APAC ad spend strong despite a downgrade

Despite an overall downgrade in APAC ad spend, markets such as Indonesia is expected to pull in the biggest increase at 19.6%, outstripping China's growth.In its latest report, ZenithOptimedia has downgraded Asia Pacific's ad spend from 7.4% to 6.7%.While the forecast for the APAC region has been downgraded, strong growth in Indonesia and China, as well as a resurgence in Japan and Thailand (following the latter two's recent disasters) is expected to offset sluggish ad spend in Australia/New Zealand, Singapore and Taiwan, said a note in the report.Singapore is expected to see a drop in ad spend by 2%, while Hong Kong will increase by 3.3%, Malaysia by 5.9% and Philippines by 2.2%.In Asia as Japan continues its resurgence from the 2011 tsunami and sees a strong improvement from a 1.6% decline in 2011 to +3% growth giving a significant boost to overall APAC ad spend picture in 2012."As Japan ad spend is over 50 billion a strong increase is like adding another market the size of Philippines to the total APAC ad spend growth in 2012. We are also seeing Thailand post 2011 floods bounce back with 9.1% ad spend growth predicted in 2012," ZenithOptimedia, said.Global ad expenditure is forecast to grow 4.3% in 2012, reaching US$502 billion by the end of the year, with growth to pick up during the major sport events from June to August namely Euro 2012 Football Championship, the Olympics and the November US elections. These events are expected to pull in US$ 6.3 million this year.Emerging MarketsBeyond the BRICs: the next wave of emerging ad marketsAdspend growth (2014 v 2011)US$ million, current prices. Currency conversion at 2011 average rates.  Adspend growth1China16,4562Brazil5,3973Russia4,3054Indonesia3,9595Argentina2,2686South Africa2,0677South Korea1,7028India1,5409Thailand1,03410Turkey1,030Source: ZenithOptimediaThe media agency also came up with a prediction of the next top 10 emerging markets by 2014, with China at the top, and Indonesia expected to be the next to enter the top 10.Between 2011 and 2014, 60% of all the world's growth in ad expenditure is predicted to come from developing markets (defined as everywhere outside North America, Western Europe and Japan). 50% will come from just ten developing markets (5 of these are in APAC). The four BRIC markets alone (Brazil, Russia, India and China) are forecast to account for 35% of global growth.Beyond the BRICs, four other fast-growing APAC markets forecasted to add between US$1 billion and US$4 billion each to the global ad market, and deliver another 15% of global growth are Indonesia, South Korea, Thailand and India.By MediumInternet advertising by typeUS$ million, current prices Currency conversion at 2011 average rates. 20102011201220132014Display22,49727,34332,86539,43947,748Classified11,40811,12912,01112,87213,866Paid search33,76637,97543,78250,48057,773Total67,67076,44788,658102,791119,387Source: ZenithOptimediaThe internet is the fastest growing medium, forecast to grow on average by 16% a year between 2011 and 2014. Display is the fastest-growing sub-category, with 20% annual growth, pulled in from social media and online video advertising. Display advertising is now growing substantially faster than paid search (forecast to grow by 15% a year to 2014) and classified (8% a year). Display advertising accounted for 36% of internet advertising in 2011; by 2014 it is expected to increase to 40%.Social media advertising also accounted for 14.4% of internet display in 2011. This includes only the paid-for ads appearing within social media sites like Facebook, Twitter and LinkedIn; it does not include any non-paid activity by advertisers on these sites, such as brand pages and promotions, Zenith said.According to the report, a third of all internet visits in the US now go to Facebook alone."Average costs are currently lower in social media than for other types of display, partly because advertisers are still learning how to engage consumers on these sites rather than intrude upon their conversations," said a note in the report. But better targeting and new forms of advertising (such as Sponsored Stories on Facebook) helped prices rise throughout 2011 and the trend is expected to continue.