KUCHING: Despite the concluded FIFA World Cup sporting event, gross advertising expenditure (adex) growth for June eased to 6.1 per cent month-on-month (m-o-m) against the 10 per cent growth seen in May.
The research arm of Kenanga Investment Bank Bhd (Kenanga Research) in a report said the slower growth in June’s gross adex on a monthly basis was generally led by slower growth in all segments namely print, radio and television although the growth was positive.
Kenanga Research analyst Cheow Ming Liang in a report believed advertisers as well as consumers have felt the heat following the country’s inflation rate staying above the three per cent mark as a result of higher food, housing and gas prices.
“The FIFA World Cup fever did not translate into a meaningful adex growth to the local television (TV) segment in June, where pay-TV adex has merely grown by 5.4 per cent MoM against 11 per cent m-o-m recorded in May, while free-to-air (FTA) adex climbed 7.6 per cent m-o-m,” he said.
“On the year-to-date (YTD) June basis, the total gross adex climbed by 13.6 per cent year-on-year (y-o-y) to RM6.8 billion due to continuous strong adex from pay-TV which grown by 23 per cent, followed by newspaper (11.1 per cent); and FTA (6.3 per cen) segments.
“Excluding the Pay-TV segment contribution, the YTD June gross adex merely improved by 8.6 per cent y-o-y,” he said.
Meanwhile, Cheow noted that the strong YTD jump in gross adex for newspaper was driven by the higher performance in the English papers (30.1 per cent y-o-y) and Bahasa Malaysia papers (5.5 per cent) but partially reduced by the sluggish performance of the Chinese papers which contracted 3.4 per cent y-o-y.
YTD, the analyst said Pay-TV gross adex continued to exhibit strong double-digit growth of 23 per cent y-o-y to RM2.6 billion with the FTA TV added 6.3 per cent growth y-o-y.
In particular, the FTA TV gross adex improved by 7.6 per cent on a monthly basis in June while pay-TV adex increased by 5.4 per cent despite the FIFA World Cup event in June.
As for pay-TV, Cheow noted that the gross adex for Astro Malaysia Holdings Bhd’s pay-TV segment in the second quarter of 2014 (2Q14) advanced by 16.1 per cent y-o-y or 26.1 per cent quarter-on-quarter (q-o-q) to RM1.4 billion.
For FTA TV, Media Prima Bhd’s FTA TV segment’s gross adex in 2Q14 inched up slightly by 0.4 per cent y-o-y or 10.8 per cent q-o-q to RM714 million.
Subsequently, he noted the adex growth of Media Prima’s FTA TV segment in the first half of 2014 (1H14) grew by four per cent y-o-y to RM1.36 billion.
Given the marginal growth for gross adex in June, Kenanga Research has maintained its ‘underweight’ view on the media industry.