Violence in Bangkok Will Cost Ad Industry $340 Million

Property and Tourism Sector Hurt the Most, Says Publicis Thailand CEO Mark Ingrouille

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BANGKOK ( -- Thailand has all the fundamentals for great success -- rich land, industrious people, smart and well-educated leaders. But the latest political crisis in Thailand has put the entire economy and the ad industry at risk and forced companies to take on a war zone mentality.

Publicis closed its office last Thursday. To continue operations as much as possible, we set up an emergency office away from the main protest sites and buildings likely to be targeted.

We looked at renting temporary office space through local property agents, but it wasn't working out. We ultimately ended up at a hotel in a safe area, the SD Avenue Hotel on Boromratchachonnanee Road. We chose this location partly because it is close to the homes of a large number of staff.

We managed to get some guys to move our studio equipment during early morning hours when things were quiet. Since the computers were moved in and our IT guys set everything up, we've been able to operate our studio on a rudimentary basis. We are also able to hold some meetings, but we're not asking our people to get to the "office" if there is the slightest risk.

A key problem is that the violence has spread. As the troops have squeezed in upon the protest sites, demonstrators have dispersed around the city in smaller groups. True guerrilla tactics make planning safe journeys for staff appointments impossible. With public transport closed down, serious movement is impossible.

Property and tourism hit hardest
Among our clients, property companies have been hit the hardest. We have a number of large condo developers and basically all marketing for these companies has stopped. But even-fast moving consumer-goods advertisers are hurting, partly because brands are being politicized. For example, if the prime minister drinks a visible brand of mineral water during TV interviews, you can imagine what happens. That brand will be shunned by anti-government protesters.

Mark Ingrouille by a government tank one month ago, when the military first moved in and an end to the crisis seemed near.
Mark Ingrouille by a government tank one month ago, when the military first moved in and an end to the crisis seemed near.
Distribution is another problem. Supermarkets are unable to get deliveries and shoppers are buying in bulk to stock up, so supplies are running out.

With many big malls like Paragon and Central World closed, our luxury clients just can't get their products to people. The only top-end shopping center still open is Emporium in Sukhumvit.

On a personal level, I'm in fear for many of our people. Their gung-ho attitude is not always helping. During the most recent flare-up, we had a number of location shoots underway outside of the capital. They've been carrying on their work, but many are keen to get back into the thick of current events and emotions are running high in the agency -- excitement, fear, sadness, but above all a feeling of impotence as they see their economy torn to shreds.

Stay home, we tell them, and stay safe. (Even at home, life isn't easy. My own currently has no electricity or water.)

Consumer-goods campaigns could return quickly
Thailand's future remains murky and it's impossible to evaluate the full impact of this crisis on our industry, because categories will react differently. Business was already depressed last year, because of the global situation, and now it is certain to sink further because of the recent violence. Much of our work has been put "on hold," never to return, I suspect.

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We predict total marketing and communications spending will be down about 20-23%, or about $340 million, across the entire industry this year. The ability of ad agencies to recover will depend on the make-up of their client list. Spending by fast-moving consumer-good advertisers will return to normal quickly but other areas will take longer, namely the property and tourism sectors such as hotels. Assuming that there is strong bounce-back in the second half of the year, I would expect most agencies to end up 15% down on going-in projections for 2010.

If the crisis ends quickly, the future could be okay. Thailand is a resilient place and Southeast Asia overall enjoys a robust economy right now. So it's possible that everything will bounce back sooner than expected.

Offices remain closed
But that rosy outcome is by no means certain. Thailand has seen political problems before, like the early 1990s. This time, things are different. The current violence is the latest and more virulent phase of a malcontent that has been brewing for five years. The protesters set up camp in Bangkok over two months ago and even before we moved to temporary quarters, our office looked a bit like a refugee camp and clients' offices situated in the middle of the camps have been closed for some time.

Also gone, at least for now, is hope. We work in a business that uses hope as fuel. It's impossible to create great advertising by going through the motions and just getting by. In our business, possibly more than any other, we work with our hearts. Thai creative is famed throughout the world for its humor and a quirky take on life. Sadly, I believe we will be seeing a lot less of both in the future.

Mark Ingrouille is the CEO of Publicis Worldwide, Bangkok as well as the agency's business director, Asia/Pacific. A British national, he has spent 20 years in Asia, including 10 in Thailand, where he lives currently.
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