Adex migration hits traditional media hard amid digital boom, says Kenanga

Malaysia’s media industry is at a crossroads, as advertising dollars increasingly flow toward digital-first platforms that offer precision, interactivity, and measurable ROI. Traditional media including television, print, and radio, face growing pressure to adapt to a landscape dominated by social media, KOLs, messaging apps, streaming services, and e-commerce live-stream commerce.

Based on a report by Kenanga Investment Bank, the shift toward digital advertising is reshaping the sector. Social media, streaming platforms, search engines, and retail media networks now offer advertisers AI-driven programmatic advertising, enabling real-time bidding, precise audience segmentation, and dynamic ad placement.

The ability to analyse vast troves of user data allows campaigns to be personalised to individual browsing habits and content consumption patterns, capabilities that legacy media cannot match due to coarser audience metrics, limited interactivity, and slower feedback loops.

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Kenanga also found that Malaysian legacy media companies remain largely underrepresented in the digital advertising market, which now accounts for roughly 70% of total industry adex. Where they do participate, exposure is often limited to basic formats such as banner ads and embedded video spots on their own platforms.

Media Prima stands out with a relatively strong digital footprint, attracting 8 million unique monthly visitors to its digital platforms, 139 million social media followers, and a digital radio audience of 208 million. Yet, digital revenue contributes only 13% of its year-to-date revenue, highlighting the untapped monetisation potential.

Traditional media players are exploring ways to bridge this gap. For instance, Astro Malaysia recently launched KULT, a digital marketing venture that enables brands to run data-driven campaigns across Astro's content ecosystem and external platforms including YouTube, TikTok, and Meta. By leveraging first-party audience data and working with influencers and creators, KULT offers measurable campaign outcomes, reflecting a broader industry push to remain relevant in a digital-first world.

Adex to slide on broad weakness

Despite these initiatives, Kenanga projects continued softness for FY25 adex, forecasting RM4.72 billion, down 14% year-on-year— a steeper decline than CY24’s 10% drop. Weakness is expected across free-to-air TV (-14%), digital media (-30%), newspapers (-5%), magazines (-8%), and cinema (-3%).

One potential bright spot lies in local intellectual property (IP) monetisation. Malaysian players such as MEDIA and ASTRO have increasingly invested in homegrown content through studios such as Primeworks and Astro Shaw. Locally produced hits including the Polis Evo franchise and Ejen Ali illustrate the sector’s edge: cultural relevance, social nuance, and vernacular storytelling give these studios an advantage over global competitors.

In 2024, Astro Shaw captured a leading 71% share of the Malaysian box office, generating RM121 million in gross revenue. Kenanga notes that while IP can diversify revenue streams across cinemas, streaming platforms, licensing, and brand collaborations, scaling these portfolios into consistent revenue remains a work in progress.

Overall, Kenanga maintains an underweight stance on the media sector, citing structural disadvantages, digital disruption, and legacy cost burdens. Incremental efficiency measures, such as AI-led optimisation and selective asset impairments, are insufficient to ensure long-term profitability. Transformative strategies, including regional expansion, mergers and acquisitions, divestment of non-core businesses, or scalable IP ownership, are required to prevent further marginalisation as advertisers increasingly migrate toward digital ecosystems.

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