Mediabrands Malaysia CEO Bala Pomaleh
PETALING JAYA: Ad and media agencies are positioning to face the global challenges for 2023 as they embark on strategies to stay relevant and spur their business growth.
The looming global recession, geopolitical risk and inflationary pressures resulting in the higher cost of living are some of the main concerns that agencies like any other businesses are facing.
To maintain their business relevancy in these trying times and boost their performance, they are stepping up their business efficiencies, branding and innovation, data analytics and artificial intelligence, among other initiatives, to stay ahead of the pack and ride out the challenges.
Mediabrands Malaysia CEO Bala Pomaleh, who is also the Media Specialists Association president, told StarBiz innovation would be an effective and efficient driver for the agency as it looks to improve its delivery with better results at a lower cost, especially across eCommerce and performance creative.
There would also be more leverage on data analytics and artificial intelligence (AI) to collect more accurate and reliable consumer data, which in turn would allow for more targeted and effective ad campaigns.
The agency he said has to focus on efficiency as funds are finite, and this applies not just to media but also with creative.
“Mediabrands has been tightening up its efficiency planning across various parameters. Right from tracking campaign performances at a higher frequency to stimulate actionable insights that maximise ad campaign efficiencies, to new eCommerce and consultancy scopes including high value audiences and tightening up on production costs.
“We will now also be focusing more on performance related creative work, a collaboration between our media agencies and creative and content agency Mediabrands Content Studio, which would be key in any campaign plan,” Bala noted.
The Association of Accredited Advertising Agents Malaysia (4As) president Andrew Lee
The Association of Accredited Advertising Agents Malaysia (4As) president Andrew Lee said the growth drivers that would spur the industry this year would be the spread of new technologies like AI and virtual reality, as well as the increasing significance of data-driven marketing, which may all serve as growth drivers for the ad sector.
“Platforms powered by AI might make it simpler for start-up companies to market their goods and brands. The Metaverse may offer clearer marketing opportunities, and firms take advantage of this chance to expand,” he said.
The association views diversity, equity, and inclusivity (DEI) as a key pillar for the growth of all businesses, he said.
“We thus encourage the marketing and communication sector to start playing a role in reshaping this country and eliminating biases.
“4As promotes a shift away from ethnicity-based marketing toward customer attitude, values, and culture. Racial and gender stereotypes must vanish in the workplace and also in the work we produce.
“We must start developing advertising that upholds the values of DEI. We must begin developing communication that values acceptance above merely tolerating it.
“Brands that have changed and adjusted to changing customer behaviour, brands that have improved consumers’ lives, and brands with a purpose will grow,” Lee, who is also Havas Immerse Malaysia group managing director,” said.
M&C Saatchi Malaysia CEO and founder Datin Seri Sharifah Menyalara Hussein
M&C Saatchi Malaysia CEO and founder Datin Seri Sharifah Menyalara Hussein said tough times are a great opportunity for brands. A fundamental truth is that the strongest and most endearing relationships are always built when times are tough, when brands rise above the transactional, she noted.
“Research has shown that when things get difficult, brands which play a meaningful role in making lives better forge stronger bonds with consumers. We hope this is what brands will do as they navigate through 2023.
“We need to find ways to focus and prioritise what will keep our business sustainable and growing. Our priorities will be to create greater product relevance and differentiation, in terms of our creative and strategic offering, looking at ways to monetise strategy, which unfortunately, should be charged at much higher premium rates than the current industry benchmark,” Sharifah said.
So there are bright shafts of sunlight that could dispel the gloom, she said, noting that at M&C Saatchi, we need to find the agency’s own brand sunshine, too.
She said the agency needs to build a fresh and rejuvenated image for its brand. “And we need to focus on our people, building a strong, effective team that lives the M&C Saatchi spirit and culture, and embraces our never-say-die attitude and values of passion and commitment.
“Our core purpose still remains: “Navigating, creating and leading meaningful change for our clients.” Done well, working together, this mantra can turn the worst of times into the best of times, and into a future that fully matches our outstanding past,” Sharifah said.
Tan Kien Eng, chief executive officer, dentsu Malaysia,
To strengthen its ad business this year, dentsu Malaysia group CEO Tan Kien Eng described 2023 as a year of simplification, re-invention, and radical collaboration for dentsu in Malaysia.
He said this involves intense emphasis on sharing the “never before” to solve and grow its clients business to win in the marketplace.
“We have simplified the agency to reflect clients needs and to ensure our people have the power to grow and perform their very best.
“Key areas of simplification cuts across our creative, media and customer experience management (CXM) service line, review internal organisation structure and even down to refining our operating processes.
“The agency has aggregated its media brands into four key brands, i.e. Carat, iPROSPECT, dentsuX and Posterscope. Whilst the launch of dentsu Creative in December 2022 unified all of dentsu creative offerings.
As for the outlook of the industry this year, Tan said as the market gears up for growth, smart marketers would invest in brand building amidst short-term goals to attract new customers and establish stronger relationships with their existing customers.
Meanwhile, Bala said ad spending this year is projected to grow by 9% to reach RM6.6bil based on Magna’s global advertising forecast, adding that digital advertising is expected to continue to grow by 13% for 2023. Magna is one of the leading global media investment and intelligence companies.
However, he said there are hurdles which may slow down ad growth this year, of one of which is global recession. It has the effect of increasing import prices of goods that would impact the costs for local companies, and adversely affect ad spends.
For this year, gross export growth is also predicted to slow down sharply compared to 2022 amidst modest external demand and due to commodity price volatility, he said.
However, Bala said on a positive note, Malaysia’s broad and diversified domestic economy should help to prop up and mitigate this impact of weaker exports.
“In addition, consumer spending is predicted to remain steady. This is underpinned by a stable inflation rate and a declining jobless rate, thanks to strong post-Covid-19 pandemic economic recovery,” he said.
Tan said in a bid to spur the ad and media industry, economic analysts and the media outlets need to dispense more positive news to drive up positive market sentiment.
If not careful, he said this would have a ripple effect and have an adverse impact on confidence to invest.
Lee overall is quite bullish of the ad industry for the year. The future of the advertising sector seems promising, he said, noting that, however, numerous variables, including the state of the economy, technical advancements, and changes in customer preferences, would affect the growth rate.
Sharifah said the agency hopes to ride on the positive gross domestic product growth this year and stronger adex forecast in Malaysia of 9%, compared with Asia-Pacific’s projected growth of 5%.
“The ad industry will also benefit from the birth of start-ups that have become more robust especially, in eCommerce and fintech, and will require greater go to market support from the marketing industry.
“We should also be cognisant of the environmental, social and governance (ESG) sector, as Malaysia embarks on a 2050 carbon-neutral goal. Our industry should play a key role in achieving this, alongside the government, as companies prepare strategic and marketing frameworks to meet ESG targets,” she added.
