Govt, healthcare and pharma brands remain advertising lifeline

In May, adex rebounded by 32%, boosted by Ramadhan and Raya-related ads and the reopening of many sectors

by RAHIMI YUNUS/ graphic by MZUKRI

HEALTHCARE and pharmaceutical brands, as well as government-related agencies continue to be the bright spot among marketers as the biggest spenders in terms of advertising expenditure (adex), while other businesses continue to cut costs amid the Covid-19 crisis.

Nielsen Co (M) Sdn Bhd media head Jon-Paul Best said the big spenders were mainly businesses that could help consumers get through the restrictions, particularly the government, such as the Health Ministry and Malaysian Communications and Multimedia Commission, as well as pharmaceuticals: Tonic and vitamins, milk and dairy, and fever and headache remedies.

On the other hand, he said categories which have reduced spending the most were those most impacted, including entertainment, education and learning, accommodation, travel and tourism, as well as retail and classifieds.

“While there was an initial knee-jerk reaction to reduce spending, especially in the first month following the Movement Control Order (MCO), this was not universal as medical and pharma-focused brands remained active as they looked to promote the value of their products and how they could help consumers stay safe at the beginning of the outbreak,” Best told The Malaysian Reserve (TMR) recently.

According to Nielsen Ad Intel data, overall adex contracted by 32% year-on-year (YoY) to RM636.2 million in the March-April period at the onset of the outbreak, along with the initiation of the MCO on March 18.

The decline in adex for the two months under the MCO was a reversal from the 12% YoY growth to RM967.5 million recorded in January and February.

In May, adex rebounded by 32% to RM331.6 million from April, boosted by Ramadhan and Raya-related ads and the reopening of many sectors on May 4 onwards.

For the period, free-to-air television’s (TV) share of adex increased to 55%, digital spend up 25% and print, particularly newspapers, still struggling with a 16% share, but yet an improvement from its April lowest of 11%, the data showed.

Advertising in other media, except for cinemas which were still closed at the time, made up the remaining 4% of the adex market.

Best said fluctuations in adex across the media industry were evident as the MCO progressed.

“We saw an encouraging rebound to advertising activity by May 2020, driven not only by the lifting of more industry restrictions with the Conditional MCO, but also by Ramadhan and Raya-related ads for the period.

“Notable ad spend increases seen in the communications sector, local government, phones, retail and fast food centres,” he added.

While there was “almost a complete pullback of spending” at the onset of the pandemic and the movement restrictions, Best said brands that have spent more on ads used the opportunity to get their messages across, remain relevant and reach out to consumers who were spending more time on media across different screens all day, every day.

Besides media ad spend, Nielsen tracked TV audience behaviour, which showed an increase by about one-third in the number of viewers of linear TV in Peninsular Malaysia, giving an additional one million viewers per average minute rating.

Best said the average time spent in viewing TV was five hours and 30 minutes in January and that has risen just over seven hours by the end of March, and also about six hours and 15 minutes in June.

“Despite the challenge of digital innovations, TV remains a dominant player with past week’s penetration remaining relatively consistent for the past few years.

“As we saw with the analogue switch-off last year, there were shifts in viewing behaviour, with consumers trialing new channels and rediscovering old ones. This pattern seems to have been repeated within the MCO,” Best said.

He added that it shall be observed if the momentum in TV may carry through in the coming period and how the messages of advertisers capitalising on the opportunities of increased media and screen exposure may impact the rest of the industry.

TMR reported that digital advertising provided by the new media has taken a bigger market share and eroded revenue recorded by traditional media that are still struggling to make money online although they have begun the business model transformation.

Social media networks such as Facebook, Instagram and YouTube have broken down the barriers in content-making, distribution and consumption.

Universiti Teknologi Mara deputy dean of academic affairs (Faculty of Communications and Media Studies) Dr Wan Hartini Wan Zainodin said social media networks have evolved content creation and marketing methods to the individual level.

She said traditional media need to adapt to the trend and technology spearheaded by the new media which include social media to remain relevant in the future.