Crystal balls come with their hazard warnings. Trying to divine a ballsy gaze at the crystal ball squares that hazard.
Yet, let me take a shot.
1. Media giants – RTM, Media Prima, Astro, Star – they will spend the year exorcising the ghosts of the past, and recasting themselves anew to take on the future.
A future that has been no less than brutal on them in the recent past. Thousands will lose their livelihoods and the gloom and doom in many ways will continue at least in the first half of the year.
The big disruption that had been talked about since the Dotcom era is finally at our doors.
The silver lining is Netflix seems to be under a severe cash haemorrhage. And the move by Disney to go its own OTT way next year (hopefully followed by many others ultimately), suddenly the Netflix/Amazon Prime model is under some sort of existential threat.
How it pans out, will ultimately have positive repercussions locally – for Tonton, Dimsum and Astro Go.
Having said that, the local counterpart of FAANG (Facebook, Apple, Amazon, Netflix, Google), which in Malaysia we could replace with FLIGG (Facebook, Lazada, iflix, Grab, Google) will continue to grow unabated, eating into the traditional media pie.
2. Ad agencies are going to witness nothing short of a bloodbath. Half a dozen global creative networks will shut down, merge or sell out – including the most venerated of names on the door.
Media agencies will see a severe squeeze on their margins, with falling client billings, decline of traditional media revenues and greater call for accountability.
Again, at least 20-30% of traditional creative and media jobs will be redundant.
3. The economy will continue to be in stall mode. Malaysia needs a bold new economic vision, but it may be at least into second half of next year by the time the shape of that emerges, and the resulting focus and optimism hits consumer sentiments.
So do not expect any quick relief there. However, it would seem that we are already at the bottom of the big fiscal trough, so it can only get better. But not too soon.
However, marketing companies that…
1. Stay obsessed and vested with local customers, innovating to capture the emerging Malay segments (we found three new segments in our latest study)….
2. Continue to balance their investments in off-line and online media, not getting too carried away by the hype, yet not losing sight of first generation digitals….
3. Continue to build their brands via insightful and focused creativity….
4. Continue to invest bold but smart…
will win in the marketplace!
Cost savings via agency squeeze has bottomed out pretty much this year for most clients.
In the last few years, it has caused a huge brain drain from the country resulting in lower quality of work, which in turn results in worse performance by marketing depts, in turn resulting in lower marketing budgets and diminishing the role marketing as a pivotal function.
In-housing in many cases has resulted in marketing doing more agency work, and less focused on core marketing functions like customer-centric product, packaging and pricing innovations.
Am hoping against hope that this circle will turn around in 2019.
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