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Ad spend surges in Q1 2010

Ad spend surges in Q1 2010

ADVERTISING spending for the Kingdom’s businesses climbed by a third in the first three months of this year, compared to the same period last year, a new survey shows.

The telecoms sector lost its status as top marketing spender to the beverage sector, and a total of US$20.3 million was spent on advertisements nationwide during the first quarter of 2010, a study by Indochina Research Ltd (IRL) found.

This was some 33 percent more than the same period 2009, but remained 3 percent below 2008 levels.

“There appears to be an air of positivity about the economy and the future, which may very well be driving this,” wrote Anthony Polovenio, general manager at the Cambodian branch of regional marketing firm River Orchid, on Wednesday. He confirmed he has seen “positive signs” for advertising revenue in the first quarter, though he declined to release his firm’s figures.

The IRL report cited burgeoning television marketing expenditures as the key driver of growth. Television spending grew 43 percent, as research pegged the cost of a television advertising spot at $156 for the quarter, an increase of $42 over the same period last year. Advertisers, however, reduced spending in print media by 16 percent.

“Despite the financial turmoil, the advertising market has performed better thanks to the rise of TV advertising budgets in key sectors of activity,” the report concluded.

The beverage industry overtook the telecommunications sector to become the largest spender on advertising, according to the report, at $3.48 million, 38 percent more than last year. Telecommunications firms financed $2.93 million in print and television marketing this year, 20 percent less compared to last year.

Officials at Phnom Penh-based advertising firm Orange People said the firm witnessed a relative decline in the level of spending by telecommunications firms, as their business models changed.

“Whatever the [new] model is, it is affecting the advertising industry very much,” CEO Nathaniel Chan said Wednesady. He expects consolidation among the nine mobile operators in the Kingdom.

“If [smaller telecommunications firms are] not going to be there any more, obviously there will be a chunk of revenue leaving the country,” he said.

He added that an exodus by the smaller telecoms players would disproportionately affect smaller agencies, as many larger companies signed marketing contracts with firms based abroad.

Chan also said that advertising in nontraditional media was growing, and that concerts his firm hosted in the countryside often drew 20,000 to 30,000 people.

“A lot of clients are opening up to these [new] ideas. In Cambodia, that’s radical advertising,” he said.

But Polovenio expects telecommunications advertising expenditures to grow.

“As the market grows in both knowledge and sophistication I think we’ll see new strategies being adopted to ensure marketing budgets are utilised accordingly,” he added.

IRL’s survey was restricted to TV and print. Ad spend was based on nominal rate cards.


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