Yesterday’s launch of a second TV measurement service in Malaysia – backed by Astro, the country’s biggest media company – has set the clock ticking on what appears to be a showdown between competing ratings systems in the country’s US$342 million TV ad market.
Although broadcasters contribute the majority of TV measurement funding in Malaysia, currently provided by Nielsen, media buyers are taking a hard line against working with different sets of numbers, which will drive up costs.
“We absolutely intend to move to a scenario where we have a single unified system,” says Girish Menon, president of the Media Specialists Association (MSA), a trade body for media agencies.
“There are different ways to get there and we have seen examples from some other markets,” continues Menon, who is also Malaysia CEO of GroupM.
“At this moment, we are discussing and evaluating different options, hence cannot comment in greater detail. I can say that we are very clear that the solution has to be cost neutral to the industry."
Menon adds: "We would certainly like to see this resolved by the end of the year.”
The MSA president and GroupM head welcomed the arrival of Astro’s new system, provided by Kantar and designed to address concerns over accuracy, granularity and accountability, as TV viewing fragments across both linear and on-demand services.
Competition would also speed up development of cross-screen measurement, of particular interest to marketers trying to work out the best combination of branding and sales messages across traditional and digital platforms.
At the same time however, agencies are under greater pressure to deliver more savings for their clients, Menon notes, making it difficult to absorb additional costs.
“We cannot afford to pay two different vendors, and see no reason to,” he tells Media Business Asia.
“Two systems would mean double to work for our planners. The agencies are already struggling with talent issues and in terms of being squeezed by client procurement to become more lean and efficient.”
AD BUDGETS UNDER PRESSURE
Malaysia’s ad market, reeling from aviation tragedies last year, is also contending with low oil prices (Malaysia is Asia’s largest oil exporter), a weak currency, a new goods and services tax and political instability.
All this makes 2015 an especially testing time for advertisers, agencies and media owners.
According to analysts from Media Partners Asia (MPA), net TV advertising in Malaysia contracted by 9.5% last year.
The country’s leading free-to-air broadcaster, Media Prima, already weathering rising competition from Astro and online platforms, is feeling the brunt of these storms.
Media Prima’s net TV revenues fell 8% Y/Y in Q1, with TV Ebitda tumbling down 38% over the same period.
If current trends continue, Media Prima’s TV ad revenue could fall behind Astro within the next few years, as the pay-TV operator takes a bigger share of the ad market, both through its subscription channels as well as a fast-growing free satellite platform, Njoi.
Nonetheless, Media Prima’s TV programming still resonates with its core Malay audience, especially in drama, news and documentary, shoring up its appeal for mass-market advertisers who rely heavily on TV.
On the whole, Malaysian TV remains a sellers’ rather than a buyers’ market, although these days there is more room for flexibility in media negotiations.
”Because of this competition, we have more room to strategize, to navigate through this,” remarks Piyee Wong, MD of Vivaki Malaysia.
“It depends on the strategy we want to put on the table,” she adds. “But there is more flexibility and more chances to talk now.”
Astro’s new ratings system, Dynamic TV Audience Measurement or DTAM, is built around two household panels.
One covers 5,000 households, recruited to represent national TV homes while also offering brand and product purchase information. The other collects return-path data (RPD) from 70,000 IPTV and connected boxes, for a more detailed view of viewing habits among upscale pay-TV subscribers.
There has been no official response from Nielsen on a possible response to Kantar’s challenge at press time, although the agency also offers return-path data services in other markets, including in Singapore.
Market adoption for DTAM, first announced last September, would help Astro strengthen its claim on the ad market, where it is fighting on two fronts: with free-to-air TV for mass market campaigns and with online platforms for brands chasing younger as well as more affluent audiences.
Online ad spend information for Malaysia is scarce, making it difficult to calculate attrition on traditional platforms, while slowing the flow of money online.
Nonetheless, audience and usage data is encouraging greater spend on digital media, which makes up around 20-40% of Malaysian marketing budgets, depending on the product category.
“While most marketers are still exploring [online] effectiveness in triggering sales via test and learn, FMCG will still invest heavily in offline TV due to its mass targeting and GRP KPIs,” remarks Yong Shel Vei, research director, consumer knowledge and insights for Omnicom Media Group.
“Tech and auto brands, chasing after audiences who have migrated to online, will have a larger share on online video,” she adds.