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Report: APAC ad market recovery underway

June 14, 2021

Net advertising expenditure in Asia Pacific, calculated after discounts, declined 4.3 per cent Y/Y in 2020, according to the Asia Pacific Advertising Trends 2021 report from Media Partners Asia (MPA).

Pandemic-induced macroeconomic uncertainty softened advertiser demand in H1 2020. As economies rebound, recovery is underway with ad spend forecast to exceed $200 billion by end 2021, topping pre-pandemic levels for the region largely due to China, which will account for 56 per cent of total Asia Pacific advertising expenditure in 2021. Ad markets in Korea and Vietnam will also return to pre-pandemic net ad spend levels by end-2021. Most other countries will follow in 2022, bolstered by the growth of digital advertising; TV advertising will return to pre-pandemic levels in India, Thailand and Vietnam.

The report found digital ad revenue to be most resilient through the pandemic, with consumers across APAC spending more time online and brands accelerating digitalisation efforts. The role of e-commerce in advertising surged in 2020, with e-commerce contributing an estimated 39 per cent of China’s ad revenues, while growing significantly, albeit from a small base, in India, Indonesia, Japan and Korea. Search and social advertising benefited as well. MPA projects digital advertising’s share of net advertising spend to grow from 59 per cent in 2020 to 67 per cent in 2025

TV advertising faced further pressure in 2020 as advertisers accelerated their transition to digital, declining 15 per cent Y/Y to $43.3billion. In mature markets such as Australia and Japan, dips in TV ad spend are expected to be permanent, with a return to pre-pandemic spend unlikely. The medium remains important in key markets where it retains its position as the largest ad segment as of end-2020, including India, Indonesia, the Philippines and Thailand. Overall, TV advertising is expected to rebound in 2021, growing 4.6 per cent Y/Y, before secular decline sets in again in 2023. MPA projects total Asia Pacific TV advertising spend to grow at CAGR of 0.7 per cent over 2020-2025 to reach $44.8 billionin 2025.

TV broadcasters are growing online video ad market share through catch up and dedicated AVoD streaming services, particularly in connected TV markets such as Australia, Japan and Korea. MPA estimates online video advertising, led by YouTube, contributed 16 per cent toAPAC digital ad revenue in 2020. With various local and regional AVoD and freemium platforms, including broadcaster-led platforms driving growth, online video advertising is forecast to grow to $33.3 billionin 2025, representing 20 per cent of the APAC digital ad pie whiletopping 40 per cent in emerging markets such as India and Indonesia.

China was the single largest contributor to advertising expenditure, with 55 per cent share of APAC ad spend. China’s ad spend grew 0.5 per cent Y/Y following strong recovery in H2 2020, led by digital. Digital advertising, accounting for 70 per cent of China’s total ad spend, grew a robust 8 per cent Y/Y, anchored to short video, livestreaming, social, and e-commerce platforms.

Following a 27 per cent plunge in 2020,ad revenue inIndiais forecast to rebound strongly over 2020-25 with a CAGR of 13 per cent. Digital advertising is expected to benefit from India’s expanding digital economyacross online gaming, edtech, food and delivery platforms, outgrowing television to become the largest advertising segment by 2024.

In Korea, ad spend fell 1 per cent in 2020, with a 9 per cent decline in television advertising bolstered by 12 per cent growth in digital advertising, led by mobile, display and search ads. The Korean advertising market is forecast to grow at 6 per cent CAGR over 2020-25. TV has bounced back strongly in Q1 2021 and digital advertising, including video, continues to maintain double digit growth levels.

In large mature markets Japan and Australia, ad spend is projected to grow by 2 per cent over 2020-25, led by digital.TV remains scalable in both markets with metropolitan FTA reach and engagement ensuring robust levels of share. Video’s share of digital advertising is growing in both markets with global tech majors dominant though broadcasters are growing rapidly from low base through dedicated streaming platforms.

In Southeast Asia, ad markets across Indonesia, Philippines, Thailand and Vietnam are recovering rapidly with TV & online benefiting.Indonesia remains Southeast Asia’s largest advertising market and is projected to grow at 4 per cent CAGR over 2020-25, powered by digital (including video) and free TV.

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