RI's TV ad market becoming competitive
RI's TV ad market becoming competitive
LONDON (Reuter): Indonesia's advertising market has becoming
increasingly competitive with an exploding growth in the amount
of available television airtime, according to a report released
yesterday.
Zenith Media said that, while Indonesia's advertising market
was restricted by low average disposable income, it had grown
rapidly since the dissolution of the state broadcasting monopoly
in 1989.
"After the subsequent launch of five commercial terrestrial
broadcasters, and the explosion of available airtime, the market
has become highly competitive," the report, Television in Asia
Pacific to 2001", said.
"Broadcasters have introduced more flexible airtime pricing
arrangements to gain an edge over their competition," it said.
Zenith said broadcasters were hindered by poor television
infrastructure.
"(But) the pool of advertisers and consumers should widen as
the economy grows to encompass one of the largest television
advertising markets in the region," the report said.
About US$668 million was spent on television advertising in
Indonesia in 1995, which represented a 29 percent growth over
1994.
The figure was forecast to rise to $770 million this year and
$1.5 billion by the year 2001, at constant 1995 prices.
While Indonesia has the fourth biggest population in the
world, only about 40 percent of all homes have television, said
Zenith, which is the media-planning and buying arm of Cordiant
Plc, which also owns Saatchi & Saatchi Advertising.
The report also said $885 million was spent on television
advertising in China last year over 1994, compared to $18.7
billion in Japan, $1.7 billion in South Korea, $1.5 billion in
Australia, $1.1 billion in Taiwan and $1.0 billion in Hong Kong.
That year-on-year expenditure growth was expected to rise by
the year 2001 to $3.1 billion in China, $22.6 billion in Japan,
$4.1 billion in South Korea, $1.8 billion in Australia, $1.7
billion in Taiwan and $$1.4 billion in Hong Kong -- at constant
1995 prices.
Zenith said the presence of cable and/or satellite was
expected to double in China, South Korea and the Philippines by
the year 2001, and grow rapidly elsewhere, including in Hong
Kong, Singapore and India.
In China -- whose 1.2 billion population makes it a hot area
for western manufacturers and ad agencies -- 73 percent of all
homes had television last year compared to 78 percent expected to
have TV by the year 2001.
Only 31 percent of all homes in India have televisions, 40
percent in Indonesia and 57 percent in the Philippines, Zenith
said.
Two-thirds
The report also said that only two-thirds of homes in the
Asia-Pacific region have televisions, but the number is growing
fast, and cable and satellite subscriptions are doubling in some
countries.
The report said that growth in television advertising
expenditure in Asia, which stood at 8.1 percent last year in
constant prices, would ease slightly, with 5.5 percent growth
forecast by the year 2001.
It said "television penetration" was low in Asia compared to
the West, standing at only 63 percent of all households and
forecast to be 67 percent by 2001.
But Zenith said 14 percent of Asian "television homes" already
had satellite or cable TV, the same proportion that existed in
Western Europe in the late 1980s, although nearly every European
home had a television by then.
Zenith said Asian homes with pay-TV spent an average $5.00 a
month on cable and/or satellite.
This included everything from Indian households that spent
less than $1.00 to subscribers in richer countries that spent
more than $30.00.
The kind of figures that Zenith released on television
penetration, and cable and satellite are being gobbled up by
multinational companies and ad agencies trying to reach Asia's
increasingly affluent consumers.
The report covered Asia's 14 most developed countries or
territories.
Zenith said the amount of money spent in Asia on pay-TV
amounted to 11 percent of the total spent by television
advertisers.
"By 2001, we think this will be 24 percent, which is Europe's
current ratio, but Asia will be doing this with a third less
television penetration," the report said.
While rapid economic growth has allowed many people in Asia to
"get wired" and become more technically literate than
counterparts in Europe, Zenith said Asia's television development
resembled that in the West.
"Asia has not leapfrogged the traditional TV development of
state monopoly, then deregulation, then private terrestrial and
finally pay-TV, but cheaper technology has accelerated the
process," it said.