Kenanga Investment Bank said advertisement spending is expected to shrink 9.5% this year to RM4.24 billion with broad-based declines across free-to-air television, newspapers, magazines, radio, cinema, and digital advertising.
In contrast, adex tumbled 22% to RM4.74 billion in 2025, reflecting broad weakness led by free TV that dropped 19% while newspaper ad spending was 12% lower.
“Despite the projected decline, we expect a milder contraction, supported by a low base effect and an uptick in marketing activity around major 2026 sporting events, including Sukma Selangor, FIFA World Cup, and Winter Olympics,” the research house said in a report.
Digital adex plunged 39% last year largely due to a sustained pullback in advertising spend on youtube.com, which posted nine consecutive quarters of decline amid intensifying competition from social media, search engine and live commerce platforms.
It noted that brands are now shifting their ad spending to online and social media while legacy media firms grapple with costly legacy infrastructure such as broadcast towers, satellite transponder leases, printing facilities, and physical distribution networks.
Kenanga maintained its “underweight” call on the sector even as legacy media players continue to face structural adex share losses amid persistent cost pressures.
It said that for Media Prima Bhd and Astro Malaysia Holdings Bhd, building and monetising proprietary intellectual properties (IP) should be prioritised as traditional distribution-driven revenue models continue to weaken.
While domestic film and TV productions have shown encouraging traction supported by strong box-office performances, Kenanga noted IP monetisation remains at an early stage, contributing only a small portion of overall group revenue.
“We believe a sizeable and well-curated library of local IP could emerge as a key revenue anchor for Malaysian media companies, particularly as adex for traditional media continues to structurally decline,” it added.
Astro has been particularly hard hit as its share price has plunged nearly 57% over the past one year to 9.5 sen currently, valuing the company at RM472 million.
Media Prima fared slightly better with its share price falling 39% over the past year to 28 sen currently, valuing it at RM316 million.
Star Media Group Bhd’s shares have fallen 16% to 34 sen in the past one year, giving it a market capitalisation of RM244 million.