GroupM backs strong growth

Hong Kong - Media buying network GroupM is predicting an aggressive 11% growth in advertising spend in 2008, up from 8% this year, with the buoyant economies of China and Hong Kong driving the growth.

A new study from GroupM, This Year, Next Year, predicts that advertising spend around the region will jump 11%, with growth from China up 28.8%, from 18.8% this year.

The GroupM forecast follows recent comments from Patrick Stahle, CEO Aegis Media Asia Pacific, who tipped a strong 9.5% growth in ad spend around Asia in 2008, driven largely by growth in digital media and the Chinese economy.

The GroupM report predicted that worldwide, ad spend will grow 7% to US$479 billion, following an anticipated 6% increase in 2007.

This year, the study predicts that Hong Kong will overtake the United States on a per capita spend.

"We expect Hong Kong to return the highest per-capita media spend this year, at US$568, displacing long term leader the USA with US$537. Both are well ahead of Western Europe, which is expected to turn in US$284 million," the report said.

Among traditional media, TV will continue to be the main engine of advertising growth in the 20% of the 'developing' global advertising economy, but around the world, and particularly in China, online growth with be a strong driver.

Internet ad spending is expected to exceed 10% of global ad investment in 2008 for the first time ever and search will comprise 65% to 70% of measured online advertising in 2008, up from 50% in 2005.

In another first, Sweden's online advertising spend is expected to exceed TV, with the UK and Denmark to be the next in line.

Online growth in China is tipped to jump 58.1%, with Hong Kong online ad market up 25% HK$1.75 billion.

Overall, next year's spending expectations largely reflect the Olympics and the U.S. election. It is anticipated that the Games will bring US$1 billion in ad spending to national TV and $200 to $300 million to local broadcasters.

GroupM Futures director Adam Smith, who oversaw the study, added that spending on marketing services such as sponsorship and public relations is growing at a faster rate than it is for traditional advertising.

"The main geographic contributors to growth next year are predicted to be China, with 21% of all new money, and Russia and Brazil with each contributing six percent," Smith said.