Business good for advertising firms

The Jakarta Post, Jakarta

Advertising industry spending on TV and print media spots grew 19 percent in the first quarter, hitting Rp 7.03 trillion (US$798.75 million), according to ACNielsen Indonesia.

This represents a significant rise from advertising spending of Rp 5.92 trillion in the January-March period of 2006, and Rp 5.54 trillion in the same period in 2005.

Of the Rp 7.03 trillion spent by the advertising industry in the first quarter of this year, 66 percent went to 19 surveyed television stations, 30 percent to 82 newspapers and 4 percent to 127 surveyed magazines and tabloids, according to ACNielsen numbers released Tuesday.

Ika Jatmikasari, ACNielsen Indonesia senior manager, said the negative impact of 2005's twin fuel price hikes had eased and businesses were putting more money into advertising.

"The fuel price hikes were still affecting many companies last year, forcing them to slash their budgets for ads.

"But now, ad spending is picking up and will rise throughout the year as more new products fill the markets. In the meantime, businesses still need to advertise to build up brand awareness," she said.

Commenting on the jump in total ad spending in the first quarter, she said businesses normally spent more money on advertising in the beginning of the year, when they introduced new products.

ACNielsen data show that communication handset producers and service providers topped ad spending in all surveyed media during the January-March period, at Rp 457 billion, or 51 percent higher than the Rp 303 billion spent by the sector in the same period last year.

GSM-based operator Telkomsel and cell phone manufacturer Nokia led ad spending in the sector with Rp 47 billion and Rp 35 billion, respectively. Telkomsel's spending increased from Rp 23 billion, while Nokia's was down from Rp 37 billion in the same period in 2006.

Television stations benefited mostly from advertising by hair care producers, who spent a total of Rp 321 billion. That figure was down from Rp 328 billion in the corresponding period last year.

Clear anti-dandruff shampoo topped both the hair care segment and other brands with Rp 72.03 billion in broadcast advertising expenditures, a whopping increase from Rp 34.97 billion in the same period last year.

In newspapers, communication handset producers and service providers spent Rp 184 billion in advertising, up from Rp 140 billion in the same period last year.

Ika projected the advertising industry would continue to grow steadily, despite a newly issued ministry regulation recommending the use of local content and talent in ads to be broadcast on local TV stations.

She also said the "vague" ministry regulation, issued May 1, would not cause businesses to cut ad budgets or switch to other media for advertising. (06)
KuKuKaChu: dangerously too sophisticated