Thai agencies fight for survival in economic slump

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BANGKOK -- Several of Thailand's biggest ad agencies in the first half of 1997 recruited staff in response to an increased workload, only to find themselves cutting salaries and laying off employees in the second half of the year. "Nobody can foresee this year's trend for the advertising industry," says Wichian Lingchongsubongkoj, president of the Advertising Association of Thailand. "There is not any obvious factor for a recovery."

In the first quarter of 1997, total billing reached $420 million, an 11% increase over the same period in 1996. Billings in the second quarter rose by 7.4% but by the third quarter growth slowed to just 1.9%. Although final figures for the fourth quarter are not yet in, the period almost certainly saw negative growth, with Mr. Lingchongsubongkoj noting a dramatic drop in campaign launches.

A major development in the industry in 1997 was the widespread use of agency discounts. Few if any Thai agencies now charge the international professional standard fee of 17.65% of the media budget. "They are killing each other," Vinit Surapongchai, managing director of Damask/ BBDO, says of the price war.

Copyright January 1998, Crain Communications Inc.

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