Amid multiple uncertainties concerning economic and social climates in Hong Kong, the split between online and offline advertising spending is expected to shift from 50/50 last year to 60/40 this year, while ROI on advertising investment, especially online, will increase in importance.

The figure from the latest Advertising Spending Projections Survey conducted by Nielsen in collaboration with the Hong Kong Advertisers Association (HK2A) shows that brands will continue to use advertising to defend market share in the coming year.

With job prospects and financial security under pressure, Hong Kong's consumers are becoming more conservative, reflected by a new low in Consumer Confidence Index (CCI) at 83 during the last quarter of 2019, compared with 99 at the end of 2018. This is part of The Nielsen Global Survey of Consumer Confidence and Spending Intentions. 

Against this backdrop, Hong Kong's advertisers forecast an even tougher year ahead in 2020 as Hong Kong's economy is likely to remain on a weak footing in 2020.

Most growth is predicted in the Pharmaceutical & Healthcare, Telecom & Technology and Packaged Food sectors, while  Luxury, Entertainment & Retail will be stunted for the rest of this year.

Half of the respondents in the Advertising Spending Projections Survey anticipate a decrease in their advertising budgets this year. Following a 1.4% increase in 2019, budgets will now reduce by 7.1%. The decline is mainly due to an 11% cut in offline advertising (allocated to TV, print and events) , while the funds for online advertising expand by a marginal 0.8% (led by video, paid social, and display ads). 

Nielsen and HK2A noted that the actual drop might be even deeper as the true impact of the coronavirus outbreak was not included in the research conducted from the end of 2019 to early 2020. 

Under such circumstances, more investment is required in the measurement of advertising effectiveness, as a result of the increased need to pursue Return of Investment (ROI) on adspend. According to the survey, most Hong Kong advertisers (44%) say ROI calculation is the number one challenge for them.

The adspend survey was conducted in two waves by Nielsen, from November 29, 2019 to January 14, 2020 online and from February 5 to 21, 2020 for executive interviews. Close to a hundred self-administered questionnaires were received from key advertisers. Telephone interviews were also conducted with randomly selected advertisers for qualitative feedback.

Sourced from Nielsen Hong Kong