PETALING JAYA: Budget 2022, which aims to boost the economy and the livelihood of the rakyat after being battered by the Covid-19, is set to spur the advertising and marketing industry which like other industries have not been spared by the pandemic.

       Magna, the centralised IPG Mediabrands resource for intelligence, investment and innovation strategies, is anticipating advertising expenditure (adex) to grow by 4.5% and with a market size of about RM5.33bil in advertising spends by next year.

       With a gross domestic product (GDP) projected at between 5.5% and 6.5% in 2022, it spells good news for the industry as stronger economic growth would fuel consumption leading to higher ad spends.

       Mediabrands Malaysia CEO Bala Pomaleh told StarBiz that the expansionary budget with a significantly higher development expenditure of RM76bil and a lower Covid-19 fund allocation, among others, is a boon to the industry.

       The economic growth would also be anchored by public investments and private consumption which is up about 2.5% from 2021.

       These factors would have a direct correlation to advertising spends as it would spur local consumption, drive sales and domestic and international trade, and improve business sentiment overall, he said.

       Another observed trend to note is that election years typically garner higher spends, thus spending in 2022 is anticipated to rebound higher as it could potentially be an election year, he added.

       Commenting on the Budget 2022 measures that would facilitate the growth of the ad and marketing industry, Bala said: “The measures to develop and maintain infrastructure via a RM3.53bil allocation and RM200mil for the creation of the Infrastructure Facilitation Fund 3.0 to further boost high-impact infrastructure development activities through public-private partnerships, alongside encouraging home ownership through RM1.5bil for building quality housing for low-income groups, will lead to positive spends.

       “This is because developers will look to increase spends and reach the target consumers which bodes well for the industry (ad and marketing industry). “

       He said the allocation of funds to support the tourism sector and the opening up of the sector would provide a multitude of opportunities.

       These include more foreign and domestic tourists, multi-city campaign promotions and brand collaborations and live events being reignited.

       A total of RM1.6bil has been allocated for the tourism industry under Budget 2022.

       Bala added that allocations under the budget for the creative and entertainment sector would reinvigorate the sector and this would also benefit the ad agencies.

       “Agencies will once again work collaboratively with the sector across brand activation, launches, events and film projects, “ he said.

       Entropia founder and senior partner Prashant Kumar (pic below) said one of the measures under Budget 2022 that’s bound to have major long-term impact is the commitment to build 5G infra rapidly.

       “It’s expected to help businesses remain highly competitive in the new economy, create new jobs and give birth to tonnes of new businesses which will ensure better tailwind for advertising and marketing in due course,” he said.

       Bala said the focus on technology, digitalisation and research and development activities under the budget is anticipated to see more brands, including small and medium enterprises, willing to thrust into these new digital worlds.

       Prashant said besides the measures in the budget, Malaysia desperately needs a strong decisive plan to boost economic momentum which would also bolster the ad and marketing industry.

       “It needs a bold economic vision with bipartisan political support, that is designed to leverage the mega trends that are changing our world – US-China decoupling and supply chain resilience imperatives, Industrial Revolution 4.0 technologies and applications and healthcare among other things.

       “We need a few big ideas for our economy and focus to build critical mass there. Malaysia has all the fundamental makings to ratchet up its growth.

       “It needs to discover some key themes it can credibly extrapolate from its current strengths and focus its otherwise constrained resources towards them.

       “We need economic think tanks underpinned by society consensus to make the momentum. All these would also spur the ad industry to a higher level,” he said.

       Tan Kien Eng(pic below) , chief executive officer, dentsu Malaysia, however felt that although Budget 2022 is good for the industry, there are measures that should have been included in the budget to give an additional boost.He felt that grants should be clearly stated to fuel the growth of the multimedia creative industry to drive a high-income economy.

       He said there is some emphasis on the digital economy, digital infrastructure, e-commerce and digital marketing.

       “But let’s not forget about the importance of branding to create Malaysian brands that could compete locally and internationally, he pointed out.

       “The government should also look into facilitating the adoption of technology to drive quality and efficiency of production, especially in the metaverse and gaming.

       “Look into benefits for foreign investment in the creative economy to retain talents here in Malaysia instead of losing them to other countries.

       “The removal of the sales and service tax (SST) is a key consideration as this tax is eating into a constrained ad budget which will otherwise be used to increase placement, frequency and quality of production.

       “The additional savings from the SST could have been ploughed back to benefit the advertising media and marketing ecosystem,” Tan added.