SUBSCRIBE: Free email newsletter

Marketing

Toggle

Article

Causeway Bay rush in Hong Kong island

Online advertising in Hong Kong to surpass TV as digital ad revenue soars

It really was just a matter of time before online ad spending finally overtook TV and new data from PwC shows that in 2016, global internet advertising revenue will overtake broadcast TV revenues for the first time, with Hong Kong to follow suit in 2017.

PwC’s latest Entertainment and Media Outlook 2016–2020 gives a wide-ranging view of the state of entertainment and media both globally and in Hong Kong. While this year’s report paints a rather gloomy portrait of the traditional media sectors, there are some very positive signs emerging.

But first the not-so-positive.

It won’t come as a great surprise to many to see that online advertising has been one of the key drivers for entertainment and media in Hong Kong since 2011. That trend is set to accelerate in a significant way, 10.6% annually, according to PwC and will reach US$1.07 billion by 2020.

That growth will come at the expense of traditional TV, a market PwC described as “stagnant”, despite its maturity and a subscription TV penetration of some 84%.

PwC data shows TV advertising revenue fell 9.2% in 2015 to US$732 million and further losses are expected this year. TV will however return to growth in 2017 and the TV ad market will reach US$825 million by 2020.

TV’s stagnation is driven by a shift to digital and mobile consumption and over-the-top (OTT) services like Netflix and Apple TV.

Cecilia Yau, PwC Hong Kong and China Entertainment and Media partner, said it was no great surprise that online would overtake TV ad spending, given the overall state of Hong Kong’s retail market and declining tourism from Mainland China.

“It’s a sooner or later type situation,” Yau said. “TV networks can’t hide behind the lucrative retail advertising dollars anymore. TV in Hong Kong is going head-to-head with digital for advertising dollars.”

Like TV, significant losses are expected to continue for Hong Kong’s newspaper industry, forecast to fall by 5.4% annually to US$662 million in 2020, down from US$874 million in 2015. Globally, total newspaper revenues and advertising revenue have been declining since 2012.

So, where’s the positive?

This year’s report has identified three segments with the highest forecasted annual growth until 2020, namely internet advertising (10.5%), music (5.9%) and video games (5.6%), with a out-of-home advertising also a surprise performer with annual growth of 4.5% expected.

“Hong Kong has one of the world’s highest mobile penetration rates, but advertising dollars have transitioned slowly because of limited applications to support mobile payments compared to China’s mature M-commerce sector. The emergence of social media TV and high video consumption are attractive avenues for advertisers to grow dollars and a captive consumer base,” said Wilson Chow, PwC China and Hong Kong TMT leader.

The video segment is growing quickly. By 2020, Hong Kong’s mobile video internet advertising market will account for 35.7% of total mobile display internet advertising revenue, proving a very effective medium for advertisers to a targeted audience.

Regionally, China is comfortably the largest internet advertising market in Asia, with Japan in second place. Globally, China is the second-largest market after the US with 15% of global internet advertising revenue valued at US$23.2 billion in 2015, behind the US with 38.8% of revenue share.

Read More News

Trending

Leave a Reply

You must be logged in to post a comment.