2009 Ad Spend To Decline In Most Sectors, With Few Exceptions

In line with global trends of which the advertising/media industry is no exception, Mindshare Singapore has predicted a 15% decline in Singapore's media spend in the year ahead across platforms such as television, print and out-of-home.

Mindshare is also expecting a first from the current slowdown. It is seeing clients planning significant shifts from one channel to another as a result of the slowdown.

In the last major regional slowdown in 1997, media was not as fragmented as today. Back in 1997, there were not many alternatives to TV and print. Since then, there had been an explosion of alternative forms of AV media, such as cable TV, IPTV, the internet and outdoor screens. Cable TV is expected to hold as it inherits the terrestrial TV budgets due to better value.

With declining TV ratings and unfavourable media rates, advertisers are beginning to increase their focus on these alternatives to see better returns on their media investments.

Bucking the trend are sectors like entertainment, luxury, pharmaceutical and government-services which are not showing signs of budget cuts.

"There shouldn't be any major budget decline for the entertainment sector like movie distributors and cable TV, as consumers are expected to spend more time at home or go to the cinemas, due to work-related stress. The luxury sector is also quite a resilient sector, as the full impact of the crisis is still being assessed within the high net-worth individuals segment," Jimmy Lim, executive director of MindShare Singapore, said.

The advertising budget cuts in 2009 as compared to last year ranges from 30% to 45% in the banking sector, 30% to 50% for the FMCG sector and 30% to 50% in the automotive sector.

The study also points out to aggressive spending by the Singapore government, for instance the Ministry of Manpower which is investing in re-training due to lay-offs through the Workforce Development Agency and the Skills Programme for Upgrading and Resilience schemes, and the Ministry of Trade's various incentives for SMEs to tide over the recession.