he said, was quick to rebuild confidence among foreign investors. As well, tax incentives were launched to boost the economy. Tax cuts were offered to homebuyers in 2003, spurring a fast recovery in the property sector, which in turn enabled developers to spend more on ads.

Key media spenders over the past three years included operators in the telecommunications, automobile, liquor, consumer products and property sectors.

But the Thaksin government, despite its successful efforts in promoting domestic consumption and thus ad spending, imposed certain curbs on advertisements to show its social and health responsibilities.

For example, a ban was imposed on liquor ads appearing on television and radio between 5 am and 10 pm under the government's drive to promote responsible drinking and curb road accidents. The ban, which took effect on Oct 1, 2003, also extended to commercials for companies that produce energy and alcoholic drinks, as well as their company logos. In addition, under no circumstance could such ads show people consuming distilled alcohol. Makers of energy drinks were also barred from claiming the benefits of their products.

Producers of snacks and other food products targeting children are also barred from using prize draws, freebies and discounts in campaigns.

But all of these barriers did little to dent the industry's growth, which continued to thrive on the back of fast overall economic recovery.

In the first quarter of this year, advertising spending grew by 24.61% year-on-year to about 19.96 billion baht, even as the industry was under threat from the bird flu and violence in the Middle East. For the whole year, the industry is expected to grow by at least 10%, down from the previous projection of 15%.

Like other sectors, the advertising industry will likely be adversely affected by the consequences of high oil prices for the remainder of 2004. But spending on the coming general elections early next year _ or possibly late this year _ could help offset any slowdown that may result.

Many ad executives still have strong faith in the government's economic policies which are expected to keep growth on track this year and next, despite external factors.