Jul 20, 2011

Spending on advertising has more than tripled in the past four years

A Myanmar Marketing Research Development (MMRD) study found total expenditure on advertising grew from US$17.36 million in 2006 to $56.9 million in 2010, with average annual growth of 36 percent.

Growth was strongest in 2010, when spending was up 48pc on the previous year. The firm collected data of advertising expenditure in the broadcast and print media sectors nationally, as well as outdoor media in 47 townships across the country.

MMRD managing director U Moe Kyaw told The Myanmar Times that developments in the broadcast media industry and more foreign brands trying to break into the consumer market were driving growth.

Broadcast media claimed 61pc of total expenditure in 2010, followed by print publications with 33pc and outdoor media with 6pc. Radio stations were not included in the broadcast category, but MMRD estimates $2-3 million is spent on radio advertising a year.

U Moe Kyaw said despite recent growth the advertising industry was still in its infancy and spending was low compared to neighbouring countries. He cited the example of Thailand, where companies spent $2.2 billion on advertising in 2005, according AC Neilsen Media Research.

He said many Western brands continued to shun Myanmar and a change in this regard would have a significant impact on the ad market here.

“Thailand has a great number of foreign investors and the [consumer] market is competitive as they have many brands for the same product. About 16 years ago in Myanmar, there were some foreign brands but they stopped exporting here because of US and EU sanctions. If the policy towards foreign investors becomes more open and flexible, there will be great potential for the advertising industry,” he said.

MMRD assistant general manager Daw Sabei Aung said the survey found a clear preference for advertising in broadcast media.

“Advertisers use on average 60 to 80pc of their budget for TV commercials because they believe it is the most effective media for reaching customers,” Daw Sabei Aung said, adding that spending on broadcast media grew at 60pc by 2010, outperforming the market as a whole. “The main reason is the larger audience reach. About 70pc of the population lives in rural areas and for the most part only television advertising can reach them.”

Daw Sabei Aung said there would “definitely” be strong growth in ad spending in coming years, as more foreign brands were entering the market. She said a foreign company typically spent 10 times more on advertising than a local company.

“The advertising industry will continue to grow because there are more products and brands in the market. In the past, for example, there were only two or three brands of coffee mix but there are many brands now. Companies have to inform customers about their products and the media is the only way to reach a wide audience,” she said.

U Kyaw San, managing director of Multimedia Group, which sells ad time to advertisers on behalf the television networks, said the launch of MRTV-4 – a joint venture between the Ministry of Information and Forever Group – had invigorated the broadcast media market. In recent years, Forever Group and Skynet have launched subscription-based television services that have also attracted local advertisers.

“There were only two channels previously but after MRTV-4 was introduced about seven years ago the media advertising market became more competitive. It’s become more serious since more subscription and free-to-channels have launched,” he said.

MRTV-4 also charges significantly less than its competitors, the state-run MRTV and army-run Myawaddy, because it is only broadcast in Yangon and surrounding areas. A 10-second slot on MRTV-4 costs from K30000 to K75000, far below the K30,000 to K170,000 charged by MRTV and K30,000 to K80,000 on Myawaddy. MRTV can be received nationally, while Myawaddy can be watched in about 80pc of the country.

U Kyaw San said further growth in broadcast media spending was likely in 2011, as the government had relaxed censorship and this was attracting more foreign advertisers.

“In the past, the censorship on TV commercials was very strict. When there are many limits, it’s difficult for directors to make commercials. Since 2010 the government has relaxed some restrictions [on content] and it’s been very noticeable since the new government took office,” U Kyaw San said. “It’s also become much quicker to get approval for advertisements from the censors.”

While three free-to-air television networks – and possibly more later this year, if recent rumours are correct – fight over a fast-growing market, the picture is slightly different for print publications.

Spending was up 27pc in journals and 28pc in magazines in 2010, while state-run newspapers enjoyed a 34pc increase. According to government figures, there are 176 licensed journals and 182 magazines but turnover in titles is high, with many startups quickly closing down.

U Ko Ko, chairman of Yangon Media Group, publisher of The Yangon Times and Flower News, said without advertising journals and magazines would be prohibitively expensive for readers. “In my publications about 30 to 35pc of the pages are for advertisements,” he said. “Without ads, readers won’t be able to buy journals at the current prices. They cover about two-thirds of our print costs.”

Advertisement prices vary significantly between the major print publications, with The Yangon Times charging K8500 for its smallest ad and K700,000 for a full-page advertisement. Ads at 7-Day News range from K56,000 to K1.6 million, while The Myanmar Times charges $115 to $2280 for a single language edition, with a discount for advertising in both Myanmar and English editions.

Source: Myanmar Times