Advertising expenditure in Malaysia reached RM5.8 billion in 2018, driven by increased spending by government ministries, government agencies and political parties, according to Nielsen Ad Intel1, which monitors traditional media in the country.
“While like-for-like ad spend on traditional media types we monitor dipped 9% compared to 2017, at a total level, some of this decline can be attributed to the shift towards digital advertising,” says Jon-Paul Best, Head of Watch, Nielsen Malaysia.
For traditional media, cinema adex continued to be the strong performer, posting an increase of RM86.5 million versus 2017, while free-to-air television (FTA) arrested the decline in spend seen in the previous year (up RM2.1 million year-on-year).
THE GE14 FACTOR
Adspend for March to May increased 5% month-on-month, reaching RM1.6 billion. During the lead up to the General Election, political parties and the Election Commission spent an estimated RM51.2 million (versus RM3.9 million in March-May 2017), more than half of which was spent on Newspapers (55%), particularly Chinese and Malay language dailies. Another 42% was spent on FTA television.
However, overall adspend declined as the election approached, bottoming out on polling day itself (from RM47.8 million on 1 May to RM10.9 million on 9 May), as attention turned to election news and results.
“MALAYSIA BAHARU” SPURS ADSPEND
The surprise win by Pakatan Harapan and the shift in policies also influenced sector adspend. Following the announcement of the zerorisation of GST, many brands across various sectors took out advertisements to encourage shoppers to take advantage of the three-month tax-free period. Adspend during this time among automotive manufacturers increased 19% from May to June 2018 as they scrambled to communicate their GST refunds to buyers, while financial services’ adex increased by more than 100% in the same period, aided by advertisements for services such as car loans.
“We also saw a number of brands riding the wave of Malaysia baharu, aligning their brands with messages of change as well as new policy announcements,” says Best. “For example, a popular shoe brand increased its adspend by 200 times in May after a photograph of Prime Minister Tun Dr Mahathir Mohamad wearing their shoes went viral.”
GE14 was not the only event in 2018 to spur adspend. Global and local sporting events such as the FIFA World Cup in June, SUKMA Games in September and the AFF Suzuki Cup in December also contributed significantly to the year’s overall advertising expenditure.
It is no surprise that, among these sporting events, the FIFA World Cup was the most impactful, with the official sponsors spending the following on World Cup specific advertising:
- Mobile Line Services and Communications: RM5.8 million
- Coffee: RM4.0 million
- Airlines: RM2.8 million
Non-sponsors from categories such as Hair Shampoo & Conditioner, Men’s Face Care, Toiletries – Range of Products (e.g.: fragrances, shaver) and Gaming/Gambling also capitalised on the football frenzy to drive sales.
For the first time in recent history, FIFA World Cup matches were also broadcast on the state-owned RTM channels, resulting in a 33% month-on-month rise in adspend for RTM from May to June 2018.
Best says that the airing of global events such as the World Cup on FTA channels presents an excellent opportunity for brands to reach a mass, diverse audience, saying: “Around 60% of the total TV population in Peninsular Malaysia tuned in to at least one World Cup match on free-to-air channels this year2”.
OFFLINE TO ONLINE?
As e-commerce gains traction in Malaysia, its impact on traditional advertising expenditure is positive, as online retailers and mobile wallets leverage the mass reach of FTA television, radio and cinema to raise awareness on their products and promotions.
For example, in November 2018, adspend climbed 6% versus the previous month, boosted by two high profile e-commerce platforms promoting their one-day-only Singles Day (11.11) mega sales event. Together, they spent RM7.8 million more during this month, with the majority spent on FTA television.
“Some may consider it ironic that high-profile e-commerce players are prepared to spend so much on traditional advertising,” says Best. “Whilst we cannot deny its increasing importance, our current data shows that less than 5% of all consumers rely purely on digital media3. In the case of the 11.11 sale, online retailers took advantage of the mass reach offered by offline media to raise awareness of the discounts provided in the hope of driving traffic to their shops.”
1Media types monitored on Nielsen Ad Intel: Free-To-Air Television,Newspapers, Magazines, In-Store Media, Cinema, Radio (excluding RTM stations)
2Source: Nielsen Television Audience Measurement, measures TV viewing habits of over 5,000 individuals aged 4 and over in Peninsular Malaysia. Period: 14th June to 15th July.
3Nielsen Consumer & Media View, July 2017-June 2018, from a representative sample of 10,000 individuals aged 15 and over in Peninsular Malaysia.