While advertising growth is forecast to increase by +7.4% in APAC in 2019, to reach $186 billion, two-thirds of all regional advertising revenue is concentrated in the two largest markets: China and Japan which make up two-thirds of the total with China holding 44% and Japan 23%.
The fastest-growing markets in the region are in the Indian sub-continent: India (+15% in 2019), Sri Lanka (+14%), and Pakistan (+15%). On the other end of the spectrum, Singapore (+1%), Malaysia (+2%) and Thailand (+2%) will show little advertising growth in 2019.
The report notes that advertising markets in APAC “are wildly different, in terms of both maturity and intensity: it ranges from Australia, with almost $500 in ad spend per capita per year, to India with just $9 per year.”
China is somewhere in-between with $60 of ad spend per capita expected in 2019. This is still below the global average, but China is closing the gap as its growth is consistently higher than global average growth. APAC overall sees $48 per capita of ad spending.
The global advertising market will grow by +5% this year according to the updated report which reflects Magna increasing its forecast for 2019 growth, from +4.7% in December 2018 to +5% following stronger-the-expected advertising activity in the first half of 2019 in several key markets, including the US and China.
The Asia-Pacific region is expected to increase its share of the global advertising market from 31% to 33%. by 2023.
Media owners advertising spend growth will increase by +7.4% in 2019, to reach $186 billion. Growth will be only slightly slower than 2018’s +7.8% growth rate and be slightly above prior expectations. Linear advertising revenues will increase by +0.4% in 2019, compared to digital growth of +15.9%.
This is one of the few regions where linear sales are still expected to be positive in 2019; in EMEA and North America, linear growth expectations are negative in 2019.
Digital leading the way
Advertising growth in APAC continues to be driven by digital formats with digital advertising sales forecast to increase by +16% in 2019 to reach $90 billion, representing 49% of total ad sales.
Mobile impressions and clicks are now attracting the bulk of digital advertising spend in the region, reflecting the continuing rise of smartphones or feature phones in the life of APAC consumers. Mobile ad spend will grow by +26% in 2019, compared to -5% for desktop-centric spending.
TV remains strong in South Asia and some big SEA markets. In most other markets, TV is fast losing share in total ad spends as a result of a continual loss of viewership.
In terms of formats, paid search controls the lion’s share of digital advertising spend and will grow double-digit again in 2019: +14% to $45bn, half of total digital advertising spending. Social media is growing the fastest of all digital formats: ad spend will increase by +27% in 2019 to reach $17 billion, i.e. 19% of total advertiser budgets.
Digital video is also showing robust growth, as spend will increase by +26% to reach $16 billion (17% of total budgets). Like many regions, static display advertising is struggling, and will be flat in 2019; spending on static display formats will start to decline and those declines will accelerate going forward as brands lean towards other more dynamic advertising formats within digital media.
Television advertising sales will grow by a modest +1% in 2019 to reach $59 billion, 32% of total APAC ad spend. This is will be the second consecutive year of stagnation for linear television advertising in the region (2018: +0.5%).
“TV remains strong in South Asia and some big SEA markets,” said Gurpreet Singh, Managing Director Magna APAC. “In most other markets, TV is fast losing share in total ad spends as a result of a continual loss of viewership. TV viewership is not really dying, content consumption is just moving from linear TV to online video and non-linear TV (OTT) as technology is creating more accessibility to high-quality content choices for consumers.”
Print advertising sales continue to decline, with newspapers ad revenues expected to decrease by -7% in 2019, while magazine ad sales may shrink by -10%. Radio advertising is stable: +1.9% in 2019, following 2018’s +5.4% growth rate.
APAC is suffering the same economic concerns that are present in much of the rest of the world, but the growth baseline is still higher than most developed regions in the west.
Finally, Out of home continues to outperform other linear media: ad revenues will increase by +6% to reach $15 billion. Out of home growth is fuelled by digital OOH formats, which will increase by +16% in APAC in 2019 to reach $3 billion, representing 20% of total OOH spending.
“APAC is suffering the same economic concerns that are present in much of the rest of the world, but the growth baseline is still higher than most developed regions in the west,” said Leigh Terry, CEO IPG Mediabrands APAC. “As the market grows faster than NA and EMEA, we expect to see APAC continue to increase its share of global advertising spend to 33% by 2023.
Break Down by Country
Magna released a more in-depth look at advertising markets by country:
CHINA: 2019: +10.3%; 2020: +7.2%
China’s advertising economy will grow by +10.3% this year, slowing down slightly from 2018’s +12.0% growth rate, but slightly higher than prior expectations. This will bring the total market to CNY 560 billion ($85 billion), the second largest advertising market globally. In 2020, the Chinese advertising economy will increase by +7.2% to reach CNY601bn. In China, linear advertising sales will shrink by -0.5% this year, compared to digital growth of +17%. In addition, editorial media sales will increase by +3.8% this year, compared to direct advertising sales increasing by +18.2% this year. Like many markets, digital is the overall growth engine, and direct media is taking budgets from editorial media.
Despite concerns about domestic economic imbalances and the mounting risk of trade conflicts, economic growth expectations remain robust. The IMF is now expecting real GDP to increase by +6.3% this year, slightly slower than last year’s +6.6% growth, but still robust. That growth will continue in 2020, with real GDP expected to be +6.1%. Inflation is also under control in China, with CPI expectations +2.3% this year, and remaining in the 2-3% range through 2023.
Television advertising is decreasing. Mild CPM inflation (mid-single-digit) cannot compensate for accelerating viewing declines (high-single-digit), and that translates to overall TV advertising spending growth of -2.3% in 2019, after shrinking by -1.0% in 2018 and stagnating in the last five years. While CCTV continues to dominate the television landscape, over-the-top (OTT) is becoming larger and viewed less as an experiment, and more as a legitimate core part of video advertising strategies by many brands.
Digital media remains the engine of growth in China. Digital advertising sales will increase by +17.3% this year to reach CNY 362bn ($54bn). Digital formats now control a massive 65% share of total advertising, the third highest market share globally (behind Sweden, and the United Kingdom). Search advertising represents nearly 60% of the digital total, and continues to be spurred by the leading search engine (Baidu), plus exponential growth from e-commerce product listing advertising that is increasingly similar (and competitive) to traditional auction-based keyword search (Alibaba). In fact, traditional core search continues to lose share of overall search to product listing search. China has several dominant digital publishers. The five leading players (Alibaba, Tencent, Baidu, Sina, and Sohu) together control more than 75% of total digital advertising revenues.
In 2020, digital advertising spending will increase by +12.6%, slower than this year’s +17% growth, but still strong especially since digital advertising will surpass two-thirds of total advertiser budgets in 2020. This will bring the total digital market to CNY 407bn ($61.5bn), larger than in any market except the US.
AUSTRALIA: 2019: +2.5%; 2020: +3.4%
Australia’s advertising economy is predicted to grow by +2.5% in 2019, slower than 2018’s +5.3% performance, to reach AUD 17.0 billion (USD 13 billion). Australia is one of the most advanced advertising economies in the world with the second highest ratio of ad spend per capita ($497 per year). In 2020, the Australian advertising economy will increase by +3.4% to reach AUD17.6bn.
Economic confidence has dipped recently as a result of low manufacturing figures, concerns around the pace of trade and potential trade wars among large partners, a deflationary residential property market, and low wage growth. In Australia, real GDP expectations in 2019 are +2.1%, with CPI also expected to be +2.2% for nominal GDP of +4.3%. In 2020, real GDP will accelerate to +2.8% but inflation will decrease, keeping nominal GDP steady.
Digital advertising controls a massive 60% of total brand budgets (the sixth highest share globally). Digital media is so mature in terms of media usage and spend that growth rates are starting to plateau Magna expects total digital ad spend to grow by +7.5% in 2019, the first year of single-digit percent growth since 2001. Digital spending growth has already started to slow down in the first few months of 2019 (as it has in many other mature markets in 1Q19), despite an election in Australia in May. While there are many regulations around Australian political advertising on TV, many of those same regulations don’t apply to digital media and several parties used digital video to reach voters.
Television advertising sales will shrink by -4.7% this year, the sixth consecutive year of negative growth. Linear TV viewing is shrinking by approx. -10% per year in Australia, partly due to the rapid rise of VOD. Netflix has been in the market for 4 years and has more than 10 million subscribers. The decline in ratings supply generates free TV inflation of +9% this year, although that is not sufficient to fully offset the declines in viewing and stabilize broadcaster revenues. Furthermore, Australian TV has one of the lowest market share (less than 20% of total advertising), which means that TV is no longer critical to the advertising strategy of many brands.
The Cricket World Cup and the Rugby World Cup are both taking place in 2019, and are traditionally strong viewing sports in Australia. However, neither has a significant impact on overall TV spend. It merely changes the pace of spend throughout the year, and is not as large as something like the Olympics in Australia (which already had diminished impact). Finally, much of the viewing now occurs on digital channels. Australia also had elections in May, and Scott Morrison, the incumbent, won re-election as the Prime Minister. Like the big sporting events, this has only a mild effect on the advertising market.
Print in Australia, like in most mature markets, is extremely weak. Newspaper advertising spend will decrease by -13.5% this year, and magazine performance will be even worse (-17%). Radio is stable (+1% y/y this year). Finally, OOH continues to grow, by +4.9% this year. This is weaker than last year’s +9.4% performance, but still robust compared to the rest of offline media formats. Digital OOH will grow the fastest, but not to the degree that it has in past years due to a slowdown in new location conversions.
JAPAN: 2019: +3.5% – 2020: +3.6%
Japanese media owners advertising revenues grew by +2.6% in 2018, to JPY 4.3 trillion ($39.4 billion), in line with 2017 (+2.7%), and growth is expected to accelerate in 2019 (+3.5%) and 2020 (+3.6%). Digital media ad sales will remain the primary driver of growth while the stagnating economy will lead to stagnating spend in traditional, linear ad sales (linear TV, print, radio, OOH). Those declined by -3% in 2018 and will remain flat, at best, in 2019 and 2020.
The Japanese economy is still essentially stagnating, with the IMF expecting flat real GDP growth (+1%) over the next five years with consumer price inflation also around 1% per year. The planned increase in the sales tax rate, which was postponed several times by the Abe Government, is scheduled to take place in October 2019. It is expected to boost the economy in the third quarter of 2019 because of a boom in retail sales immediately before the tax increase.
After October though, retail sales are likely to decrease for at least two quarters, triggering a mini-recession, as it did when a similar sales tax increase was introduced in 2014. The Tokyo Olympics in the summer of 2020 will not make a major difference at the macro-economic level but will help support marketing and advertising activity in 2020(especially for television and OOH) and compensate for the predicted recession of 1Q20. A few other events will provide minor drivers to marketing/advertising activity in 2019: the celebration of the new “Reiwa” Imperial Era in the Spring of 2019 and the IRB Rugby World Cup in the Fall of 2019.
Television advertising sales will be flat in 2019 (+0.3%), following a slight decline in 2018 (-2%). The noticeable, but temporary, increase in demand around the FIFA World Cup and the performance of the “Samurai Blue” national team in Russia (reaching the round of 16), helped boost spend and audience levels in June and July 2018, but made little difference on a full-year basis. Overall, TV viewership was down -1% for the full year, with steeper declines seen among younger target groups.
In September 2019 Japan will host the 9th IRB Rugby World Cup. The 48 free-to-views matches will all be broadcast on NHK and Nippon TV, as well as J Sports. The event may not be as big of a driver as the FIFA World Cup in 2018 but will still be significant: the Japan-Samoa match in the 2015 Rugby World Cup in England attracted 26 million Japanese viewers, despite the time difference. The 2020 Tokyo Olympics, which will be broadcast primarily on state-run NHK with other networks airing specific events, are expected to have a much stronger effect, with total television ad sales likely to grow by +2.6% to JPY 1.7 trillion ($15.8 billion). CPM inflation will be around +2.3%, low by global standards (average free TV CPM inflation: +9.5%) but fairly high for Japan, where all other media formats except digital video typically see either flat CPMs or deflation.
Print advertising sales continue to decline as the erosion in readership is not compensated by price increases. However, the pace of decline in newspaper ad revenues will be mitigated in 2019 by political spending ahead of the House of Councillors election (Upper House – July 2019) and the transition to the new imperial “Reiwa” era. Nevertheless, newspaper ad sales are expected to decline by -6% this year, to JPY 410 billion ($3.7 billion), and will re-accelerate to -9% in 2020. Newspapers are still seen as the most respected media in the Japanese culture, and so are the only media format to benefit from increased advertising demand around the Reiwa transition (other media being not formal enough for imperial celebration campaigns). Radio NAR also continues to decline, -4% in 2019 following -1% in 2018. Radio spend is around 2% of total NAR, slightly below the APAC average of 3.5%.
OOH sales are flat overall, with strong DOOH growth (+21%) balanced by declines in traditional OOH (-2%). Japan is the second largest OOH market in the world, with 522.4 trillion yen (excluding cinema), or $4.7 billion, in 2018. The market share of OOH in Japan is double the global average (12% vs 6%) due to the high population density and relatively high costs of OOH media (typical CPM: $31, APAC average: $17). DOOH remains relatively underdeveloped, however (11% of OOH vs 20% global average), due to regulatory restrictions on DOOH inventory, the fragmentation of the industry, and the high cost.
Despite the stagnating economy, small business and national brands will continue to grow their digital media ad spend. Magna expects digital format ad sales to grow by +13% in 2019 to JPY 1.6 trillion ($14.3 billion), representing 35% of total NAR. Japan’s digital market share is below the APAC average of 45% due to the unique weight of senior citizens in the population (one third of the population will be over 65 by 2020) that causes inertia in terms of media consumption – compared of other market – that keep linear television and print more resilient than elsewhere. Advertisers in key sectors—communications, personal care, food and beverage, and finance—continue to rely heavily on television, and are expected to spend more around the 2020 Olympics. Moreover, concerns over brand safety and ad fraud serve as inhibitors among some national brands. Nevertheless, digital advertising sales are expected to overtake TV in 2021.
INDIA: 2019: +15.2%, 2020: +13.1%
India remained the fastest-growing large ad market in 2018 (+14.3%) and will accelerate further in 2019 (+15.2%). In addition to a strong economy growing at +7.3% in 2019, Cricket World Cup and elections will drive extra ad spend.
In 2018, advertising rose above the effects of demonetization and the period of economic stagnation following the 2017 implementation of the Goods and Services Tax (GST). Digital advertising (+36% over 2017) and television advertising (+13.9% over 2017) led growth, with total advertising spend growing +14.3% (+0.3% higher than Dec 2018 estimates). Advertising to GDP ratio was maintained at around 0.36%.
In 2019, India is expected to become the fifth largest economy in the world, surpassing the UK and France. The Government’s interim budget provides direct benefit transfers to farmers and personal tax relief for lower- and middle-income groups, which is expected to spur consumption by increasing disposable income. This has potential to raise consumption demand and therefore advertising spend. Economic development is at the top of the government’s agenda now that the election-related uncertainty is over. The planned structural reforms are expected to help the economy stabilize around 7¾ percent growth in the medium term.
A strong economy and cyclical accelerators in the form of National Elections and Cricket World Cup will help the ad spend grow +15.2% in 2019, a slight reduction from +15.4% estimated in Dec 2018 but still an acceleration over 2018 growth of +14.3%. Overall spend will rise from INR 689.6 billion ($10.1 billion) to INR 794.7 billion ($11.6 billion).
SOUTH KOREA: 2019: +4.2%; 2020: +2.5%
Media owners’ advertising revenues will grow by +4.2% in 2019, slightly faster than 2018’s +3.5% growth rate, and ahead of prior expectations. This will bring the total advertising market to KRW 10.4 trillion ($9.5bn). In 2020, the South Korean advertising economy will increase by +2.5% to reach KRW10.7tn. South Korea is the fifth largest market in APAC, behind India, Australia, Japan, and China. It has ad spend per capita of $183, significantly ahead of the APAC average and some of its surrounding countries.
The Korean economy continues to slow down, and nominal GDP growth this year is only expected to be +4.0%, below prior expectations. Real GDP is expected to increase by +2.6%, with CPI of +1.4%. South Korea remains a low inflation market.
Television has been struggling of late. Ad revenues were flat in 2018, and 2019’s projected growth (-1.0%) will represent the fourth year of shrinking ad sales out of the past six. In addition, expectations are for television spend to continue to decrease going forward. While there was a small boost in television and OOH spending in 2018 thanks to the PyeongChang Winter Olympics, the Asian Games hosted by Jakarta and Palembang in 2018, and the FIFA World Cup, the incremental spend wasn’t as large as expected, and barely provided for a stable market. Ratings are expected to decline in the mid to high single digit percent range and CPM increase of +4% won’t fully compensate for the lower volume of GRPs to trade.
Print and radio advertising revenues will decline in 2019, as they have for the past three years. OOH will stabilize this year following two down years. Competition for premium OOH locations in Seoul continues to ramp up, increasing pricing and spurring more investment by OOH owners.
Digital formats continue to see growth and will increase by +13% in 2019 to reach 45% of total budgets. Digital spending in South Korea is led by video and social, which are both expected to increase by +21%, although social media spend is nearly 4x that of video, so it has a much larger impact on overall growth. Search advertising remains the largest share of the digital advertising economy in South Korea, but will only increase by +7% this year. The rollout of 5G service on wireless networks (one of the first countries globally to do so) has created demand for more immersive mobile ad experiences. This comes in the form not just of greater mobile creative cost, but also in more brands transitioning greater budget shares to mobile. The Korean market is also matching what is seen in the US, with an accelerating quantity of professional video content as providers spend on content generation to compete with a growing Netflix presence.
INDONESIA: 2019: +6.8%; 2020: +7.9%
The advertising economy of Indonesia will grow by +6.8% in 2019, in line with 2018’s +7.0% growth, and slightly below prior expectations. The total market in 2019 will reach INR 98 trillion ($6.9bn). Ad spend growth has been in the high single digits for the past six years, spurred by strong economic growth (+8.7% nominal GDP growth expected in 2019). In 2020, the advertising economy in Indonesia will increase by +7.9% to reach IDR105tn.
Indonesia held landmark general elections in April this year. It was the first time in Indonesian history that the President, Vice President and members of the Consultative Assembly were elected on the same day. Many brands are hesitant to spend around the elections given political and economic uncertainty. Political parties are permitted to buy TV commercials in Indonesia, although television stations are limited to 10 spots from any one political party in a day. In addition, many political candidates have ownership stakes in media companies which can create a tailwind for political investment in television. As a result, television was stronger this year (+9%) than it will be going forward (mid-single digit % growth). Furthermore, Google has restricted all political advertising on its platform rather than risk being accused of impacting the outcome of the election and said they would encourage other large digital properties to do the same. There have been significant protests following the election, with the official loser, Prabowo, claiming rampant election fraud.
Print in Indonesia is not faring better than it does in mature markets. This year, newspaper spending will decline by -15%, and magazine spend will be even worse at -25% (although it has a tiny fraction of the spending that newspapers have). Radio is stable, and OOH will grow, although is still significantly below its peak because of declines in OOH spending from 2015-2017.
Digital advertising spend is expected to grow by +19% in 2019, a relatively modest growth rate compared to the massive nearly triple-digit growth rates of several years ago. That digital growth is led by video (+33%) and social (+27%).
THAILAND: 2019: +2.3%; 2020: +2.8%
Media owners advertising revenues will increase by +2.3% in 2019, accelerating from this 2018’s +3.0% performance, slightly slower than prior expectations. This will bring the total market to THB 129 billion ($4.0 billion). Thailand held a general election in March, the first election since the 2014 coup that installed General Prayut Chan-o-cha as Prime Minister.
he political instability remains a headwind for the general economy, for business confidence and advertising spending. In 2020, the advertising economy in Thailand will increase by +2.8% to reach THB132bn.
Thailand’s new king, King Vajiralongkorn, was crowned in May 2019. Advertising closed briefly with no advertising on linear media formats, but overall there wasn’t nearly the same impact that the funerals of his father had in 2016, where advertising halted across most publications for weeks or months at a time.
Television advertising remains stable in Thailand and advertising sales will increase by +1% in 2019, the second consecutive year of revenue stability after two years of significant declines surrounding the death of Thailand’s king at the end of 2016. Television still represents nearly 60% of total spending.
Digital, on the other hand, represents just 14% of total budgets. However, digital advertising is growing quickly from this low base, with a +24% growth expected in 2019, led by social (+34%), search (+33%), and video (+22%).
HONG KONG: 2019: +4.9%; 2020: +4.8%
Advertising sales will increase by +4.9% in 2019 to reach HKD 27.4bn ($3.5bn), a similar growth rate as 2018. In 2020, the advertising economy in Hong Kong will increase by +4.8% to reach HKD 28.8bn. Television will grow by +2.9% in 2019, a slowdown from last year’s +7.5% performance. Connected TV services and online television like MyTV Super are gaining traction in Hong Kong, but advertising sales are growing from a low base. Like many markets, digital formats are the engine of growth and will increase by +18% in 2019. Despite the high growth, digital formats still only represent 25% of total budgets, far below many similar markets. The majority of digital spend is in video, with strong growth in app environments.
Print retains a 22% share of budgets, one of the highest global totals, behind newspaper share leader Austria. Furthermore, while newspapers and magazines are seeing negative growth, print properties are still doing well in Hong Kong as many have successfully transitioned their business models online, especially premium fashion properties and international titles like Hearst Publications and the New York Times.
Hong Kong also has $464 in ad spending per capita this year, reflecting the maturity of the market. This is the fourth highest total globally, behind Australia, Switzerland, the US.
MALAYSIA: 2019: +1.5%; 2020: +3.0%
Malaysia’s advertising revenues will increase by +1.5% this year, slightly stronger 2018’s +0.8% performance, and marginally ahead of prior expectations. In 2020, Malaysia’s advertising economy will increase by +3.0% to reach MYR 5.4bn ($1.3bn).
Television advertising revenues will decrease by -3.2% in 2019, as they did in 2018, as double-digit CPM inflation is not enough offset the significant declines in viewership on traditional linear television. Digital advertising formats will increase by +13% in 2019 to reach a third of total budgets. This is relatively slow growth for the low penetration of digital advertising formats in Malaysia, but that is reflective both of brands that are still reluctant to transition to digital (many brands are only spending on digital formats for the first time in the past year or two), as well as a newfound focus on brand safety and viewability. Newspaper readership continues to decline, and advertising revenues will decline this year by -10%. Newspaper advertising still commands 20% of total brand budgets, however, one of the highest global totals (behind global leader Austria).
Top brands in Malaysia have been transitioning towards digital and away from linear advertising media faster this year than at any time in the past. TV is the most affected by this shift. This is partially due to Malaysian consumers shifting significantly to digital formats. The share of internet users consuming videos digitally has risen from 26% in 2017 to 57%, according to Nielsen.
TAIWAN: 2019: +6.9%; 2020: +3.0%
Advertising sales are forecast to grow by +6.9% in 2019 to TWD 74bn ($2.4bn) in-line with prior expectations, and slower than 2018’s +10.4% growth. In 2020, Taiwan’s advertising economy will increase by +3.0% to reach TWD75.9bn.
Ad sales in 2018 were boosted by local elections dubbed the ‘9 in 1 elections,’ as nine different categories of local government positions were up for a vote in November. These elections take place every four years and the most important of the positions being voted on are for city mayors and county magistrates. This helped increase spending on television (+2%, compared to the prior three years which had all suffered declines) as well as radio which was nearly flat (-2%) compared to massive declines the prior two years (-16% and -24% respectively). OOH also saw significant increased relative to prior years.
In 2019 growth will instead be led by digital spending, which will increase by +15% to reach 54% of total budgets. Digital growth will moderate going forward, however, and will fall below double-digit growth rates starting in 2020 (+9.3% digital growth expected). This will result in digital advertising ending 2023 around two-thirds of total budgets.
PHILIPPINES: 2019: +6.5%; 2020: +9.1%
Advertising revenues in the Philippines will increase by +6.5% in 2019, to reach PHP 115bn ($2.2bn). This is a re-acceleration following the slowdown observed in 2018 (+1.8%). In 2020, the advertising economy in the Philippines will increase by +9.1% to reach PHP125.9bn.
Television spending will increase by nearly +5% in 2019, boosted by the elections in May 2019, and against a surprisingly weak performance in 2018 – the first-ever decline for TV advertising sales.
Digital advertising sales are expected to increase by +21% from a low base: digital ad sales only represent 7% of total advertiser budgets – the third lowest market share out of 70 markets analyzed by Magna. Print has been marginalized as an advertising medium, as combined newspapers and magazines have just 2% share of total advertiser budgets. Declines continue to be steep, with newspaper spending declining by -9% this year, and magazine ad spending declining by -23% this year (an improvement from last year when Summit Media, the publisher of Cosmo, Yes!, Esquire, and FHM, stopped paper publications to go entirely digital).
SINGAPORE: 2019: +1.2%; 2020: +2.3%
Singapore’s advertising sales are expected to finally stabilize and recover by +1.2% in 2019, following three years of declines. This is in-line with prior expectations and will bring the total Singapore advertising economy to SGD 2.2bn ($1.6bn). In 2020, the advertising economy of Singapore will increase by +2.3% to reach SGD 2.3bn.
This rebound will include television, which will grow by +2.0%, breaking a string of five straight years of declines. Television spending in the Philippines remains 19% below its all-time peak from 2004, however. TV broadcasters have tried to continually raise prices, but are unable to increase pricing enough to offset shrinking inventory due to declining viewing. Digital advertising formats will increase by +21% in 2019, led by strong growth in social (+28%), video (+27%), and search (+20%). Digital formats still only represent 25% of total budgets, so strong growth is expected to continue through the end of our forecast period.
2019 is Singapore’s bicentennial year, and there will be additional ad spending from the government as a result. While this will be a tailwind for print, radio, and OOH, print will still decline nearly as severely as last year, and radio will decline by -5% compared to growth in 2018. Without the bicentennial, declines would be even more severe.
NEW ZEALAND: 2019: +4.8%; 2020: +3.8%
The advertising economy in New Zealand will increase by +4.8% in 2019, in-line with 2018’s +4.5% growth rate, and ahead of prior expectations. This will bring the total advertising market size to NZD $2.7bn ($1.8bn). In 2020, the advertising economy in New Zealand will increase by +3.8% to reach NZD 2.8bn.
Television NAR is expected to decline by -0.3%, a slight improvement from 2018’s -1.8% performance. Television spending will continue to decline going forward, however, and will represent just over 1/5 of advertiser budgets by 2023. The rugby and cricket world cup in 2019 will be a timing shift in terms of advertiser spending, but overall won’t have a significant impact on overall spending. Print advertising continues to decline, with newspaper advertising declining by -7% this year, and magazine advertising declining by -8%. Growth will stabilize slightly going forward though as there are still brands that find print exposure to be integral to their media strategy in New Zealand, and it will be harder to dislodge that final single digit percent budget share of spending from budgets. Digital advertising growth in New Zealand is relatively low (+13% expected in 2019) as digital now represents 46% of total budgets.
VIETNAM: 2019: +5.5%; 2020: +7.1%
Advertising revenues are forecast to increase by +5.5% in 2019, slowing down slightly from 2018 (+6.9%), below prior expectations. In 2020, the advertising economy of Vietnam will increase by +7.1% to reach VND32.9tn. Vietnamese economic growth continues to be robust, with GDP expected to grow by +10% in 2019 on a nominal basis in-line with 2018’s +11% performance. Television is dominant in Vietnam, and commands 80% of total advertiser budgets. This is the highest share across all markets, ahead of second place Lebanon. Digital advertising is growing at a rapid pace from a low basis, but television will still command over 75% of total budgets even in 2023.
PAKISTAN: 2019: +14.6%; 2020: +9.9%
The ad market in Pakistan is expected to grow by +15% in 2019, to PKR 88.3 billion ($840 million) following a steep decline (-11%) in 2018. The Tehreek-i-Insaf (PTI) government, led by Prime Minister Imran Khan after the summer 2018 elections, made the decision to cut government advertising as part of Khan’s efforts to reduce expenses and tackle corruption. Pakistan’s media industry has historically relied heavily on government spend.
Waqt Television was forced to close operations, and many other media houses experienced significant downsizing, sparking protests from journalists who had been laid off. Another popular TV station, Geo TV, was off the air for several weeks in the run-up to the general election. Economic uncertainty compounded the effects of the political uncertainty, with the Pakistani rupee depreciating by over -30% amidst a ballooning current account deficit and bailout negotiations with the IMF. For the year, Magna estimates that television ad spend decreased -15%, print by -17%, and radio by -15%. Digital was the only media format to see growth, +24%, a significant slowdown from 2017 growth of +39%.
Magna expects to see a return to growth in 2019, with television, which makes up two-thirds of total NAR, benefitting from the 2019 Cricket World Cup (+15%). Print and radio are likely to grow as well, now that the initial shock of the government’s strict reforms has worn off and a preliminary IMF bailout agreement has been reached. Digital formats, particularly social (+39%) and video (+31%), will continue to see the strongest growth, +32% to PKR 10.8 billion ($103 million), 12% of total NAR.
SRI LANKA: 2019: +13.7%; 2020: +8.0%
Advertising revenues in Sri Lanka will grow by +14% to 59 billion SLR ($4360 million), an acceleration over 2018 (+9%) due to the presence of cyclical drivers like the Cricket World Cup. Digital NAR growth, though still significant (+18%) is slowing down, inhibited by the 2018 and 2019 social media bans. The government temporarily blocked access to Facebook, WhatsApp, Instagram, and messaging app Viber in March 2018 and again in April 2019 following incidences of violence. Digital NAR is expected to reach SLR 8.3 billion ($51 million), 14% of total NAR. This is one of the lowest market shares in APAC, above Pakistan, the Philippines, and Vietnam. Magna anticipates television spend will grow by +15% to SLR 36 billion ($220 million), with pay TV (+25%) seeing the largest gains. The 2019 Cricket World Cup matches will air in Sri Lanka on Star Sports and on national television network SLRC, which does carry advertising.