Carat has lowered its growth forecast for the advertising market in Asia Pacific this year from 5.2 per cent to 4.1 per cent due to nervousness over the economic slowdown in China.
Carat has lowered its growth forecast for the advertising market in Asia Pacific this year from 5.2 per cent to 4.1 per cent due to nervousness over the economic slowdown in China.
Half of the 14 APAC markets measured by Carat have been downgraded since the media agency’s previous report in March, with China-dependent territories Hong Kong, Taiwan, Indonesia and Malaysia all seeing downwards growth revisions.
China itself is to grow by six per cent this year, not by 7.9 per cent predicted by Carat in March.
APAC markets forecast to grow double digitally this year are India – the region’s star performer in terms of growth prospects – at 11.0 per cent, the Philippines (10.2 per cent) and Vietnam (11.3 per cent).
Australia is to return to positive growth for the first time after four years of a “stalled” advertising market. Carat has revised Australia’s growth forecast from one per cent to 2.4 per cent.
Nick Waters, CEO of Dentsu Aegis Network Asia Pacific, commented: “Asia Pacific’s predicted growth has been strong in past years but with China’s economic deceleration and the devaluation of currency we see the impact on the region’s 2015 growth prediction revised from 5.2 per cent to 4.1 per cent. Digital media spend in China is expected to maintain growth, fuelled by the 56% upsurge in Mobile spend as consumer’s interact more through connected devices.”
By medium, television commands just under half of the region’s spend, but that hold is expected to slip to 46.8 per cent next year.
Television is now the slowest growing medium in Asia, and digital the fastest followed by cinema and outdoor. Given the size of spend on TV and the shift to digital, growth in advertising spend for TV is in low single digits, +2.6% in 2015, increasing in 2016 to +3.3% in a year of events.
Digital media continues to achieve outstanding growth as the effectiveness of this medium and results achieved, especially with Millennials, warrants the upsurge in spend levels. As digital rapidly evolves into a more established asset and programmatic and search bring stronger performance and efficiency.
Waters commented: “Digital is still the fastest growing media segment in Asia Pacific, with predicted rapid expansion of over 20 per cent in 2015. This is driven by the high demand for Mobile and Online Video advertising especially across social media and programmatic buying is becoming an increasingly popular way to manage digital investment. TV is still the leading media in Asia Pacific but smart marketers will keep their eyes on the ever changing digital landscape to ensure they make the most of the rich opportunities there.
The 2016 Rio Olympics in Brazil is not expected to boost ad spend significantly in this region, Waters added.
Based on data received from 59 markets across the Americas, Asia Pacific and EMEA, Carat’s latest global advertising expenditure forecasts that global advertising spend will grow by +4.0 per cent in 2015 to $529 billion, a slight decline from the 4.6 per cent predicted in March 2015, and 2016 is predicted to grow by 4.7 per cent, accounting for an additional $25 billion in spend.
Fuelled by the rise of mobile and online video spending trends, Carat’s latest forecasts reconfirm the continued solid growth for digital media, evident through the upsurge in the predicted share of advertising spend in 2015 of 24.3 per cent and 26.5 per cent in 2016. For ten of the markets analysed, including the UK, Ireland, Canada and Australia, digital is now the principle media used based on spend, with the US market predicted to join this list in 2018 when digital advertising spend is forecast to overtake TV advertising by more than $4 billion.
Globally, the advertising economy is expected to grow by four per cent in 2015, a fraction under APAC’s growth rate of 4.1 per cent.
Despite a slight decline in growth forecasts due to China’s economic downturn, Asia Pacific remains strong in 2015 with an above global spend rate, driven by high-performing India and growing Australia. Carat’s data also reports an encouraging outlook for 2016, with all regions predicted to increase year-on-year spend next year and central and eastern Europe to return to positive growth.
