Taipei Times: Economists have warned that the protracted presidential election dispute may cause a decrease in domestic consumption and investment. Has the election dispute made consumers hesitant to shop? Would it be accurate to describe it as the same sort of impact as SARS had?
Christopher Fay: I don't have exact weekly statistics from our sister company, Zenith Optimedia, about media spending in Taiwan after what had happened in the past five to six weeks. But the election did slow down retail sales during the weekend of the election. Probably retail sales in the past four weeks or so have been slowed a bit.
But would it be accurate to describe it as a big problem like SARS? My answer is no. To me, it would be inaccurate to suggest that the situation here in Taiwan has slowed consumers' spending so much that started to look like SARS. While the entire nation and people are preoccupied with something, what's important is that there's nothing yet to suggest that interruption brought out by the election disputes is so prolonged and so deep to reach the level of SARS during the first half of 2003.
My general observation therefore is that there's nothing to suggest a dramatic shift in consumer behavior because of recent events. Before these events took place, there was ample evidence of growth in media spending here in Taiwan. So smart marketers are still planning on growth, so long as they are smart.
TT: How strong was the growth in media spending last year?
Fay: Before addressing the spending issue, I want you to know that Saatchi & Saatchi is an ideas company and we consider ourselves to be an ideas consultancy. Therefore our business model does not pay close attention on spending. We are more interested in using ideas to help them build their businesses.
But it's true that advertising spending in Taiwan last year increased from a year earlier. According to statistics provided by Zenith Optimedia, total media spending in Taiwan grew 23.9 percent to NT$65.64 million last year. Advertising spending on terrestrial television grew 8.6 percent last year from the previous year, while that on cable television also increased nicely, up 32.6 percent year-on-year. It is very healthy to see growth in all of the major categories including newspaper, magazine and radio, not just one. It is a sign that what happened last year was more than just post-SARS.
In addition, when you look at actual industry sectors -- computers, apparels, real estate, cigarette, leisure and furniture, among others -- last year, most of them also reported increases in advertising spending. It's not just a major industry leading the way.
These figures tell me that Tai-wan's consumer market is signaling to all the marketers that there's an opportunity, so long as you have innovation to offer that something consumers want. They will reply and they will respond. In 2004, we see continued growth in the media market.
TT: Was that strength in spending solid evidence that the industry will bounce back to pre-2000 levels?
Fay: The increase in spending doesn't mean that we're back to the golden days and everything is OK. But it does suggest everybody has to be more efficient in their pricing and more competitive.
I wouldn't say the resurgence in advertising sales market has returned to the good days of the past, but it indicates a sign of constant improvement and innovation, as well as people's investing in growth.
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