Slowdown bites in Asian advertising
Date: 07/06/2001
Advertisers spent less in Australia, South Korea and Taiwan during the first quarter of this year and spent less overall in much of the region than they did during the same period last year.
Only spending in China and some South-East Asian nations increased during the quarter, but more slowly than in the first quarter of last year, according to US market research company ACNielsen.
The US economic slowdown is starting to be felt in Asia, and that is reflected in advertising spending, which started to slow in the US at the end of 2000.
"Spending is down," said Mr Roland Crouch, regional operations director for Zenith Media Asia, which buys commercial time slots and space in printed publications for advertising agencies. Ad sales had been strong in the first quarter last year due to dot com spending and the continuing recovery of advertising from the Asian financial crisis of the late 1990s.
"The whole market seems stagnant, and some markets have real problems," he said.
ACNielsen numbers are based on published rate cards detailing the cost of advertising space. But the numbers are not always precise because they do not factor in rate card negotiations. Indeed, with discounts, many markets showing modest growth may have fallen in the first quarter.
"Most big advertising firms negotiate off rate card deals, getting a 30 per cent to 40 per cent discount," Mr Crouch said. "This implies big growth, but the underlying net media trend is much smaller."
Spending cuts in the retail, luxury goods and car industries contributed to the overall drop in advertising. Nervousness about the South Korean economy and about political instability in Taiwan prompted advertisers to slash spending.
Ms Sherrin Loh, international media director at CIA Medianetwork International Asia, owned by the Tempus Group, said she expected CIA's largest client in Korea, LVMH Moet Hennessy Louis Vuitton, to cut spending further by mid-year.
"I think that other markets will follow suit," Ms Loh said. "Singapore and Hong Kong could go flat in the next quarter."
Dow Jones
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