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A report from industry analysts Media Partners Asia (MPA) indicates that net advertising revenue in Asia Pacific, measured after discounts across 14 markets, grew by 5.3 per cent in 2015, the slowest rate of growth since 2009. MPA projects an increase to 5.8 per cent growth in 2016 and a CAGR of 5.5 per cent for 2015-20, reflecting stable but more moderate economic growth across both mature and emerging markets.
In 2015, the fastest growing advertising markets were: India (+10.8 per cent), China (+8.5 per cent) and Vietnam (+8.1 per cent). Ad expenditure growth continued to slow in Indonesia, and contracted in Singapore, Malaysia and Hong Kong. Overall, ad spend in Southeast Asia grew by only 1.5 per cent in 2015 as multinational advertisers tightly managed budgets. Spending from domestic brands also softened. The Australian advertising market partially recovered to 2.8 per cent growth in 2015; a more sustained expansion is expected in 2016. Japan’s ad market grew at a reasonable rate of 2.8 per cent in 2015.
MPA forecasts indicate that fastest growing markets over the next five years in Asia Pacific will be: India (+10.7 per cent); China (+8.4 per cent); Indonesia (+8.2 per cent); the Philippines (+7.7 per cent); and Vietnam (+7.3 per cent). China will build on its position as the region’s largest ad market, having overtaken Japan in 2012. By 2020, China’s net advertising revenues will total more than $85 billion. Japan will remain the region’s second-largest ad market, followed by Australia; India; Korea ; and Indonesia.
Digital’s share of the advertising market in Asia Pacific is projected to overtake that of TV by 2017 and grow to 44.2 per cent by 2020, up from 30.7 per cent in 2015. The biggest drivers will be Australia, China, Korea, Japan and Taiwan, although the rapidly growing India and Indonesia will also contribute.
TV remains a critical ad medium but its regional ad share will decline, as ad spends in Australia and China shift to digital. By 2020, TV will continue to be the biggest ad medium in key markets such as India, Japan and Korea.
In Southeast Asia, TV will incrementally grow its share of advertising from 54.0 per cent in 2015 to 54.9 per cent by 2020, driven by the launch of DTT in the Philippines and Thailand and a rebound in free-to-air TV demand across Indonesia. In Asia Pacific, on average, MPA projects that TV’s share of total advertising will decline from 36.5 per cent in 2015 to 30.7 per cent by 2020.