Analysis: Industry players in HK optimistic about ad spend recovery

Local adspend has been recorded to have a steep month-on-month increase of 18.5%, after the HKSAR government announced further relaxation of social distancing measures in early May, said a recent study by Admango. 

Adspend of all major media outlets have recorded notable month-on-month growth, with TV adspend rising in April and May by 7.6% and 9.3% month-on-month respectively. Meanwhile, mobile adspend went up by 1.8% in April, and 23% in May; social media even recorded a 4% year-on-year increase from March to May, and a 19.3% and 17.5% month-on-month increase in April and May respectively.

The report added that across all industries, there was a rise in adspend. Ranking at the first place, was adspend in the banking and investment services sector which saw an increase in month-on-month spend of 21% in May, with a total adspend from March to May similar to the same period last year. HSBC Group and Citigroup, which ranked first and sixth place in the "top 10 advertiser groups", with an increase of 64% and 33% in May respectively.

At the second place was adspend of pharmaceuticals and healthcare which went up by 17% in May; within which condoms and birth control products' adspend increased by 263% - the highest increase in the industry.

Furthermore, the adspend of toiletries and household rose 36% month-on-month in April, and 40% month-on-month in May. The subcategory tooth and oral Products, which accounted for the highest proportion of adspend in the industry, recorded an increase of 67% and 64% in April and May respectively, according to the report.

Commenting on the trend, Ken Cheung, co-founder and digital director at KREW DIGITAL, said local adspend normally saw a rise after CNY in the past, yet it is interesting to note that a variance was found in 2022. "With the resurgence of COVID after CNY, there was a renewed sense of caution while advertisers decided to call off and put plan on hold in the face of continuing uncertainty," he added.  Nonetheless, Cheung also witnessed a significant increase in adspend in April with the drop of local confirmed COVID cases, adding that local marketers attempted to seize the chance and capture the uprising consumption power during the Easter period. 

Banking and investment services have always been regarded as big spenders in the ad world, while a more comprehensive plan with splendid ad budget could be expected to cost a longer period to plan, said Cheung. He added that when the marketing activities resumed to near normal levels, banking and investment industry was not an exception.

Marketers from the industry audited campaign contents with significant budget and rolled out a bit later than other industry. 

"The scale of banking and investment campaign revealed a strong confidence on economic recovery, for example HSBC featured with uprising girls group Collar and Citi featured with Ian Chan of Mirror, Hins Cheung and Leon Lai.Splendid media buying must be incurred." Cheung added. 

Echoing his sentiments was Jeffrey Hau, director at PRIZM Group HK, who said due to the easing of the pandemic, brands have resumed new product launch campaigns that were being suspended amid the peak of the fifth wave in February and March this year.

"In my opinion as for the banking and digital finance industry in general, the Consumption Voucher Scheme is one of the many drivers for the increase in media spend. Also, the increase in ad spend applies to both OOH and DOOH channels, when consumers were finally back again on the streets after a prolonged period of WFH." Hau added. Hau speculated the increase in media spend might be credited to the higher penetration of eCommerce sales for these sectors, "The pandemic has given many brands a push on transforming a good portion of their revenue stream to eCommerce during the pandemic, and were more open on experimenting performance media buy." he added.

Commenting on the increase in adspend on retails, toiletries and cosmetics industries, the Au Wai Chung, general manager of media line of business and David Chan, head of trading and partnerships of media line of business from dentsu said that with the introduction of consumption vouchers, most of the advertisers in these categories do increase the spending during the period to capture the share of the pie.  Also, with many advertisers in Hong Kong using celebrities such as Mirror in the cosmetics and toiletries industries, the category players spent more heavily to secure share of voice against competition.

With the increasing uncertainties under the pandemic in Hong Kong, Au and Chan believed that advertisers will continue to focus to drive the share of spending from local HongKongers, "With the second batch of consumption vouchers to come in August and with the possibilities of change of the receiver of the consumption vouchers, it is expected the increase in spending in the related categories. Advertisers are optimistically conservative and still is reserved on the spending in Q4 and hopefully another spike will happen in the last quarter of 2022." they added. 

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