Study: APAC ad spend to grow by 5.9%, expect more data collaborations

Ad spend in Asia Pacific is predicted to grow by 5.9%, with digital forecast to increase 9.6% to a share of 61.1% of total ad spend in the region, equivalent to US$150 billion. According to dentsu's global ad spend forecast report, this is over twice as big as the TV share of spend (24.5%) in 2022. This growth in digital investment is fuelled by social and programmatic in Asia Pacific and follows a 24.8% increase in 2021.

Linear TV ad spend increased by 5.1% in 2021, the highest rate since 2013. This year, ad spend for this segment is expected to grow by 1.4% to reach US$60 billion in Asia Pacific. Unlike digital and despite staying in high demand, dentsu is witnessing linear TV share of spend on the decline, both globally and regionally, as connected TV and video on demand grow.

Meanwhile, OOH and cinema are expected to grow 2.8% and 30.0% respectively in Asia Pacific this year. This is compared to a respective 12.8% and 23.4% growth globally, which dentsu labelled as "encouraging". While radio is also forecasted to grow, it will do so at a slower pace of 1.5% in Asia Pacific versus 2.0% globally. As with previous predictions, ad spend in newspapers and magazines will continue to decline in Asia Pacific and globally.

Prerna Mehrotra, CEO media APAC, dentsu international said, ad spend in Asia Pacific is predicted to grow 5.9% in 2022 with India, Hong Kong and Vietnam seen delivering double-digit growth and rest of region also estimating an optimistic outlook through the year. The share of digital spend is set increase to 61.1%, up from 50.1% in 2019, driven mainly by Greater China, ANZ and Korea. "TV as a platform continues to play a key role, especially in Southeast Asia and South Asia," she added.

Mehrotra said marketers will need to be nimble, leaning on technology and maximising opportunities in video, social, connected TV and eCommerce. "The use of data to drive business outcomes without compromising privacy or security will continue. We expect data collaboration to be a big focus in 2022. In light of the ongoing global turbulence and recovery, we will continue to work with brands to accelerate efforts in engaging consumers and driving attentive reach,” she added.

The year 2022 is projected to build on a stronger than expected recovery in 2021 which itself saw a record-high 14.4% growth in Asia Pacific, totalling US$241 billion. This marks a second consecutive year of growth for the region following the 5.0% market dip in 2020. Overall ad spend growth in Asia pacific this year is boosted by key sporting events such as the Indian Premier League, FIFA World Cup, Winter Olympics, and country elections in Australia and India.

When compared to previous global financial and advertising crisis, notably the financial crash of 2008, this rebound is almost three times greater. According to dentsu, the growth forecast at 9.2% in 2022 is nearly three times the 3.4% growth in 2011 – second year post global financial crisis. This year also sees the global ad market exceed the 2019 pre-pandemic level of spend by 18.7%, whereas in 2011 the global ad market continued to be 1.0% lower than in 2008.

Globally, the travel sector is expected to see a 10.3% rise in ad spend this year, while automotive ad spend is predicted to jump by 7.6%. This growth follows a 11.5% increase in 2021 and steep declines in 2020 of -15.9%.

Looking further ahead, APAC ad spend is predicted to grow by 5.6% versus 4.6% globally in 2023 and 4.9% versus 5.8% globally in 2024 – exceeding the 4.1% growth before the pandemic. Digital is forecast to increase its share of spend domination to 64.6% in Asia Pacific versus 59.4% globally in 2024. However, there are many factors contributing to the uncertain economic outlook that could influence the predictions, from the evolution of the pandemic to supply chain issues.

Peter Huijboom, global CEO media and global clients, dentsu international said: "The bounce back from the early pandemic impact continues to be strong, especially in digital. As we spend more time consuming digital media, brands have the opportunity to tap into the increased flexibility in which consumers engage through multiple touchpoints. Businesses who truly understand these developed human behaviours have the best opportunity to build lasting relationships with them."

Here are the three Asia Pacific markets that dentsu focused on in its report.

China

Ad spend in China is expected to rise 28% this year up from US$28.8 billion in 2019. Digital and OOH aside, all other linear media, however, will continue to have some way to go before recovering to pre-pandemic levels, dentsu said.

China's ad market is expected to see a 6% year-on-year growth to reach US$130.2 billion, boosted by an estimated US$1.1 billion of Beijing 2022 Winter Olympic and Paralympic Games ad spend. Digital will contineu to drive growth at 9.3% and account for more than a 74% share.

After 10 consecutive years of decline, print is expected to return to growth this year with newspapers estimated to increase by 3.6% and magazines by 2.4%. Key sectors for print include travel, pharmaceutical, and finance. While TV continues to be the second most prominent media, it faces fierce competition from new media and audience declines. Linear TV is expected to decline by 4.2% in 2022 with the share of spend forecast at around 15%.

The outlook for the China ad market is positive growth of 5.3% in 2023 and a further 5.2% in 2024.

Japan

A 3.5% growth is expected for Japan's ad market to account for US$61 billion. This follows a gradual and consistent increase of 4.7% in 2021 revised up from the previous prediction of +4.4% in the June 2021 report led by increased growth in digital (+15.1%) and TV (+8.0%) ad spend.

This year, digital forecast is predicted to grow at above market rate of +7.2% though returning to single digits to account for a leading share at US$25.1 billion. ECommerce, social, and video ad spend are expected to continue their upward trend. Expenditures in digital advertising carried by traditional media will also drive growth, such as CTV.

Overall, consumer spending is expected to rise with declining COVID-19 infections, increased mobility, and pent up demand. Dentsu predicts the ad market to make a full recovery by 2023 as Japan's economy grows.

India

Labelled by dentsu as one of the fastest growing markets in terms of ad spend, 

India's ad spend is expected to exceed 2019 pre-pandemic levels in 2022 by 18% (US$1.7 billion) led by linear TV and digital. Linear TV remains the most popular and resilient media in India with a 40% share of spend, dentsu said. Ad volumes for this segment continued to post healthy growth beginning H2 2021, as marketers leveraged the reach and power of TV to raise their brands' profiles.

Linear TV ad spend recovered fully last year and according to dentsu, will report healthy growth of 10% in 2022. At the same time, the digital industry has benefited immensely from the shift in consumer behaviour during the pandemic.

Video-led platforms, whether they are OTT or short video platforms, are seeing strong demand from advertisers. The presence of high impact properties on digital across sports and entertainment domains will only fuel the rise in digital ad spends further in 2022.

Digital at 34% share behind TV spend is forecast to grow at the highest rate of 30% this year in India. Print media also remains popular in India due to its low cover price and ability to deliver original and credible content to a population that has formed the habit of reading a physical newspaper.

Meanwhile, newspapers accounting for US$2 billion and 20% share are forecast to grow by 4.5% in 2022. THe ad market is also looking buoyant driven by corporate and retail spending and is expected to continue to growth by double digits in 2022 and 14.6% to account for US$211 billions of ad spend globally. India's ad spend growth trajectory is predicted to continue into 2023 and 2024 at 15% year-on-year.

(Photo courtesy: 123RF)