Mumbai: A new report published today by Media Partners Asia (MPA) indicates that net advertising revenues in Asia Pacific, measured after discounts across 14 markets, grew by 6.8% in 2016 to reach ~US$170 billion, compared with an 8.5% expansion in 2015. Ad spend across these markets will increase by a further 6.4% in 2017, and at a 4.9% CAGR between 2017 and 2022, according to MPA forecasts. This follows a 7.6% CAGR between 2012 and 2017.
Commenting on the findings of the report, the latest edition of Asia Pacific Advertising Trends, MPA executive director Vivek Couto said: “Future growth is becoming more challenged, as markets mature and working populations stagnate or decline. This leaves China and India as the main dynamos of advertising growth. While Indonesia, the Philippines and Thailand are also important growth economies, they lag China and India in scale. Growth trajectories for the region’s other scale markets, Australia, Japan and Korea, are markedly lower than they have been in the past, especially for Korea.”
India is set to become Asia Pacific’s best performing ad market over the next five years, with net ad revenue expanding at a 13.1% CAGR between 2017 and 2022. This will help India overtake Australia to become the region’s third largest ad market by 2022, after China and Japan. Australia will fall to fourth place, while Korea will remain in fifth.
Another US$50 Billion In Net Ad Revenue By 2022
Over this period, net ad revenue across the 14 makets measured by MPA will rise from US$180 billion in 2017 to US$230 billion by 2022. In China, the region’s biggest advertising market, net ad revenue will reach US$121 billion by 2022, from US$90 billion in 2017. In Japan, net ad revenue will total US$50 billion by 2022, from US$46 billion in 2017.
India, forecast to enjoy the fastest growth over the next five years, will see net ad revenue expanding to US$17.1 billlion by 2022, up from US$9.2 billion in 2017. For Australia, another mature market, net ad revenue will rise to US$13.2 billion by 2022, from US$11.8 billion in 2017. Despite slow growth, Korea will hold onto its position as Asia Pacific’s fifth largest ad market, with net ad revenue touching US$9.7 billion by 2022, up from US$9.0 billion in 2017.
Indonesia, Southeast Asia’s largest ad market, will remain in sixth place, generating US$3.2 billion in net ad revenue by 2022. Indonesia will be closely followed by Taiwan and then the Philippines, which is poised to leap from 11th place among APAC’s biggest ad markets in 2017 to 8th place by 2022, thanks to an expected 11.4% five-year CAGR.
That momentum will make the Philippines the second-fastest growing ad market after India, among the 14 Asia Pacific markets measured by MPA. Thailand follows as the third quickest, with a 6.8% CAGR forecast for 2017 to 2022. Next is Indonesia, projected to notch up a 6.2% CAGR over the same period.
“Domestic demand is stabilizing across key Asian economies, helping boost consumption, which is encouraging for advertising expenditure,” Couto said. “External demand is also improving, as exports reach new highs in a number of markets, but activity may decelerate significantly in 2H 2017. In general, economic growth is slowing down, although among growth markets, China, India, Indonesia and the Philippines remain strong. Among mature markets, Japan is proving to be somewhat resilient and robust.”
Internet Advertising Top In Eight Markets By 2022
Internet advertising continues to grow at a redhot pace, climbing 20.8% in 2016 across the 14 markets in MPA’s report to reach US$66 billion. In 2016, the internet was the biggest medium for advertising in Australia, China, Korea, New Zealand and Taiwan. MPA expects that by 2022, Hong Kong, Japan and Singapore will join their ranks.
Television advertising remains robust in many territories, especially in India, Indonesia, Japan, the Philippines, Thailand and Vietnam. However, net TV ad spend as a whole slightly contracted in 2016, by 0.5%across the 14 markets surveyed by MPA. Free-to-air TV ad revenues are becoming weaker in Australia and Koreaamong larger markets, and in Hong Kong, Malaysia and Singaporeamong smaller markets.
Nonetheless, TV will still be the largest ad medium in India, Indonesia, the Philippines, Thailand and Vietnam by 2022. At the same time, the internet will also become the second-largest ad medium in these geographies over the next five years. The biggest swings will take place in Southeast Asia, as mobile and video advertising drive internet ad spends to new heights.
“Consumers are spending more time on mobile, social and online video platforms, driving demand for internet advertising,” Couto notes. “In most places, Google, including YouTube, and Facebook are dominant. In some markets however, especially in India, Japan and Korea, local digital players, as well as key incumbents in TV and print, are beginning to grab a bigger slice of the pie. China, meanwhile, is entirely dominated by a local ecosystem.”
Asia Pacific Advertising Trends, published annually, contains detailed analysis ofmedia across 14 markets in Asia Pacific. Key metrics include: historical and projected data (2008 to 2022); net advertising revenues across TV, internet (search, display and online video), print (newspapers and magazines), out-of-home, radio and others, including cinema; macroeconomic analysis and impact; and analysis of key drivers and challenges by market. Market coverage comprises: Australia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore, Taiwan, Thailand and Vietnam.
Heighlights of the report:
- India will be APAC’s fastest growing major ad market over the next five years, motoring ahead at a 13.1% CAGR
- China remains a mighty growth engine, set to become a US$121 billion ad market by 2022, from US$90 billion in 2017
- The Philippines is also poised for dynamic growth in ad spend, second to India, with an 11.4% projected CAGR for 2017-22
- Internet ad revenue surged forward 20.1% in 2016; ad spend on free-to-air TV slightly shrank, down 0.5% over the year
- Growth trajectories for ad revenue in Australia, Korea and Japan, large scale markets, are maturing across media