2016 was a tough year for most Malaysian businesses, and a very difficult one for media companies in particular. Advertising is one of the first expenses to be cut when companies are looking to reduce expenses, and this year has seen a lot of businesses cutting costs.
There is plenty of evidence to support the theory that advertising when other companies are cutting their media budgets makes good sense and can be more effective, but if you have limited resources and revenues are going down, it’s a tough decision to make.
Most of our regular advertisers told us they were reducing advertising spend in 2016 and probably 2017. Fortunately there were a few exceptions but not a lot and we were grateful that our two most successful websites, ExpatGo.com and EatDrink.my, attracted more advertising this year as more companies expand advertising to include digital marketing.
The government also made major cuts in advertising expenditures. Tourism Malaysia, who always have one of the biggest advertising budgets, advised us they were putting their contract with us on hold.We are even having trouble getting paid for the adverts they already placed and were recently advised this is a worldwide problem, not just in Malaysia. It’s not known if any of this was linked to the investigations into Tourism Malaysia’s advertising department, announced by the Malaysian Anti-Corruption Commission a few months ago.
Despite the economy still growing at above 4%, there are plenty of other indications that things are not going that well on the ground. The Prime Minister recently announced that since the beginning of this year, over 6,000 people have been laid off by government linked companies. Many other people are finding it harder to find employment, including an estimated 200,000 graduates.
It seems evident the government is having money problems, and the recent decision to open the doors to mainland China was clearly aimed at obtaining critically required funds. The substantial deals struck during the Prime Minister’s visit to China have been the subject of some criticism, because of the potential for increased dependency on that country, but they should at least provide a much-needed stimulus to the economy as well as funds to the government.
Now that Trump has won the U.S. presidency, it’s hard to predict what the impact will be on Malaysia and the rest of the world in 2017. One thing is certain and that is there are lot of nervous people around the world.With the hard-line position he took on a number of issues – including climate change, free trade, immigration, and China, there is definitely cause for concern. How much of his campaign rhetoric will translate into action is another issue.
So we are approaching a period of continued uncertainty. The 1MDB mess refuses to go away, and Singapore is now actively prosecuting people for their involvement in illegal transactions linked to the company and the elusive Jho Low. The investigations in the U.S. and Switzerland are moving forward, as well.
However, in Malaysia, things seem to be progressing at a much slower pace, and it is clear the government would like all discussion on 1MDB to end. Recently, they started distributing booklets to students in Malaysia and even Malaysian students in Australia setting out their position on this controversial issue.
I hope you enjoyed your year-end holidays. It looks like next year will be another interesting one.
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