Liberalization won't affect ad industry

Liberalization won't affect ad industry

JAKARTA (JP): Unlike other business sectors, the advertising
industry has no worries about the impact of liberalization on the
world's trades and services.

Matari Advertising, one of the country's major advertising
agencies, for example, sees the liberalization as creating more
promises rather than threats.

Matari's president, Paul W. Karmadi, said on Saturday that
globalization, which will theoretically result in the entry of
more multinational players into the country, will certainly
create a bigger market for local advertising agencies.

In addition to the expected increase in foreign business
interests, globalization will also give a new impetus to domestic
companies to capitalize on larger business opportunities abroad.

"It means more business. The liberalization is, therefore, not
something to fear," he said in a business seminar held by a
marketing and communications institute.

Speakers at the seminar, which was held at the Imperial
Century Hotel in the newly-developed township of Karawaci, west
of here, also included Raymond Toruan, The Jakarta Post's general
manager, Eki Syachrudin, Pan Asia Research and Communication
Service's president, and Budhi Sugarda, a noted communication
expert.

Raymond said that the liberalization in goods and services is
something that could not be avoided.

"No body can stop the strong urge for globalization. Even
governments are powerless to slow down the process of
globalization," he said.

"So, every body has to face the reality," he added.

Raymond said that rapid development in information technology
and communications industry has not only resulted in the rapid
change in the people's lifestyle but also the vision and attitude
of business players.

"This phenomenon, therefore, makes trade barriers no longer
important," he said,

Budhi acknowledged that globalization will create a larger
business pie both at home and overseas for local advertisement
players.

"But for small players, globalization will be a disaster," he
warned.

He suggested that local advertising companies equip themselves
with skills and information technology to enable them to survive
the expected fiercer competition in the globalization era.

Karmadi, however, said that local companies should not worry
about the entry of foreign advertising companies because in many
cases, they could benefit from foreign players.

"In fact, some foreign advertising agencies have already
infiltrated the local advertising market despite the existing
restrictions," he said.

Karmadi saw a massive increase in advertising spending in both
printed and electronic media in the globalization era as the
consequence of the increase in trade volume and business
activities.

According to Matari, the advertising expenditures of global
brands booked an increase of 236 percent in four years to Rp 588
billion (US$255.65 million) last year from just Rp 175 billion in
1992.

Advertising spending for local brands increased by 252 percent
in four years to over Rp 1.89 trillion in 1995 from Rp 536
billion in 1994. (hen)