Advertising revenue across Asia Pacific expanded by 6.1 per cent in 2017 to reach ~$173 billion, and is on course to grow by a further 6.2 per cent in 2018 to move close to $184 billion this year (€148.5m), according to a report from Media Partners Asia (MPA).
Asia Pacific Advertising Trends 2018, published today, forecasts net ad spend after commissions and discounts across 14 major markets in the region. The region’s advertising outlook remains positive with MPA analysts forecasting ad gains in almost all markets in 2018, and ad growth across the board over 2017-22. MPA expects net ad spend in APAC to total $226 billion by 2022, having grown by a 5.5 per cent CAGR from 2017.
“Market momentum for Asia Pacific as a whole should hold steady over 2018 and 2019, but we expect a slight deceleration from 2020 as online advertising, increasingly the main engine of growth across the region, settles into a gentler trajectory in some large ad markets,” remarked Vivek Couto, executive director, Media Partners Asia. “Much of digital’s growth will be driven by China, which should retain more than 60 per cent of online advertising in Asia Pacific over our forecast period.”
Couto added: “Traditional TV advertising is now in or on the verge of decline in most countries, having peaked at $54 billion across the region in 2017. That said, India, Indonesia, the Philippines and Thailand are notable exceptions, underscoring the ongoing importance of mass-market broadcast as a platform for reach and awareness in these growth economies. Overall, TV advertising should contract very slightly from 2017 to 2022, at a -0.1 per cent CAGR. Print advertising, however, is on the retreat almost everywhere, although both newspaper and magazine advertising will continue to grow at a modest single-digit pace in India. Out-of-home, meanwhile, remains on an upward trajectory in most markets, benefiting from ongoing urbanization as well as digital upgrades.”
Growth Dynamos In China And India
China’s ad market, by far the largest in Asia Pacific, also experienced the highest growth in 2017 with a 9.9 per cent increase taking net spend past $86 billion, powered by increasingly mobile-centric digital platforms as well as a buoyant economy. MPA projects net advertising in China to expand by a healthy 6.9 per cent CAGR from 2017 to surpass $120 billion by 2022, supported by solid consumer fundamentals and macroeconomic growth. Online platforms dominate with a 56 per cent share of China’s ad market in 2017. This slice should grow to 68 per cent by 2022, an 11.3 per cent CAGR, according to MPA.
Ad growth in India – a contender for Asia’s most dynamic market – was weighed down in 2017 by the lingering effects of demonetization as well as a new goods and services tax, which disrupted advertiser supply chains, inhibiting marketing activity in the process. Net ad spend consequently grew by 6.9 per cent in 2017 to total $9.0 bil., ending three successive years of double-digit growth. Nonetheless, India should re-emerge as APAC’s fastest growing ad market over the next five years. MPA analysts forecast a 10.9 per cent CAGR in net ad spend in India from 2017 to total $15 billion by 2022.
This pace just eclipses the Philippines, Asia’s second-fastest growing major ad market over the next five years with a 10.8 per cent CAGR according to MPA. Thailand’s ad market, showing signs of emerging from a prolonged malaise, is on course to grow by an 8.0 per cent CAGR from 2017-22, making it the region’s third fastest growing ad market over the next five years, with China ranked fourth.
While the overall rate of advertising growth for APAC is slowing, a mixed picture emerges on the ground. Ad spending over 2017-22 should pick up speed compared with 2012-17 in Australia, Hong Kong, Malaysia, the Philippines, Singapore and Thailand. At the same time, cornerstone markets such as India, Indonesia and Japan should be able to sustain the pace they have set over the past five years. Other territories, however, are entering a slower growth cycle. Five markets will see less than a 2.0 per cent CAGR from 2017-22: New Zealand (1.9 per cent), Malaysia (1.8 per cent), Taiwan (1.7 per cent), Korea (1.4 per cent) and Singapore (1.0 per cent).
Internet Trends Become Market Trends
The pattern of ad growth across Asia Pacific is becoming increasingly determined by online media, which will soak up the vast majority of new ad dollars in the region for the foreseeable future. MPA estimates that internet advertising in APAC grew by 18.1 per cent in 2017 to nudge past $76 billion, with a projected 14.4 per cent growth in 2018 taking the total to $87 billion this year. The overall CAGR for internet ad spend between 2017 and 2022 should slow to 11.1 per cent (10.8 per cent ex-China), although the pace of growth from a low base in India, the Philippines and Vietnam should still top 20 per cent. Online ad spend already accounted for more than half the market in Australia (51 per cent) and China (56 per cent) in 2017. Taiwan is forecast to cross the half-way mark in 2019, while New Zealand should follow suit somewhere around 2020.
Online video advertising meanwhile is entering into a red-hot growth phase, powered by the rising prominence of high-speed broadband. MPA forecasts that by 2022, online video platforms will contribute at least 10 per cent of all advertising in nine markets: Australia, China, Hong Kong, Indonesia, Malaysia, New Zealand, Singapore, Taiwan and Vietnam, compared with just one market (Taiwan) in 2017. At the same time, online video spend will be near TV’s share in Australia and China, two big internet markets, over the same time-frame, with Hong Kong and New Zealand not far behind.