APAC ad spend growth will increase by +7.1 per cent in 2019, to reach $177 billion, according to MAGNA’s forecast. Growth will only slightly slower than 2018’s +7.7 per cent growth rate, but higher than prior expectations (+6.0 per cent in June 2018). APAC is the second largest global region, behind North America, and due to its faster advertising spending growth than EMEA, it will slowly increase its lead in overall advertising spending throughout MAGNA’s forecast period, from its current 30 per cent share of total global advertising.
Spend in APAC is concentrated as almost two thirds of total ad spend occurs in China (42 per cent of total spend) and Japan (23 per cent). However the fastest-growing markets in 2019 will be in the Indian sub-continent: Sri Lanka (+17 per cent), India (+15 per cent), and Pakistan (+14 per cent). On the other end of the spectrum, Singapore (+1 per cent), Malaysia (+1 per cent) and New Zealand (+2 per cent) will show little or no growth in 2019.
Growth in APAC is led by digital advertising formats, which will increase by +16 per cent in 2019 to reach $81 billion, representing 46 per cent of total ad sales. Within digital advertising, mobile formats are significantly outperforming desktop formats (+26 per cent mobile spending growth expected in 2019, compared to -4 per cent desktop spending growth). By spending format, search advertising remains the lion’s share of digital advertising, and will grow by +14 per cent in 2019 to reach $41bn, half of total digital advertising spending. Social advertising is growing the fastest of all digital formats, and will increase by +27 per cent in 2019 to reach $15 billion, representing nearly 20 per cent of total advertiser budgets. Video is also showing robust growth, and will increase by +25 per cent to reach $14 billion, nearly 17 per cent of total budgets. Like many regions, static display advertising is struggling, and will be flat in 2019; spending on static display formats will start to decline and those declines will accelerate going forward as brands lean towards other more dynamic advertising formats within digital media.
Television advertising sales will grow by +2 per cent in 2019 to reach $60 billion, 34 per cent of total APAC ad spend. This is in line with 2018’s +2.3 per cent growth performance, outperforming global television performance (-2 per cent), partly because APAC markets are less affected than other region by cyclical events. Spending growth is driven by pricing – CPM cost increases in the high single digit percentages – as demand remains robust while viewing declines albeit at variable rates; India’s TV viewing continued to increase this year, compared to Australian broadcast television viewing declines approaching -10 per cent.
Print advertising continues its rapid decline, with newspapers ad revenues shrinking by -7 per cent in 2019, and magazines shrinking by -9 per cent. Together, print ad sales will represent less than 9 per cent of total advertiser budgets, and will continue to shrink going forward. Radio is stable, and will increase by +2.7 per cent in 2019, following 2018’s +2.3 per cent growth rate. Out of home advertising will increase by +5 per cent to reach $15 billion, and will match the market share of print for first time. Out of home growth is fueled by digital OOH formats, which will increase by +15 per cent in APAC in 2019 to reach $3 billion, representing 20 per cent of total out of home spending.
APAC is the region least affected by classic global sports events (Olympics, FIFA World Cup) and even though South Korea hosted the Winter Olympics in February 2018, it did not drive significant advertising growth in that market. National or regional events can be more significant drivers. The most significant in 2018 were perhaps the Commonwealth Games in Australia and the general elections in Taiwan in 2018. In 2019, MAGNA expects several event to generate special advertising activity: general elections in India, Philippines, Thailand, and Indonesia (although, in the case of Indonesia, elections may prove detrimental to overall ad spend). Finally the ICC Cricket World Cup in June and July 2019, may be a significant driver for television and other media in Australia, New Zealand the entire Indian sub-continent.
Leigh Terry, CEO IPG Mediabrands APAC said, “Digital spend continues to thrive and fuel positive advertising growth across the Asia Pacific region, which is set to increase by a further 16 per cent in 2019. While almost two thirds spend come from China and Japan, the fastest-growing markets in 2019 will be in the Indian sub-continent with Sri Lanka, India, and Pakistan enjoying double digit growth. The markets in APAC are wildly different, in terms of both maturity and advertising intensity. This varies from Australia on the upper end, with nearly $500 per capita of advertising spending per year, to India on the low end with just $8 of advertising spend per capita per year.”
Gurpreet Singh, Managing Director MAGNA APAC said, “The battle for share of ad spend continues between TV and digital across most of the APAC markets. There is a clear movement towards digital across the spectrum, including most of the TV dominant markets. While TV growth is low to negative in the vast majority of markets except South Asia. This is mainly due to TV losing audience and consumption which is continuously increasing for digital. TV is not only losing audience to digital but also to non-linear TV which sits right at the cusp of TV & digital – it will be interesting to watch this space as it develops for advertising in APAC.”