As widely expected [WAMN: 19-Apr-01], the US economic downturn has hit the Asian ad industry, with first-quarter adspend falling year-on-year in Australia, South Korea and Taiwan, according to a study by A C Nielsen.

Only in China and a handful of Southeast Asian markets, says the research giant, was there any increase in first-quarter spend, and even then year-on-year growth was at a slower rate than Q1 2000, when ad sales were buoyed by dotcom extravagance.

“Spending is down,” lamented Roland Crouch, Zenith Media Asia’s regional operations director. “The whole market seems stagnant, and some markets have real problems.”

Crouch added that the AC Nielsen figures – based on published rate cards – may not tell the whole story: “Most big advertising firms negotiate off rate-card deals, getting a 30%-40% discount [unrecorded in the Nielsen survey]. This implies big growth, but the underlying net media trend is much smaller.” In fact, some markets reporting small growth may in fact be witnessing a fall in adspend.

Advertising in the region has been affected by a slump in spending in the retail, luxury goods and automobile sectors. This has been exacerbated in South Korea by anxiety over the economy and in Taiwan by political instability.

There appears to be no immediate end to the decline in sight. “I think that other markets will follow suit,” said Sherrin Loh, international media director at CIA Medianetwork International Asia. “Singapore and Hong Kong could go flat in the next quarter.”

News source: Wall Street Journal