Asia will continue to lead the global growth in advertising spend over the next three years but that growth will slow, according to a forecast by media agency Zenith Optimedia.
In its quarterly report, Zenith predicted advertising spend in ‘fast track Asia’, which includes China, India, Indonesia, Malaysia, Pakistan, Philippines, Taiwan, Thailand and Vietnam, will rise by 8.9 pert cent in 2016 and at an annual average of 8.5 per cent until 2018.
But that is down from almost 12 per cent growth witnessed between 2010 and 2015.
“Fast track Asia barely noticed the 2009 downturn… and since then has grown very strongly, ending 2015 up an estimated 9.2 per cent,” the report said.
“However, the Chinese economy, the main engine of growth in Fast-track Asia is finally starting to slow down after years of blistering growth and the ad market is slowing down alongside it.”
China accounts for 74 per cent of all ad spend in the region.
In ‘advanced Asia’, which includes Singapore, South Korea, Hong Kong, Australia and New Zealand, Zenith predicted spend will rise by a “disappointing” 2.8 per cent in 2015 and by 2.2 per cent each year until 2018.
A weak property market in Singapore and the slowdown in China and other emerging markets has hit exports from all markets, it said.
Japan, meanwhile, remains “stuck in a rut of persistent low growth” with forecast ad spend growth of 1.8 per cent a year between 2015 and 2018.
Indonesia, meanwhile, is expected to break into the top 10 spending markets by 2018 at the expense of Canada.
Globally, the advertising market is on course for 4.6 per cent growth in 2016,up from 3.9 per cent in 2015. It will bring total spend to US$579b this year, and is expected to reach more than US$600b by the end of 2017.
Of the new ad dollars expected to be spent between 2015 and 2018 – approximately US$75b – China, despite its slowdown, will contribute 25 per cent, surpasing the US for the first time (24 per cent).
This year’s ad industry will be boosted by the Olympics, UEFA football championships and the US Presidential election which Zenith predicted would generate an additional spend of US$6.1b.
Meanwhile, internet advertising is expected to overtake TV advertising in 2017, a year ahead of previous forecasts.
The report suggests the internet will account for 37.6 per cent of all global advertising by 2018, ahead of TV (34.1 per cent).