TV adspend in Asia Pacific tops Western Europe

17 May 2010

HONG KONG: Television advertising expenditure in Asia Pacific surpassed the figure recorded in Western Europe in 2009 for the first time since records began, according to a new study.

Informa Telecoms & Media, the research firm, reported that net television advertising spend – excluding agency commission, discounts and production costs – declined by 8.1% in 2009.

Within this, 39 of the 53 major markets assessed by the company posted a contraction, as brand owners reined in their outlay across the globe.

"Audiences are fragmenting. This has given viewers greater channel choice and has led advertisers to question the rates that they were paying to the established players," the company said.

"These channels have had to show greater price flexibility to retain advertisers."

Expenditure levels in Asia Pacific climbed to $27.9bn (€22.0bn; £18.9bn) last year, buoyed by an uptick of 9% to around $4bn in China and growth of 9.5% to $1.1bn in India.

The Philippines also experienced an improvement of 12% and Indonesia saw an expansion of 9.7%, backed up by smaller countries such as Vietnam, which was up 20% to $183m.

In contrast, Japan delivered a decrease of 10% to $13.2bn, with Korea off by 14% and Australia by 8.5%, indicating the challenges faced by the more advanced economies in this area.

Elsewhere, television advertising sales came in at $26.7bn in Western Europe and $38.9bn in North America, Informa reported.

"There are very large markets such as India (where) there was no recession like we saw in Western Europe," Simon Murray, principal media analyst at Informa, argued.

"We did not expect Asia Pacific to pass Western Europe until after 2012, and possibly even 2015, although if I had to say when it might have happened with no recession, I'd say probably in 2013."

TV adspend currently stands at $303 per household in North America, $162 in Western Europe and just $40 in Asia Pacific, demonstrating the considerable potential that remains in the last of these regions.

Broadcasters are forecast to see returns rise by 3.7% to $116bn worldwide in 2010, aided by strengthening corporate and consumer confidence and events like the FIFA World Cup in South Africa.

Within this, budgets will jump by 16% in Argentina, 12% in China and 10% in India, with South Africa, Turkey and Vietnam similarly due to enjoy double-digits gains.

However, countries such as the Czech Republic, Greece, Norway, Taiwan and the Netherlands will witness continuing softness in demand this year.

Indeed, marketers' investment in TV will not equal the peak level set in 2008 until 2012, when the combination of the US presidential election and World Cup is expected to drive totals up to $126bn.

Television advertising spend should then reach $141bn by 2015, with North America on $47.1bn, Asia Pacific on $34.4bn and Western Europe on $33.6bn.

Data sourced from Informa/The Guardian; additional content by Warc staff