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There’s a sense of gloom in the economy as we see thousands of employees around the world lose their jobs. Putting advertisers on alert, many companies are undeniably tightening their purse strings – a trend experts warn against, but expected to continue. The impact of this is likely to be felt by adland, and further trickled down to publishers who often bear the brunt in an economic slowdown.
In fact, some publishers are already feeling the impact. The New York Times, for example, missed analysts’ estimates for quarterly revenue earlier this month due to advertisers cutting back on spend against the backdrop of a looming recession, and decades-high inflation. According to a report on Reuters, The Times said it expects digital advertising revenue to fall in the fourth quarter and its digital advertising revenue grew only about 5% per cent in the third quarter.
In a conversation with MARKETING-INTERACTIVE, Rafiq Razali, group managing director, Media Prima shared that in general the company is mindful of the challenges ahead given the global economic uncertainties may result in fluctuations. However 2022 was generally a good year for the company where Media Prima posted a 9% increase in advertising revenue in the first half of 2022 (1HFY22) against the comparative period. The group’s advertising revenue is led by higher contributions from Media Prima’s broadcasting segment — represented by Media Prima Television Networks and Media Prima Audio — which posted a 15% revenue increase in the first half of FY22 against the comparative period. OOH also made a comeback for the group with Big Tree, its OOH business, posting a 13% revenue growth in the first half of FY22.
Moving forward, Rafiq said the company aims to work closely with clients to offer solutions that meet their business needs in the operating climate. “We will also focus on our non-advertising based revenue, such as content sales and home shopping, which contributed to group total revenue,” said Rafiq. In 1HFY22, content sales revenue rose 39% in the current period due to the increase in demand for local content from existing and new streaming service providers.
“Internally, we will continue to implement cost optimisation to protect our bottom line and ride out against the headwinds given the global economic uncertainties,” he added.
Meanwhile, Hong Kong headquartered publication SCMP added that it remains optimistic despite the macro factors that are expected to pose challenges for significant growth across markets. Darryl Choo, business director, International, SCMP Advertising said:
During times of volatility, the power of content is amplified. We work with our partners to make sure they are prioritising human storytelling, communicating with purpose, even while navigating the new normal.
Moreover, with accelerated digital transformation, Choo said the group sees “continuous emergence of disruptive companies with transformative solutions” all looking for a trusted partner for external communications. As a key news brand among C-Suites in Hong Kong, and as a leading source of globally relevant Asia stories, “SCMP is best-positioned to help brands take their brand story forward in 2023,” Choo added.
To get through the difficult period, partnerships continue to be the key to success, said Parminder Singh, chief commercial and digital Officer, Mediacorp. Specifically, Mediacorp expects performance-based advertising to remain strong. As such the company is looking to expand its offering of outcome-based performance models that will allow clients to “de-risk” their investment by linking it to business outcomes.
“Advertisers will pay for advertising media usage commensurate with the achievement of shared goals,” Singh explained. Singh added that through this model, Mediacorp has been able to leverage its full arsenal of dynamic media assets to drive success for partners.
What to embrace for the future
While it is often easy to paint a picture of gloom and doom, Anita Munro, chief investment officer of GroupM APAC said Asia looks optimistic. Looking at marketing spends, the highest growth markets are in Southeast Asia such as Vietnam, Indonesia, Malaysia, Thailand as well as in South Asia led by India.
She added, “We anticipate Hong Kong to be more buoyant going into next year as the market has gradually opened up after a long period of lockdown, there’s a renewed sense of optimism. Meanwhile with China announcing some initial easing of COVID-19 restrictions, it’s sending positive signals to the markets which may help to renew a sense of optimism and support growth across the region.
She added generally, the story this year has been of resilient growth in most APAC markets, and GroupM is projecting positive views next year across SEA and India. According to GroupM’s This Year Next Year 2022 Mid-Year Advertising Forecast, advertising in APAC is expected to grow by 8% in 2023.
Projected growth for the following channels:
- TV (5%)
- Audio (1%)
- Newspapers (1%)
- Outdoor + Cinema (11%)
- Digital (10%)
Meanwhile, as the industry moves toward cookie deprecation, Martin Davie, managing director, head of international business - Publicis Media Singapore said publishers and broadcasters will double down on digital business transformation and weaponise their first-party data to commercialise better audience targeting.
Davie predicts that many brands will continue to focus on tried and tested channels which drive immediate business results (search, social, programmatic), but finding the balance between upper-funnel and lower-funnel tactics will be key. “We fully anticipate a continuation, and perhaps even speeding up of the trends we’ve seen over the last number of years, and ad dollars will continue to flow into digital channels,” said Davie.
In his view, advertisers are expected continue to max out on lower-funnel channels such as search, but the interesting space to watch will be where upper-funnel dollars are attributed. “Programmatic investments are likely to continue to grow, as will social platforms such as TikTok and Twitch, and last but not last precision marketing will remain important, along with new capabilities across channels such as DOOH that start taking larger bites out of advertising budgets,” he shared.
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