Global gloom comes to town: Media spend to drop 15%
Published: Jan 30, 2009
- Media spend to decline
- Govt, Pharma and luxury sector unaffected
- Alternative audio visual media benefits
Cable TV, however, is expected to hold as it inherits the terrestrial TV budgets due to better value, the study states. Additionally, advertisers are also shifting focus to alternative forms of audio visual media such as IPTV, the internet and outdoor screens.
Also bucking the trend are industry sectors like entertainment, luxury, pharmaceutical and government-services which are not showing signs of budget cuts.
"There shouldn't be any major budget decline for the entertainment sector like movie distributors and cable TV, as consumers are expected to spend more time at home or go to the cinemas, due to work-related stress. The luxury sector is also quite a resilient sector, as the full impact of the crisis is still being assessed within the high net-worth individuals segment," Jimmy Lim, executive director of MindShare Singapore, said.
The advertising budget cuts in 2009 as compared to last year ranges from 30% to 45% in the banking sector, and 30% to 50% in the automotive sector.
The study also points out to aggressive spending by the Singapore government, for instance the Ministry of Manpower which is investing in re-training due to lay-offs through the Workforce Development Agency and the Skills Programme for Upgrading and Resilience schemes, and the Ministry of Trade's various incentives for SMEs to tide over the recession.
Mindshare Related Stories:
- HPB launches health campaign
- PRUmy Child campaign to rollout in April
- Maxis friend search expands to Facebook
- Carter takes top GroupM planning role
- New leadership at Mindshare
- Moving Walls hits KFC
- Meaden takes on expanded GroupM role
- HKJC taps younger segment via iPhone app
- Unilever retains MindShare
- Mindshare Keeps Unilever in US
- Mindshare China adds senior Guangzhou role
- Anglia pours on CNY brand building
- LG eyes dominant LED picture
- Taiwan's top model sits for Osim campaign
- MEC China beefs up senior team
- Guinness unveils marketing push
- Ford Mondeo arrives with marketing push
- Sime Darby RM45 mil media to Mindshare
- Growing pains at Hulu
- Carat snags Disney's $25m media business
This is a scary figure if its correct. And considering MediaCorp's recent cost-cutting measures and SPH's drop in print ad revenue in the first quarter, it must be fairly spot on.
In optimistic cycles, the flow of marketing funds tend to move upstream to branding efforts. In pessimistic cycles, the converse happens - marketing budgets flow downstream to more urgent and immediate sales generation priorities eg. product price-cuts, free incentives that building accumulated dept, etc. The CMO starts to lose control to the quarterly record book mandates of the CFO and shareholder value. Given the unprecented 50-70% book lose of major companies, I agree with wonderdoggy that actual ATL spend decline would be as high as 25%. We are now in a era of fiscal correct due to general overproduction and too many choices. Agencies need to switch their strategic paradigms to CFO-centric objectives now. Agency commission structures of 15% (less kickback) off media sales are no longer viable as we turn this century. Produce results and be compensated handsomely by it, or don't produce results and you deserve nada. That's the challenge we all face, and perhaps, just perhaps, we can be truely seen as marketing facilitators and not just glib-tongue social artists living in a bygone era of 'the client approved it, that's THEIR problem'