The Magic of Surveys


Economic News

22 Jul 2010
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Recent results showing advertising expenditure in Malaysia up again during the first half of 2005 came as more evidence of the country's expanding media base. Yet a more diverse media also means advertisers need to be more thoughtful than ever about where to put their messages.

The figures, which were collated by Nielsen Media Research (NMR), came on top of a dispute over the company's methodology for identifying consumers.

The data shows that ad expenditure in the country will reach RM4.53bn ($1.20bn) by the end of 2005. This would represent 2.5% growth over the year, impressive given that it comes after 17% growth in 2004, even if it still represents a considerable slowdown.

"This year's growth is lower because there were not many major events," explained NMR Executive Director Danyal Abdul Malik when announcing the figures. He attributed the growth in 2004 to major events such as the Olympic Games and UEFA EURO 2004, which caused the numbers to spike.

The announcement from NMR came only one week after the firm had agreed to have its confidential research and readership survey methodology independently audited.

The company's figures had until recently been the only source for agencies to consult when considering the options for buying space.

Although expenditure figures tend to be of the right order and hard to debate, identifying consumers of particular media and compiling circulation figures is a different question. Two of Malaysia's largest newspaper publishers, namely The New Straits Times Press (NSTP) and Nexnews, have been particularly critical of NMR's methodology, claiming it has been flawed.

NSTP owns a stable of English language and Bahasa Malay dailies whilst Nexnews owns a leading independent daily, The Sun, and business weekly The Edge.

NSTP claimed that the readership of their flagship New Straits Times newspaper had actually increased whilst NMR reported the figure had dropped. NMR also claimed their research showed NSTP's broadsheet, Berita Harian, had clocked up double-digit growth, whilst the owner actually claimed figures had dipped since the cover price increased in early 2005.

The company's use of telephone numbers extracted from telephone directories as a means of selecting interviewees for their non-face-to-face interviews was highlighted as inferior to modern computer-aided telephone interviewee selection procedures.

Many of the discrepancies were claimed to have arisen because NMR's selection of interviewees had not adequately reached consumers in compounds, apartments and condominiums. Indeed, when checked by the Industry Committee for Print Audience Research Malaysia (JICPAR) earlier in 2005, the access to these groups was low.

This was of particular concern to the two newspaper companies as some of their publications target higher-income brackets who tend to live in these kinds of accommodations. Hence the firms claim their readers are not as accessible to face-to-face interviews and do not show up in NMR's research.

As a result the newspaper owners demanded a second opinion and commissioned surveys from another international agency, Synovate, which uses a different methodology and produced different results.

Indeed, in July JICPAR even asked NMR, Synovate and a third company called TNS to investigate and propose the best methodology in the face of weaknesses in NMR's methods.

"Both Synovate and TNS have demonstrated that it is possible to reach individuals living in gated communities and condominiums using the telephone," the committee announced in a statement when reporting the results of the scrutiny. "They proposed the mixed mode of face-to-face and telephone data collection methods for urban areas to overcome the limitations."

Synovate provided JICPAR with their results, which apparently showed that using more advanced selection for the telephone interviews resulted in higher numbers for higher income adults and higher readership numbers across the board.

News subsequently came in early September that Synovate would launch its own product called Media Atlas to compete directly with NMR in Malaysia.

"It is our belief that the existence of [the two agencies] will act as a check-and-balance and they will be competitive," said Margaret Lim, Chair of JICPAR. "Methodology that may have worked 30 years ago may not be as effective today."

Lim said JICPAR would continue to work with related parties in seeking the best solutions for an increasingly important industry. Although some mistakes may have come in addressing circulation, there can be few errors with expenditure and the spending has been more than healthy.

The trajectory of growth was steep out of the slump after the 1997 financial crisis. It levelled off after 2000, a year in which advertising expenditure reached RM3bn ($789.5m) on top of 24% growth. With the spending growth back on track, subsequent years have seen more gradual, yet healthy rates of growth: 2001, 2002 and 2003 marked 3%, 9% and 8% respectively, and 2004 showed a 17% annual growth, meaning expenditure crossed the RM4bn mark for the first time to RM4.42bn ($1.16bn).

The growth has been even across all media. In 2000, most spending went on the press (61%) with television a distant second (30%). Other media took relatively little with the highest scorers being radio (3%) and magazines (4%). In all subsequent years to 2004, these numbers deviate little more than 1% from their 2000 share of the market.

NMR's latest figure for 2005 represents quite a slowdown, but a run of major events in next year's calendar are expected to bring the numbers back up.

With a veritable explosion of media, as new TV stations, newspapers, web-based services and new forms of direct marketing flood the market as well, it has never been more important for advertisers to do their homework. A little competition to provide those figures will no doubt be a relief to those with their hands on the purse strings.

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