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MPA: India & China power APAC ad rev, ads in largest medium TV still robust

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MUMBAI: Global media research and consulting firm Media Partners Asia’s findings in "Asia Pacific Advertising Trends" indicate that net advertising revenues in Asia Pacific, measured after discounts across 14 markets, were up by 6.8 per cent in 2016 to reach ~$ 170 billion (€160bn), compared with an 8.5 per cent expansion in 2015.

Ad spend across these markets will increase by a further 6.4 per cent in 2017, and at a 4.9 per cent CAGR between 2017 and 2022, according to MPA forecast. This follows a 7.6 per cent CAGR between 2012 and 2017, Advanced Television reported.

India is on path to become the third largest advertising market across the Asia-Pacific region, after China and Japan to touch $17.1 billion by 2022 from the existing 9.2 billion in 2017, according to the report. India is poised to replace Australia which may touch $13.2 billion by 2022 from $11.8 billion in 2017, added from the report.

MPA executive director Vivek Couto said that future growth was becoming more challenged, as markets mature and working populations stagnate or decline. “This leaves China and India as the main dynamos of advertising growth."

India is likely to become Asia Pacific’s best performing ad market over the next five years, with net ad revenue expanding at a 13.1 per cent CAGR between 2017 and 2022. This will help India overtake Australia to become the region’s third largest ad market by 2022, after China and Japan. Australia will fall to fourth place, while Korea will remain in fifth.

India, forecast to enjoy the fastest growth over the next five years, will see net ad revenue expanding to $17.1 billion by 2022, up from $9.2 billion in 2017. For Australia, another mature market, net ad revenue will rise to $13.2 billion by 2022, from $11.8 billion in 2017. Despite slow growth, Korea will hold onto its position as Asia Pacific’s fifth largest ad market, with net ad revenue touching $9.7 billion by 2022, up from $9.0 billion in 2017.

That momentum will make the Philippines the second-fastest growing ad market after India, among the 14 Asia Pacific markets measured by MPA. Thailand follows as the third quickest, with a 6.8 per cent CAGR forecast for 2017 to 2022. Next is Indonesia, projected to notch up a 6.2 per cent CAGR over the same period.

“Domestic demand is stabilising across key Asian economies, helping boost consumption, which is encouraging for advertising expenditure,” Couto said. “External demand is also improving, as exports reach new highs in a number of markets, but activity may decelerate significantly in 2H 2017. In general, economic growth is slowing down, although among growth markets, China, India, Indonesia and the Philippines remain strong. Among mature markets, Japan is proving to be somewhat resilient and robust.”

Internet advertising continues to grow at a red-hot pace, climbing 20.8 per cent in 2016 across the 14 markets in MPA’s report to reach $66 billion. In 2016, the internet was the biggest medium for advertising in Australia, China, Korea, New Zealand and Taiwan. MPA expects that by 2022, Hong Kong, Japan and Singapore will join their ranks.

Television advertising remains robust in many territories, especially in India, Indonesia, Japan, the Philippines, Thailand and Vietnam. However, net TV ad spend as a whole slightly contracted in 2016, by 0.5 per cent across the 14 markets surveyed by MPA. Free-to-air TV ad revenues are becoming weaker in Australia and Korea among larger markets, and in Hong Kong, Malaysia and Singapore among smaller markets.

Nonetheless, TV will still be the largest ad medium in India, Indonesia, the Philippines, Thailand and Vietnam by 2022. At the same time, the internet will also become the second-largest ad medium in these geographies over the next five years. The biggest swings will take place in Southeast Asia, as mobile and video advertising drive internet ad spends to new heights.

“Consumers are spending more time on mobile, social and online video platforms, driving demand for internet advertising,” Couto notes. “In most places, Google, including YouTube, and Facebook are dominant. In some markets however, especially in India, Japan and Korea, local digital players, as well as key incumbents in TV and print, are beginning to grab a bigger slice of the pie. China, meanwhile, is entirely dominated by a local ecosystem.”

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