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Ad spending on the rise

Ad spending on the rise

However, telcos cut their expenditures nearly 24pc in February

ADVERTISING spending within the telecommunications in-dustry plummeted nearly 24 percent last month year on year, but the competitive sector remained Cambodia’s top spender according to new research.

Statistics compiled by Indochina Research Ltd (IRL), released to the Post Wednesday, show that an estimated US$1.13 million was spent on newspapers and TV adverts by the telecommunications sector this February. That compares to $1.48 million in February 2009, a drop of around 24 percent.

The beverage sector remained the second-highest buyer of advertisements with spend rising 6.5 percent to $1.04 million from around $975,000 in February last year. Personal-care adverts remained steady in the third spot, with public announcements rocketing into fourth – from last year’s seventh spot.

The total advertising spend for the top 10 sectors in February increased slightly compared to a year ago, showing a 4.3 percent increase to about $5.37 million from $5.14 million.

The statistics, calculated using nominal rate cards and the number of adverts appearing on leading TV channels and publications, reveal the industry has shown some signs of recovery following the economic down turn.

“Based on our data, year-on-year ad spend has increased by 20 percent,” Laurent Notin, general manager of IRL, said Wednesday.

In comparison, he said, total spend in 2009 was 20 percent below levels in 2008.

According to Notin, the data showed “some positive” indications but “it has to be sustained long term”.

Marketing manager at mobile phone company Hello, Gary Foo, noted the “huge drop” in telecoms advertising displayed by the figures and pointed to last year’s economy as a potential cause for reduced advertising budgets.

“I believe companies will continue to spend, but they are definitely more selective in evaluating the effectiveness of each medium,” he wrote in an email Wednesday.

He pointed out that not all advertising is monitored or audited while some adverts are offered at discount rates – making evaluation of the medium difficult.

Foo also emphasised the importance of advertising for the mobile-phone market, where nine companies are vying for an estimated 5 million-plus subscribers.

“Certainly brand awareness and top-of-mind recall is important and ever more so in a crowded sector,” he wrote.

Anthony Polovineo, general manager of advertising agency River Orchid, put the drop in telecoms spend down to new companies developing their marketing strategies past big brand-building budgets.

“Now that they, in most cases, are well established in the market there can be seen a shift from heavy brand communications to more specific and tactical campaigns,” he wrote in an email Wednesday.

It remains unclear how a government prakas setting minimum tariffs to prevent price-dumping in the mobile sector, issued late last year, has affected advertising.

Sector leaders in Cambodian advertising remain tentative but positive about the future after a hard 2009.

CEO of Phnom Penh-based firm Orange People, Nathanial Chan, believes that advertising revenues fell by 40 to 50 percent in just 18 months after the crisis hit in late 2008.

“The last year has been miserable. The industry got hit really badly, as for many businesses advertising and marketing budgets are the first to go,” he said Wednesday.

In recent months, he has seen a glimmer of hope. Since the end of February, he said, companies have been holding talks with advertising firms.
“Things have changed dramatically. This is a good suggestion that things will turn around. But nothing is concrete yet,” Chan said.

Polovineo added: “One can assume that as economic conditions improve across the board, that advertising expenditure is likely to bounce back.”

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