Ad sector defies economic downturn in first quarter

Photo by: Sovann Philong
Telecommunications has been the largest advertising growth sector in the first quarter.

Ad Spending Q1

Figures show year-on-year change in ad spending per sector across all media in Q1:
+58pc - telecommunications
+30pc - automobiles
+13pc - toiletries
-29pc - real etate
-51pc - household products

Source: DraftFCB

The Phnom Penh Post
http://www.phnompenhpost.com

Written by Nguon Sovan
Friday, 22 May 2009

Services industries - particularly telecoms - buck general economic trend, with banking sector also spending more on advertising this year

THE advertising sector has defied the economic crunch felt elsewhere in Cambodia on the back of soaring spending by the services sector, figures from local media agencies show.

According to International Media Services Consulting Group (IMS), a massive increase in ad spending by financial services and mobile phone operators led to a year-on-year increase in television placement of around 13 percent in the first quarter of 2009.

"Although property, construction and some consumer segments have experienced decreases in spending, there have been sizeable boosts from Cambodia's highly competitive service sectors with banking and financial placement increasing by over 70 percent and telecoms by 60 percent compared to the first quarter of last year," IMS Managing Director Peang Mann said, declining to disclose absolute spending figures.

He added that newspaper placement increased 29.6 percent year-on-year with growth in revenues largely attributable to the increased frequency of English-language publications.

Figures from media agency DraftFCB also show an increase in spending across TV, print and radio. Spending was up 22 percent in the first quarter compared with a year earlier, again boosted by the services sector.

According to DraftFCB media director Kao Kvenghong, while real estate advertisements dropped 29 percent in the first three months of the year compared with the same period in 2008, and household product placements fell 51 percent, the telecommunications industry spent 58 percent more on advertising, the automobile sector 30 percent more and toiletry brands 13 percent more.

The majority of placements were handled by eight major media agencies, Kao Kvenghong said, adding that DraftFCB's revenues increased 20 percent over the first quarter.

"We have 14 international companies as customers, and of course they cut down some advertising expenses, but they still have an advertising policy and we are an accredited agent, so we have found new customers to replace the reduced spending," he said.

However, Kim Keoleakkhena, assistant account manager at Media Marketing Service Group, said advertising through the company had dropped around 40 percent over the first four months of the year after most of its small customers axed their advertising budgets and larger companies reduced their spending. "Now it is very difficult to find new customers - we have gotten few new customers since early this year."

Real estate ads drop
Kong Vansophy, general manager of the US$1 million Dream Town development in Dangkor district's Choam Chao area, said the company had stopped advertising due to the ongoing slump in real-estate sales. "We spent $8,000 on adverts last year, but since the start of the year, we have not spent even a dollar on ads," he said.

In Channy, president and CEO of ACLEDA Bank, said that the bank had increased its advertising budget 35 percent this year to $1.9 million.

"We feel safe from the crisis due to the confidence in our bank by the public," he said, citing an increase in bank deposits from $487 million at the end of last year to $581 million this month.

Soum Sambath, executive director of Cam-Paint Manufacturing, said that the economic slowdown had hit demand for paint but that the company continued to spend around $50,000 per year on ads.

"Advertising is an effective way to sell our products, so we won't cut the amount for adverts for this year," he said.

Peang Mann said IMS had continued to grow in 2009 and now represented more than 50 local, regional and international customers in Cambodia, including Colgate-Palmolive, Mega Lifesciences, Honda, Swensens, Namyang, Ciputra, Bangkok Hospital, Nissan and Asahi.

The company had also been behind a number of recent product launches including creative and media campaigns for Special Beer and Label 5 Whisky. "Despite both of these brands being new entrants into the market, they have achieved very significant sales results and are now challenging much longer established brands," Peang Mann said. "This demonstrates the power that advertising can have, even during tough economic situations."