The two recent Malaysia Airlines incidents have resulted in advertising revenue dropping and magazines closing down.

“Out of respect advertisers have delayed their spending, and hopefully we’ll see an upturn for the year end celebrations,” said Association of Accredited Advertising Agents Malaysia (4As) president Johnny Mun.

 

“The advertisers had cut back their expenditure drastically during the Hari Raya celebrations and even now during Merdeka, in respect of the two air crashes,” he added.

 

The drop in advertising support and other factors has also resulted in The Star’s folding three magazines. Two are Chinese - Shanghai and Red Tomato .

The other is English magazine Faces . A spokesman in The Star confirmed the closing down of the magazines.

There were several reasons like subsidy rationalisation, difficulty in getting bank loans for house buyers, weak retail sentiments and other factors.

Despite closing these magazines, Star Publications (M) Bhd posted a net profit of RM39.38mil for the second quarter ended June 30, which represented a 38 percent jump compared with RM28.54mil a year ago.

 

Meanwhile The Heat , a weekly newsmagazine from the HCK Media stable, may revamp or pull out off the streets if its advertisisng revenue weakens further.

 

The Edge group recently took over the Malaysian Insider , and has closed its FZ.com feature-lifestyle online daily.

 

The disappearance of Malaysia Airlines (MAS) flights MH370 and MH17, despite receiving a lot of attention worldwide and boosting the audience for mass media, have however had an adverse impact on advertising revenue.

 

The other contributing factors, according to Mun, was because of the credit squeeze. Also some corporations held back their launches and promotions.

 

Berita Harian has postponed its annual Anugerah Bintang Popular Berita Harian 2013, which was scheduled to take place in Genting Highlands as a mark of respect for MH370.

 

“The decision is supported by its management and partners, including Media Prima, TV3, Resorts World Genting, sponsors and artistes who are involved in the event,” Berita Harian group editor Mahfar Ali said.

 

Another advertising source said Utusan Melayu’s ad revenue had a 22.5 percent  or RM20.6 million loss in revenue.

 

The International Advertisers Association (IAA) Malaysian chapter Harmandar Singh said: "Like all developing economies, Malaysian advertising expenditure (adex) growth parallels its GDP. Hiccups in spending patterns rarely mirror unfortunate tragedies like what happened to Malaysia Airlines, unlike an economic downturn.

 

“The current bottleneck is temporary, fuelled by cautious sentiment in a process driven industry and symptomatic of a sympathetic stance.

"Other events like protracted decisions on big pitches coupled with digital initiatives more accurately explain the stagnation, which does not factor in digital factors adequately.”

 

Also the Malaysian advertising and media industry has long been handicapped by too few market-driving thinkers making it highly predictable, said the publisher of Adoi and Marketing magazines.

 

The good news is budgets have not disappeared and Adex will burst through the floodgates in the final quarter to meet forecasts, Harmandar predicted.

 

“Current concerns arise because senior analysts do not take reported figures at face value believing they are inflated, based on rate cards. So any dip in spending is an alert for serious correction in reporting.”

 

 Harmandar said: “Don't forget that unlike most markets Malaysia's print Adex has been a dominant player in the share of the pie for decades."