PETALING JAYA: Digital advertising is expected to continue to drive ad spend growth in Malaysia, according to Mediabrands Malaysia.
The agency’s chief investment officer Fan Chen Yip said this signals a further push towards digital mediums as consumers, especially millennials and Gen Zs, increasingly seek connection and immersion in digital spaces.
“For 2023, advertising revenues are forecast to reach RM8.3bil, with digital comprising 72% of this total.
“Drilling deeper into these digital spends, mobile is forecast to take a significant portion of digital ad spends at 78%, indicating the mobile-first consumer behaviour of Malaysians that is continually growing.
“Forecasting further into the future, digital is anticipated to garner 82% of total media budgets by 2027, indicating room for significant digital innovation across media platforms,” Fan said.
Meanwhile, Magna, based on its global advertising forecast, is projecting Malaysia’s digital advertising spending to grow by 13% this year, following a 19% growth in 2022, to reach 72% of total budgets.
Digital advertising spending for this year is expected to be led by mobile devices, which is anticipated to increase by 16% and represents 78% of total digital budgets.
By format, spending would be driven by social media (plus 15%), search advertising (plus 12%), and video advertising (plus 11%).
Magna is one of the leading global media investment and intelligence companies.
It is the global media investment and intelligence agency within the IPG Mediabrands network, which is the media and marketing solutions division of New York-listed Interpublic Group.
Mediabrands Malaysia is part of the Interpublic Group.
According to Magna, media owners advertising revenues in Malaysia are expected to increase by 9% to reach RM8.3bil for 2023.
In 2024, it said that total advertising revenues would reach RM8.8bil, a 6% growth from 2023.
In the current environment, linear advertising revenues are expected to increase by 2% to RM2.3bil this year before declining in 2024.
Linear advertising refers to the displaying of ads via a schedule through satellite and cable TV.
TV spending, which is expected to grow by 2% this year, is now 87% of their pre-Covid total.
“Recovering from the fallout due to closed operations throughout the pandemic, cinema is anticipated to continue its recovery by a significant 21% revenue growth this year.
Finally, an increase in consumer behavior will further increase out-of-home (OOH) spending this year by 7% but will decline by 5% in 2024,” it noted.
On the Asia-Pacific front, it is forecast that media owners advertising revenues would reach US$842bil (RM3.9 trillion) this year, a 4.6% growth versus that in 2022.
In this region, digital advertising is powering total market growth.
By digital format, this year’s advertising growth is expected to come from social media (12% growth) and video (11%), with search also growing by 9% (but already representing a huge 47% of total digital budgets).
Leigh Terry, CEO of Mediabrands Asia-Pacific said: “The region’s advertising economy is anticipated to show strong growth of 7% this year, higher than the global average, and powered by growth markets like India (plus 12%) and Pakistan (plus 11%).
“Digital advertising in Asia-Pacific has slowed significantly in 2022 and 2023 versus the pre-2022 trend, but remains resilient and continues to lead all formats for advertising revenue growth.
“Many of the headwinds that slowed Chinese digital advertising revenue growth in 2022 (zero-Covid policy, continued government regulation headwinds, etc.) are lessening in 2023 and this will allow big digital publishers to continue to grow.”
In 2024, economic stabilisation and the return of major cyclical events would re-accelerate ad spend by 6.1% to US$892bil (RM4.1 trillion) globally, Magna said.
Vincent Letang, executive vice-president of global market research at Magna, said worldwide advertising spending slowed down to a halt in the first quarter of 2023 due to economic uncertainty and the lack of cyclical drivers.
He said there are, however, some drivers mitigating the impact of economic slowdown like eCommerce and retail media bringing more marketing dollars into digital advertising formats, and the counter-cyclical dynamic of some large industry verticals (retail, auto and travel).
“On balance, Magna expects the global marketplace to keep growing this year, as it managed to do during the brutal Covid-19 recession of 2020.
“Innovation keeps the market moving.
“Traditional media owners are developing cross-platform capabilities and brand-safe addressable solutions that are increasingly attractive to brands, and now account for 19% of their advertising revenues.”
