Protests may slow HK adspend growth

27 October 2014

HONG KONG: Brands are likely to rein in their adspend in Q4 2014 and to shift it to Q1 2015 because of the influence of the recent pro-democracy protests in Hong Kong, a number of regional agency representatives have warned.

According to Ray Wong, CEO at media buy agency PHD, adspend in the fourth quarter is expected to register 3% growth whereas it would usually exceed 10%.

"Because the current social climate is not suitable for branding campaigns, some of these campaigns have been delayed. The means the adspend would be shifted to Q1 of next year," he told Marketing Interactive.

"Some clients have already said they will not be spending extra ad dollars this quarter," he added.

Recent statistics from admanGo, the advertising intelligence provider based in Hong Kong, revealed adspend growth of 3% to HK$11.4bn in Q3 2014.

But Kevin Huang, CEO of digital ad network Pixels, said 3% is a very low rate of growth for Q3 and that growth during the quarter would typically be about 6% to 10% in an average year.

He said overall market sentiment is likely to be on the "conservative side" for Q4, although he expected digital adspend will exceed 3% in the quarter.

"Despite the political uncertainty, I think digital will overachieve this 3% because digital is the media of choice in light of the Occupy movement, which is all about being on mobile, the web, live streams and messaging apps," he said.

L'Oréal is at least one leading brand advertiser to confirm that it will take a cautious approach to its advertising budget for the rest of the year.

Lisa Wong, director of communications, public affairs and sustainable director at L'Oréal Hong Kong, said: "We have plans for ad expenditure for the rest of the year and will monitor movements in the market and be vigilant."

However, these relatively downbeat comments from local industry practitioners stand in contrast to recent comments from Matthew Wigham, Asia-Pacific head of trading at MediaCom.

He told Advertising Age and also Mumbrella earlier this month that Hong Kong will remain the world's highest per-capita ad market at about $1,000 per person this year, and that the overall market is still set to grow 9% to $7.8bn this year.

Data sourced from Marketing Interactive, Advertising Age; additional content by Warc staff