Experts advise healthy advertising budgets
JAKARTA (JP): Companies should maintain their advertising budgets or even increase them in times of crisis in order to maintain or enlarge their market shares, an international advertising expert said yesterday.
Sam Hill, vice chairman and chief strategic officer of DMB&B Worldwide Inc, told an advertising seminar here that the region's economic crisis presented enormous difficulties for all sectors but that opportunities also existed.
He said local firms should take opportunities to promote their products through advertisement. Otherwise, international brands would continue to dominate the country.
He noted that multinational companies, which were more aware of opportunities than local firms, were currently advertising their products aggressively.
He said multinational companies had more resources than local firms for advertisements.
"What happens in the next year or two with multinational advertising could change forever the market share levels between local and foreign products," Hill said at the seminar "Advertising in Times of Economic Difficulty", organized by local advertising firm Perwanal/DMB&B.
Yusca Ismail, chairman of the Association of Indonesian Advertising Companies, and Achjuman A. Achjadi, a director of Perwanal/DMB&B, said the country's advertising expenditures were showing an increasing trend after experiencing a big drop in the first quarter of this year.
They said advertising expenditures were likely to increase 20 percent in April, compared to monthly expenditures in the first quarter of the year.
They said the country's advertising expenditures dropped to between 40 percent and 60 percent in the first quarter compared to the same period last year because of the rupiah's sharp plunge against the U.S. dollar.
They, however, did not provide figures.
They said companies had decreased advertising budgets in the first quarter of the year while reeling from the rupiah's downturn in the period.
Many companies have started to increase their advertising expenditures this month after the rupiah recently regained some of its composure.
The rupiah hit an all-time low of 17,000 per dollar in January but was hovering at the 8,000 level yesterday.
"The strengthening of the rupiah has encouraged companies to spend some money for advertisement," Achjuman told The Jakarta Post.
Achjuman said companies selling consumer goods and cigarettes were currently the most active advertisers, while companies selling secondary and luxury goods were still taking a "wait-and- see" stance.
Although advertising expenditures show an increasing trend for the moment, Jusca and Achjuman projected the country's advertising budgets to drop on average between 20 percent and 30 percent this year.
According to advertising firm PT Fortune Indonesia, total spending on advertising last year was estimated at Rp 4.8 trillion (US$600 million), up from Rp 3.5 trillion in 1996 and Rp 3.3 trillion in 1995. (jsk)