Experts advise healthy advertising budgets
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)