Taiwan Ad Spending Slips 6.7% in 2002

Advertisers in Taiwan saw revenue drop 6.7% to NT$82.93 billion (US$2.37 billion at US$1:NT$35) last year, despite gains of 2.21% to 900% in spending on cable-TV, magazine, Internet, mobile-phone messaging, export-promotion, and retail-outlet ads, according to a recent survey conducted by the Brain Magazine.

The fastest growth in ad revenue was in the mobile-phone messaging segment, which saw an outlay of NT$300 million (US$8.6 million) from advertisers last year, up a whopping 900% from NT$30 million (US$860,000) in 2001. Ad revenue in the segment is expected to continue its upward trend this year, according to the survey. Mobile-phone messaging services were first introduced by Far EasTone Telecommunications; by the end of last year all major local mobile-phone companies were providing such services, including Chunghwa Telecom, Taiwan Cellular Corp., KG Telecommunications, and TransAsia Telecommunications.

The cable-TV sector ranked second last year in terms of growth in ad revenue. Cable-TV advertisements generated income of NT$19.719 billion (US$563 million) last year, up 22.14% from the level in the year previous. Cable-TV companies, including Eastern TV, SETTV, GTV, and Videoland, all posted strong growth rates last year due to the popularity of their programs, pricing flexibility, and aggressive marketing.

The third-fastest growth rate in ad revenue was seen in the Internet sector. Internet ad revenue totaled NT$1 billion (US$28.6 million) last year, up 14.94% from the year before. The growth in this sector was due to the fact that the Internet serves both as a media channel and sales channel for advertisers. The growth also indicated an increasing acceptance of Internet advertising by consumers and advertisers.

Advertisement revenue from retail outlets reached NT$1.1 billion (US$31.4 million) last year, up 10% from 2001, making it the segment with the fourth-largest growth rate in the local advertising business. The ad-revenue increase reflected strong overall growth in the retail industry over the past few years.


Old Media Fall


Taiwan's advertisement market has been dominated by wireless television, newspapers, magazines, and radio over the years, but all four sectors saw ad revenue shrink last year.

Wireless-TV broadcasters earned NT$9.82 billion (US$280 million) from ads last year, down 15.09%. FTV was the only TV station to buck the downward trend.

Newspaper-advertisement revenues retreated by 21.84% to NT$16.11 billion (US$460.4 million) last year, while income from radio ads declined 15% to NT$3.57 billion (US$102 million).

A small gain was seen in the magazine sector, where ad revenue inched up 2.21% to top NT$6.65 billion (US$ 190 million). The biggest gainers were popular high-profile magazines that have adapted their formats to cope with market changes, including CommonWealth magazine, Vogue, Business Weekly, and Smart Wealth.

The combined advertisement revenue in the top four sectors totaled NT$57.89 billion (US$1.65 billion) last year, down 5.95% from 2001. Advertisement revenues at commercial exhibitions, which was the largest sector beyond the top four sectors, declined by a whopping 20% to NT$8 billion (US$228.6 million) last year. Revenue from direct-sales ads, the segment next in line after commercial shows, fell 5% to NT$3.808 billion (US$109 million) last year.

Advertisement revenue from export promotions went up 5% to NT$3.1 billion (US$88.5 million) last year--one of the two non-top-four sectors which registered growth.

Figures for other segments include: outdoor advertising, NT$2.009 billion (US$57.4 million), -10%; motor-vehicle advertising, NT$1.267 billion (US$36.2 million), -12%; newspaper inserts, NT$420 million (US$12 million), -50%; telephone-directory advertising, NT$765 million (US$21.9 million), -10%; miscellaneous advertisements, NT$3.28 billion (US$93.6 million), 5%.

The total advertisement revenue for sectors outside the top four by value declined 8.4% to NT$25.04 billion (US$715.5 million).

According to the largest advertiser in Taiwan, Procter and Gamble, 50% to 60% of its advertisement expenses was allocated to the top four sectors. However, the company said it is willing to spend advertisement dollars on new media, such as mobile-phone messaging, which it used last year to promote potato chips.

The Brain Magazine survey reported that most of media operators are pessimistic about the advertisement market this year. However, a few media companies are bucking the slide toward pessimism, and are anticipating double-digit growth for their individual operations this year.