Local ad market shifting to digital media, traditional media getting marginalised

Digital media, led by social media platforms, is grabbing stakes in the country's advertisement market over the past several years, gradually taking away shares of the conventional media, market insiders said.

Social media platforms like Facebook, Google, YouTube, and Netflix are now enjoying around one-third of the country's advertising market worth around Tk 40 billion annually, while the traditional media like local television channels, newspapers and online media outlets are getting squeezed with the remaining, they said.

The market share of social media platforms has been growing consistently by 15-20 per cent annually over the past five years since the COVID-19 pandemic in early 2020, Managing Director of Asiatic Mindshare Ltd Morshed Alam told The Financial Express.

While local television channels are losing around 2-3 per cent share annually over the past several years and the newspaper and online media outlets are losing around 10 per cent annually from the advertisement market, he said, citing the findings of a study.

Although the shift towards digital media has been evident in recent years, television advertising still dominates the market with almost 50 per cent of the advertising spending, industry sources said.

While most of the leading multinational companies and local conglomerates partner with agencies for their needs at the end of advertising and communications, industry estimates reveal that 36 per cent of spending is directly managed by companies' in-house advertisers.

According to Statista Market Insights, a leading firm to monitor advertisement traffic across the globe, spending in the advertising market in Bangladesh is expected to reach US$669.10 million in 2025.

In Bangladesh's advertising market, 78 per cent of total ad spending is projected to come from digital sources by 2029, it projected.

Bangladesh's advertising market is experiencing a shift towards digital platforms, with a growing demand for targeted online campaigns to reach tech-savvy consumers, the projection maintained.

The consistent dominance of social media platforms in the country's advertisement market is allegedly squeezing the government's earnings as taxes and value added tax (VAT) from this sector due to a lack of sufficient monitoring over the operations and earnings of social media platforms in the country.

Earnings of the country's content creators for social media is also much less than the content creators of developed countries and it is around one-third compared to content creators of even the neighbouring India due to absence of any offices of the social media institutions, he said.

Local content creators don't have any edge over hiking their payments from the social media platforms as they cannot negotiate it due to absence of their offices in Bangladesh.

The advertising and communications industry in Bangladesh is represented by hundreds of agencies, ranging from small boutique agencies to globally affiliated companies, offering a diverse spectrum of services.

They usually provide advertisements to social media on client's demands and they have to make payments to the social media platforms in foreign currencies although they receive money from the advertisers in local currencies, they said.

None of the social media companies have offices in Bangladesh. They are operating businesses in Bangladesh from overseas offices and bagging foreign currency from the country without making any investment, it has been alleged.

"If the social media platforms had offices in Bangladesh, the government could fetch a significant amount of revenue from them," said Mr Alam.

It could reduce costs of advertisements and benefit the local content creators a lot, he added.

Social media platforms have opened in many countries across the globe including in neighbouring India, Mr Alam added.

Audience in social media platforms is increasing rapidly with the growth of internet penetration and posting any advertisement in social media is getting popular as they entertain advertisements of various amounts ranging as low as US$50, he said.

Advertisers are being attracted to provide advertisements to social media platforms increasingly as they can reach their targeted audiences easily with such platforms, managing director of Adcomm Ltd Nazim Farhan Choudhury told The Financial Express.

They also can see their viewers or audience and interact with them, if necessary, through the help of social media platforms, he said, pointing to the advantages of such platforms.

On the contrary, unavailability of reliable data over television viewers and newspaper circulations is impeding the advertisement prospects in such traditional media outlets, he said.

He stressed the need for government support to develop a mechanism to help the industry obtain accurate data regarding television viewership and newspaper circulation and readership.

Establishing an audit bureau of circulations and introducing a subscription model for television channels is required to ensure a sound growth of potential media outlets, Mr Chowdhury added.

Lately though, many of the country's television channels and newspapers are currently displaying their output in social media platforms to get benefit out of the shift in the advertisement industry, he said.

Those who will be able to enter into the social media platforms efficiently, to be benefited more, said the Adcomm top brass.

Local television industry suffers as they only rely on advertisements, but globally, advertisement is only a part of their revenue streams, and they enjoy the benefits of subscriptions, he said, stressing the need for introducing subscriptions of television channels.

Even some Indian channels charge subscription fees from the Bangladesh market, whereas local channels are being deprived, he lamented.

"I think Bangladesh is not such a big market to feed some 40 television channels with advertisements and let them survive," said director for marketing and sales of Channel i Ebne Hasan Khan.

"We are losing our footprints in the advertisement market day by day with the engulfment of social media platforms," he lamented.

The government should bring the businesses of social media platforms under a stringent policy, which will not only streamline the sector but also ramp up government revenue, said Mr Hasan.

Bangladesh's film sector is also being affected due to the foray of the social media platforms, he said.

Although the country's film industry has a very golden history and existence only three films - Eti Tomar E Dhaka, Komola Rocket and Pipra Bidya - got Net Flix's listing, he bemoaned.

"To get listed with NetFlix we had to work hard and pay an Indian agent a significant portion of money," he said.

If NetFlix has an office in Bangladesh, global audiences could see an increased number of Bangladeshi films, he said.

Newspaper readership is on decline since early 2020 with the COVID-19 pandemic, head of advertising and marketing of a leading newspaper told The Financial Express.

Newspaper circulation never got back to pre-COVID level, he said, adding, most of the readers currently read newspapers online.

Private sector's advertisement is on decline, he added.

To ensure survival, the newspaper industry must go digital by efficiently utilising social media platforms, the official said, requesting anonymity.

Sources said GroupM, a leading global media investment management company, operates in Bangladesh as a part of Asiatic 3Sixty, Mediacom Ltd, Adcomm Ltd, Starcom Bangladesh, and Top of Mind are the leading advertising and communications firms in Bangladesh.

Azizjst@yahoo.com