APAC ad spend to hit US$250bn in 2022, sporting events a key driver

Asia Pacific ad spend is expected to grow 5.1% to US$250 billion this year, US$35.7 billion more than pre-pandemic levels (2019). According to dentsu’s latest ad spend report, digital accounts for 60.7% of the region’s overall ad spend (US$151.7 billion). Key sporting events such as Indian Premier League, FIFA World Cup, Beijing 2022 Winter Olympics and Paralympics, as well as country elections in Australia and India, are expected to boost the overall ad spend growth in APAC this year.

Digital is the fastest growing medium (+11.5%), fuelled by the double-digit growth of programmatic (+32.3%), paid social (+27.4%), and digital display (+13.3%) in 2022. However, TV spend still holds the largest share of ad spend in Southeast Asia (57.2%), with a growth rate of 4.6%. Technology, automotive and cosmetics and personal care are also among the fastest growing sectors in the APAC region.

This year will also see India (+16.0%), Malaysia (+11.0%) and Hong Kong (+10.1%) achieve double-digit growth, Prerna Mehrotra, CEO, media APAC, dentsu international said. “Advertisers increase focus and resources into eCommerce, display, and search budgets to respond to the new consumption habits. Marketers need to better understand their audiences and meet their needs with relevant messaging as online behaviour surges in Asia,” she added. 

Mehrotra also explained that marketers can use first-party data to identify the most profitable customers, along with third-party data to target the prospects in the most efficient channels, to drive efficiency and manage costs.

China is predicted to clock the highest ad spend in the APAC region this year (US$130.2 billion), with a growth of 5.6%. Digital, which makes up 75.8% of the market's ad spend, is projected to increase by 10.9% in 2022 with high growth for eCommerce (+12.5%).

The key sectors driving digital ad spend in the market are cosmetics and personal care and technology. China's ad spend is also forecasted to grow by 4% in 2023 and 5.4% in 2024. 

Meanwhile, India is expected to be the fastest growing market (+16%) with a projected ad spend of US11.1 billion led by TV (+14.5%) and digital (+31.6%) growth. Digital, at a 33.4% share of ad spend, will be the key medium for digital first brands and consumer tech companies in 2022, followed by TV (41.8%).

The easing of lockdown restrictions has opened up categories such as travel and hospitality which were not spending during the pandemic. Categories including edutech, fintech, gaming and cryptocurrency have shown growth on OTT platforms. Looking ahead, significant growth is forecasted in OTT, connected TV, online gaming, and eCommerce. India's ad spend is also projected to grow by 15.2% in 2023 and 15.7% in 2024. Globally, the US will have the highest ad spend in 2022. However, India is expected to be the fastest growing market, followed by the US and Brazil.

According to the report, OOH (+11.5%) and cinema (+19.6%) will see double-digit growth globally this year. Radio is also expected to grow much faster (+5%) than initially predicted earlier this year (+2%), primarily due to a faster return to office working. Meanwhile, ad spend in newspapers and magazines will continue to decline.

Industry wise, the technology sector is forecasted to have the greatest growth globally this year (+11.3%), due to people’s greater reliance on digital devices. Retail will also see a significant growth rate of 11%, driven by a number of factors including the significant growth of eCommerce, the entry of new players, and the introduction of emerging retail platforms, the report stated. MARKETING-INTERACTIVE has reached out to dentsu for Southeast Asia and Hong Kong specific statistics.

Looking ahead, dentsu expects the 2023 global advertising market to increase by 5.4% to reach US$778.6 billion followed by a further 5.1% increase in 2024, Mehrotra said. “However, continued lockdowns in key markets, geo-political tension and ongoing supply logistics issues could add pressure on businesses with a cascading impact on marketing spends,” she added.

Meanwhile, Peter Huijboom, global CEO, media and global clients, dentsu international said that despite global economic uncertainty, brands are continuing to prioritise their spend in channels which will give them both the digital-flexibility and return they seek. “Even with everything which has happened in recent months, not least the protracted war in Ukraine and its international repercussions, the advertising recovery remains strong on a global scale,” he added.

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