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Asia PAC advertising to grow 5% in 2014, 5.7% in 2015, 4.5%CAGR for 2014-19: MPA study

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MUMBAI: A new report published by Media Partners Asia (MPA) indicates that net advertising revenues, measured after discounts across 14 markets, will grow at 5.0 per cent this year to top US$121 billion. Next year, MPA projects a re-acceleration in growth with the advertising market to expand at 5.7 per cent. Between 2014 and 2019, MPA forecasts indicate that net advertising in Asia will climb at an average annual growth rate of 4.5 per cent.

Commenting on the findings of the report, entitled Asia Pacific Advertising Trends & Database 2014 – 15, MPA executive director Vivek Couto said: “The macro landscape is uneven and there are headwinds to economic growth across Asia Pacific. Encouragingly, governments and policymakers across the region have implemented reforms to address structural issues and this trend is likely to accelerate in markets where positive political change has occurred. Ad spends from large multinational advertisers softened through much of 2014, partially offset by spends from domestic advertisers but this has dampened growth across Southeast Asia and other key markets. Multinational advertising demand may return but weakness across global emerging and developed ad markets may exert downward pressure on Asia.”             

Key highlights from the report include:  

o    Southeast Asia rebound. Contraction in advertising across Malaysia, Singapore and Thailand, partially offset by robust though slower growth in Indonesia, Philippines and Vietnam, means that net advertising revenues will grow at only 1.2 per cent in Southeast Asia in 2014, the lowest in five years. A rebound is expected in 2015 with 7.2 per cent growth.

o    Market rankings. China will overtake Japan as Asia’s largest advertising market by 2016 while India will overtake Korea in 2017. By 2019, the six largest ad markets in Asia will be China; Japan; Australia; India; Korea and Indonesia.              

o    TV. TV’s share of the advertising market peaked in 2011 at 42.9 per cent and while still resilient, market share has been edging downwards, reaching 41.6 per cent in 2014 with MPA projecting 40.7 per cent share by 2019. In mature markets, TV will remain a growth media in Hong Kong and to a smaller extent, Australia but the future will be more challenging in Japan and Singapore. In Korea, terrestrial TV also faces a challenging future. In growth markets, TV’s best performers, from a relatively high base, will be Indonesia, India, Philippines, Thailand and Vietnam.

o    Digital. Total digital advertising revenue (including search, display and mobile) is expected to climb at a CAGR of 11.1 per cent over 2014-19 with aggregate market share growing from 23 per cent in 2014 to 31 per cent by 2019. Digital has overtaken TV to be the largest media in terms of advertising on Australia; by 2019, it will also be the largest media by advertising in China, Korea and New Zealand. In more developing online markets such as India, Indonesia, Malaysia and Thailand, digital will have a 10-20 per cent advertising market share by 2019 versus 6-8 per cent in 2014. Mobile advertising will become increasingly significant in China, Japan, Korea and Taiwan while the online video ad pie will continue to expand in China, Japan, Korea and Taiwan and grow rapidly from a low base in markets such as India.   

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