Adspend to rise in Asia

02 November 2011

SINGAPORE: Advertising expenditure will increase by over 5% in Asia Pacific this year despite economic instability around the world, according to a new study.

In its latest quarterly forecast, Media Partners Asia, the consultancy, predicted that total adspend in the region would rise by 5.1% in 2011.

This constitutes an upgrade from the firm's last forecast, which projected a 4.5% expansion, but marks a slowdown on the 8.9% uptick logged in 2010, showing Asia is not impervious to difficulties elsewhere.

"It's an uncertain period as we enter Q4 because of the deteriorating global macro view and various local issues such as floods in Thailand, FMCG pressures in India, consumer weakness in Australia and the Philippines, and some softness creeping into Malaysia, Hong Kong and Singapore," Vivek Couto, director of research and content at Media Partners Asia, said.

More positively, the comparative buoyancy of domestic demand in nations like China, Indonesia – due to be the "top performer" in 2011 and 12 – and South Korea should help offset these trends.

"Asia is a relative safe haven given its growth resilience," Johanna Chua, a director at Citigroup, said. "Deteriorating global growth prospects will likely hurt more export-dependent economies, but the domestic-driven economies of Indonesia, India and China should fare relatively well."

Similarly, Japan has made a faster than expected recovery from the natural disasters that hit the country earlier this year.

The nation's advertising market is still likely to contract by 1.4% in 2011, but this can measured against the 2.5% decline anticipated in Media Partners Asia last study.

Japan should then experience a 2.3% improvement in 2012, with television ad sales climbing by 3.4% and online witnessing a 9.3% lift.

Looking further ahead, Media Partners Asia forecast the local ad market would expand by 7.5% in 2012, encouraged by a regional economic rally in H2, and major international events like the Olympics.

Over the longer term, the forecast predicts that digital media could take 25% of regional adspend by 2014 on a "conservative" reading, possibly reaching 30%, not least thanks to the rise of the mobile internet.

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