KUALA LUMPUR: Media industry's advertising expenditure (adex) is expected to improve in the second quarter (Q2) of 2022 as businesses return to operating at optimal levels, Kenanga Research said.
This will also be supported by the strong domestic demand which would encourage more advertising activities.
"Moving forward, as the nation transitions into the endemic stage in Q2 2022, we expect adex to continue its upward trajectory as precedents have shown that the reopening of the economy normally bumps up adex," Kenanga Research said in a report today.
Kenanga Research said media players like Media Prima Bhd and Astro Malaysia Holdings Bhd would most likely benefit.
"Media Prima's Omnia segment provides a convenient advertising platform across all media platforms whereas Astro's newly-launched addressable advertising solutions allows advertisers to specifically target their audience," it said.
Based on the data gathered by Nielsen, Kenanga Research said Q1 2022 adex rose by 14 per cent from RM1.3 billion in Q1 2021 to RM1.5 billion thanks to the reopening of more business activities in 2022 compared to 2021 where lockdowns were enforced throughout the year.
It said excluding digital adex, year-on-year (Y-o-Y) total adex would have only risen by 11 per cent.
On the other hand, newspapers continued its downward trajectory, declining by 6.0 per cent and falling by three percentage points Y-o-Y in terms of its share of total adex.
The market share decline in newspapers was offset by the rise in digital share, it said.
Kenanga Research has maintained its "Overweight" call on the media industry.