Adspend growth to slow in Asia

12 August 2011

SINGAPORE: Advertising expenditure growth rates are set to slow in Asia Pacific, reflecting broader economic difficulties around the world, a new forecast has suggested.

Media Partners Asia, the consultancy, predicted adspend levels across the region would increase by 4.3% this year, measured against an 8.6% expansion in 2010.

This also constituted a downgrade from the firm's previous estimate of a 5.2% lift, published in June, primarily due to the debt crisis in the US and much of Europe, volatile equity markets, falling export demand and wider fiscal uncertainty.

In its last study, MPA argued India would enjoy a 15% uptick in ad revenues, but as food price inflation and rising commodity costs are putting pressure on consumers and brand owners in the country, this figure now stands at 11.4%.

Similarly, declining business sentiment and a challenging retail environment caused Australia's growth rate to be trimmed from 3% to below 1%.

Elsewhere, Japan, where the ad industry was previously expected to be flat in 2011, is likely to observe a 2.5% contraction following the recent natural disasters which hit the country.

As exports contribute less than 20% of GDP in nations such as India and Indonesia they are anticipated to remain relatively robust, but South Korea, Taiwan, Hong Kong and Singapore are more vulnerable.

Despite this, South Korea is still pegged to see totals rise by between 5% and 6% during 2011, according to Media Partners Asia.

Looking further ahead, the company forecast that advertising expenditure in Asia would increase by 7% in the region across 2012 as a whole.

Excluding Japan, figures will rise by 8.8% this year, and 9.7% in 2012, it added.

Data sourced from Media Partners Asia; additional content by Warc staff