Advertising revenue across Asia Pacific expanded by 6.3 per cent in 2018 to top $180 billion, and is on course to grow by a further 6.2 per cent in 2019 to move close to $195 billion in revenue, according to a report from Media Partners Asia (MPA).
Asia Pacific Advertising Trends 2019 forecasts net ad spend after commissions and discounts for different media across 14 major markets. The outlook across Asia Pacific remains positive with MPA analysts forecasting ad gains in almost all markets this year, with ad growth across the board over 2018-23. MPA expects net ad spend in APAC to total $235 billion by 2023, representing a 5.4 per cent CAGR from 2018.
Commenting on the findings of the report, MPA executive director Vivek Couto said: “The general outlook remains positive, buoyed by steady growth across almost all markets over 2019 and 2020. In addition, elections in India, Indonesia, Philippines and Thailand will further boost ad prospects this year, while India will also benefit from marquee cricket. In India, TV remains an advertising mainstay, even as affordable high-speed broadband and a strong start-up economy powers internet advertising in tandem, especially online video. China’s ad market slowed from 10.3 per cent growth in 2017 to 7.8 per cent in 2018 amidst macro issues, a clean-up in online advertising and an ongoing downward trajectory in TV. Nonetheless, the future for China’s ad market remains reasonably robust, with an estimated 10 per cent CAGR for online advertising over 2018-23 fueling overall growth.
“TV advertising meanwhile remains important but is under pressure from online video and near-term macro headwinds, especially in Australia, Indonesia, Japan, Korea and Thailand. TV advertising across Asia Pacific contracted by 1.9 per cent in 2018 and will be down by 1.4 per cent in 2019, according to MPA forecasts. At the same time, broadcasters in a number of markets – most notably Australia, Hong Kong, India, Japan and Korea – are gaining share in online video advertising with their own branded AVOD platforms. Shifting dynamics in TV and online are likely to force more consolidation and M&A in Indonesia, Korea and Thailand in particular, as well as other markets in Southeast Asia.”
MPA’s new report shows that the Philippines will experience the fastest ad growth in APAC this year, with net ad spend expanding by 15.2 per cent on the back of elections and digital growth. India is next, with 11.8 per cent projected ad growth this year, followed by Vietnam (8.8 per cent), China and Indonesia (7.6 per cent each), and Thailand (5.3 per cent). In terms of ad growth over 2018-23, the region’s key markets are: India (a 10.7 per cent CAGR), Vietnam (8.8 per cent), the Philippines (7.5 per cent) and Indonesia (5.6 per cent). In Japan and Australia, both large and mature markets, ad spend is projected to grow by 2.4 per cent and 4.3 per cent respectively over 2018-23, driven by digital.
Despite a marked slowdown, China will remain APAC’s biggest dynamo of advertising growth, accounting for 65 per cent of new ad dollars in the region between 2018 and 2023. The second-largest contributor of incremental spend will be India (11 per cent over 2018-23), followed by Japan (10 per cent) and Australia (5 per cent). In terms of market size, India is on course to overtake Korea in 2019 and Australia by 2023, rising up the ranks to become Asia Pacific’s third-largest ad market behind China and Japan.
Digital Advertising & Online Video
Online advertising remains a major motor of growth, expanding by 16 per cent across Asia Pacific in 2018 to top $85 billion. MPA projects online ad spend in APAC to climb a further 13.5 per cent this year to reach ~$97 billion, supporting an estimated 10.2 per cent CAGR between 2018-23. China remains the region’s largest digital ad market by far, generating ~$55 billion in online ad revenue in 2018. Japan was second with $13 billion in online ad revenue in 2018, followed by Korea ($3.7 billion) and India ($1.9 billion).
In China, tighter regulations around online advertising reined in digital ad growth in 2H 2018. Nonetheless, China’s online ad market, led by Alibaba, Baidu, Tencent and ByteDance, will still grow at a 14.4 per cent CAGR over 2018-23, according to MPA. Mobile remains the largest contributor, driven by in-feed advertising in popular apps such as WeChat.
By 2023, internet advertising will account for 70 per cent of net ad spend in China. Over the same time-frame, digital’s share of ad spend will be in the 50-70 per cent range in Australia, Taiwan and Malaysia, between 40-50 per cent in Hong Kong, Japan, Korea, Singapore and Vietnam, and around 30-40 per cent in India, Indonesia and Thailand. India remains one of the region’s most scalable markets for digital advertising, on track to generate $5.1 billion in online ad revenue by 2023.
Online video advertising, mostly dominated by YouTube ex-China, grew 29 per cent across Asia Pacific in 2018 to reach ~$12.4 billion, 15 per cent of all online advertising. Online video’s share of the digital ad pie is expected to grow to 20 per cent across APAC by 2023, representing $27 billion in spend. The largest markets for online video advertising in APAC over the next five years will be China, Japan, and Australia, with India following close behind in fourth place.