Technology
and the people can’t be a part, it shouldn’t be much of a surprise that the
greatest challenge facing traditional media is technology. Nearly every media
outlet, from print to broadcast, has been affected by the rise in digital
media. Newspapers are slowly dying, hard copies of albums are becoming relics
of the past and DVDs are slowly being replaced with streaming movie services.
E-book readers now allow consumers to carry thousands of books, newspapers and
magazines in a single device.
Let the figures speak for themselves by referring to Aegis Global Advertising
Expenditure Report May 2013.
Digital ad spend is growing 25% Year on Year
in Malaysia
By looking at the chart above, Digital ad spend enjoys the biggest
growth among all the media, with 25% Year-on-Year growth from 2012 to 2013.
This is followed closely by Outdoor ad spend with 24.8% Year-on-Year
growth (yes, as you can see nowadays there are more glaring e-buntings on the
main roads).
It
is an effort to go green and beautify Kuala Lumpur, the conventional bunting
that mar the city’s look have been replaced with the new e-bunting.
However if you refer to the table below, not all media (including
Outdoor) are enjoying consistent yearly growth like Digital, which maintains in
the range of 20-30% Year-on-Year growth including the forecast for
this year 2014.
No doubt, Newspaper and Magazine advertising expenditure are not growing
fast since 2011~2012. Are advertisers putting their ad money online as claimed
by the by Star Publications?
Profit and loss statement of Star Publication Annual Report 2013 shows
that the company’s profit after text has decreased by RM61,326,000 during 2012
to 2013. It is bad performance recorded by the Star Publication Group in five
years (2009-2013). However we can’t state that this bad performance of the Star
Publication come from the revolution of digital media in the market only, but
there must be influences by another factors from internal and external factors
of the company. It is supported by the Porter’s Competitive Forces Model that
state that in order to become a leader in some industry it is important to
study the general view of the firm, its competitors and the firm’s environment.
In this model, five competitive forces shape the fate of the firm.
In Porter’s competitive forces model, the strategic position of the firm
and its strategies are determined not only by competition with its traditional
direct competitors but also by four forces in the industry’s environment: new
market entrants, substitute products, customers and suppliers.
So, based on this Porter’s Model we believe that the revolution in
digital media might not be the only reason even though digital is growing fast
and consistent.
Moreover, it is supported by the pie chart below.
Big chunk of ad spend still go to TV and Newspaper in Malaysia
Based on this pie chart, traditional media advertising still on demand in the market, 41.9% of total ad spend in 2013 still go to Newspapers, and together with Television both capture close to a whopping 90% of total market ad spend.
Digital in contrast commands only 1.5% advertising expenditure share, even behind Radio (4.9%), Outdoor (1.9%), and just slightly more than Magazines (1.4%).
However, the company should realize that the technology always moving
forward. Even the result in Malaysia state that the traditional media
advertising still in demand in the market but the company must ready to moving
forward to the digital media advertising in order to be competitive and relevant in the
market field.
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