Malaysian Ad Spending Exceeded Expectations in 2006

Heavy advertising in the second half led to a strong year

16 February 2007
Kuala Lumpur

Gross advertising expenditure in 2006 exceeded expectations, recording four percent growth and closing the year at RM4.7 billion, according to latest figures released by The Nielsen Company.

While the FIFA World Cup 2006 kept the Malaysian advertising market afloat in the first half of 2006, the second half saw increases in adspend from categories such as mobile network services, local government institutions, furniture retail and credit cards, turning the whole year into one of good advertising growth.

The advertising market in Malaysia continues to be dominated by traditional media like Newspaper (58%), Terrestrial Television (31%), Radio (4%), Magazines (3%) and Outdoor (2%) etc. (see Table 1).

Outdoor and Point-of-Sale in particular recorded significant growth of 37 percent and 25 percent respectively. Terrestrial Television and Radio also secured a 13-percent increase each over the last year. While increases in adspend in the banking/finance, appliances and mobile network services categories contributed to the overall increase in Outdoor advertising, spices/herbs, health food drinks and shampoo/conditioner categories were the catalysts to Point-of-Sale’s growth for the year.

TV3 and TV9 were the main contributors to the overall increase in the Terrestrial Television market, showing a respective increase of RM106 million and RM69 million in ad revenue. Categories contributing to this growth were mobile network and mobile interactive services, laundry detergents and local government institutions.

The strong performance secured by Radio was the result of increased advertising from mobile network services, local government institutions, cleaning agents/laundry, as well as phone cards and automotive categories. Apart from this, adspend garnered by two of the industry’s newest radio channels have also contributed to radio’s overall growth.

Positive growth, exceeding that of the total advertising market, was seen for Cinema (10%). Apart from the tremendous growth seen from mainstay categories such as beer, credit cards and local government institutions, cinema has managed to diversify advertiser support by attracting more advertising dollars from industries like automotive corporate ads, sportswear, passenger vehicles (1001-2000 cc), watches and restaurants.

Mobile network services remain the top adspend category, registering 19 percent growth in 2006, due to aggressive advertising by leading telcos Maxis and Celcom. Maintaining second position overall, Local Government Institutions is also the top growth category for the year, reaching RM161 million and relegating mobile interactive services to the third position in 2006. The ongoing Kementerian Pengangkutan road safety campaign on terrestrial television, and national service campaigns on newspapers placed by Kementerian Pertahanan were main contributors to an overall increase for mobile network category (see Table 2 & 3).

Making an entrance in ninth position in 2006 was the Furniture Retail category, with Courts Mammoth Superstore the main contributor to overall category growth, nudging Fast Food out of the top 10 list (see Table 2).

Ranked third in 2006, mobile interactive services experienced the largest decline in category adspend from RM202 million in 2005, to RM159 million. The 21 percent drop was due to reduced spending overall as well as cut backs from mobile tele-service brands like Shabox, 36933, 32166, MobileKlub, Club Zed, Trendy, Klub Cat Mobile and Ezra Tones (see Table 2).

Telcos continue to feature among the top advertised brands, with Maxis registering an increase of 60 percent to reach an all-time high of RM157 million and taking over from Celcom for most advertised brand. Digi registered a 32-percent increase due to aggressive above-the-line campaigns on pre-paid services, ending the year level with Celcom in joint second place (see Table 4)

Malaysia Airlines, Pantene and Olay were squeezed out of the top 10 in 2006 by Toyota, Kementerian Pengangkutan and Courts Mammoth Superstore. Toyota’s entry into the top 10 is the result of the brand’s increased spending during the World Cup FIFA 2006, specifically for Toyota Avanza, Toyota Moving Forward and the New Vios 1.5 campaigns on print media (see Table 4).

Among the top advertisers (see Table 5), Maxis holds pole position with Unilever Malaysia follows closely behind. Unilever Malaysia recorded an increase in adspend of 47 percent to RM119 million in 2006. The tremendous growth for Unilever is the result of heavy promotions of some new product lines under the Clear, Breeze, Wall’s and Fair & Lovely banner. Procter & Gamble, previously the second largest advertiser, took fifth place, due to reduced spending on Pantene, SK-II, Rejoice and Olay on Terrestrial television.

“Despite the deceleration in major export markets and a forecasted slowdown in the US and European economies, events like Visit Malaysia 2007, the nation’s 50th birthday celebration and the recently announced upward revision of the market’s GDP for 2007 will all help sustain the momentum of Malaysia’s advertising market in 2007,” said Ms Rebecca Tan, Executive Director of Nielsen Media Research for Singapore and Malaysia.

About Nielsen Media Research

Nielsen Media Research, a business unit of The Nielsen Company, is the world leader in international media research and analysis. It is active in 40 markets, offering advertising information services, consumer media consumption behavior, print readership, television and radio audience measurement and customized media research. Nielsen Media Research measures advertising expenditures and creative content in 30 of the world’s leading advertising markets. Through a network of affiliates, coverage is extended to more than 70 countries, representing 85 percent of the world’s advertising spending.

About The Nielsen Company

The Nielsen Company is a global information and media company with leading market positions and recognized brands in marketing information (ACNielsen), media information (Nielsen Media Research), business publications (Billboard, The Hollywood Reporter, Adweek), trade shows and the newspaper sector (Scarborough Research). The privately held company has more than 42,000 employees and is active in more than 100 countries, with headquarters in Haarlem, the Netherlands, and New York, USA. For more information, please visit, www.nielsen.com.

Table 1

Source: Nielsen AIS

Notes:

*Nielsen Media Research measures adspend based on published rate cards.

1 Nielsen Media Research monitors adspend on terrestrial television only.

2 Radio adspend in 2006 includes all RTM regional channels, Hot FM and Fly FM.

3 Outdoor adspend in 2006 is based on actual spending by five media operators.

Table 2

Source: Nielsen AIS

Table 3

Source: Nielsen AIS

Table 4

Source: Nielsen AIS

Table 5

Source: Nielsen AIS

Nielsen Media Research practices the global standard of measuring adspend based on the tracking of published rate card values, while various advertising media are known to grant advertisers some levels of discounts.