The global advertising industry is experiencing its strongest growth since 2010. Ad sales are driven by robust economic growth in the US and BRICs. Advertising sales in Hong Kong will increase by 4.2% in 2019 to reach HK$27.2 billion, yet digital formats still only represent 25% of total budgets, far below many similar markets, according to the latest report.
The latest MAGNA report reveals that global advertising revenues grew by a record of 7.2% in 2018 to reach a total of US$552 billion in 70 countries analysed by MAGNA. Global ad spend remains strong (US +7.5%, China +12%, Russia +14%, India +14%) thanks to robust economies and US$6 billion of cyclical spend, while Western Europe lagged behind due to economic slowdown and political uncertainty.
The report also finds that digital advertising sales grew by 17% in 2018 – 1.5% above previous forecast - to reach US$251 billion or 45% of global advertising revenues, driven by search (+16%), video (+29%), and social media (+33%). Non-digital ad sales (linear TV, linear radio, print, and out-of-home) were flat (+0.2%) at US$301 billion.
MAGNA increases its forecast for 2019 advertising growth to 4.7%, as the macro-economic environment is expected to remain strong in most of the top advertising markets (e.g. US, China, India).
Digital advertising growth will slow down next year (+13%). However MAGNA predicts that digital media ad formats will attract half of the world’s total ad dollars as early as 2019 or 2020.
In 2019, MAGNA predicts advertising sales in Hong Kong will increase by 4.2% to reach HK$27.2 billion, following 2018’s 4.9% growth. Television will grow by 2.2% in 2019, a slowdown from this year’s 5.8% performance, but still better than 2015 and 2016’s decline. Connected TV services and online television like myTV Super is gaining traction in Hong Kong, but growth is coming from a low base.
Like many markets, digital formats are the engine of growth, and will increase by 21% in 2019. Despite the high growth, digital formats still only represent 25% of total budgets, far below many similar markets. The majority of digital spend is in video, with strong growth in app environments.
In Hong Kong, print retains a 21% share of budgets, the 6th highest total globally, behind newspaper share leader Austria. Furthermore, while newspapers and magazines are seeing decline, print properties are still doing well in Hong Kong as many have successfully transitioned their business models online, especially premium fashion properties and international titles like Hearst Publications and the New York Times.
MAGNA predicts APAC advertising to increase by 7.1%, to reach US$177 billion. Growth will be only slightly slower than 2018’s 7.7% growth rate, but higher than prior expectations (6.0% in June 2018).
Growth in APAC is led by digital advertising formats, which will increase by 16% in 2019 to reach US$81 billion, representing 46% of total ad sales. Within digital advertising, mobile formats are significantly outperforming desktop formats (26% mobile spending growth expected in 2019, compared to 4% desktop spending decline).
Spend in APAC is concentrated as almost two thirds of total ad spend occurs in China (42% of total spend) and Japan (23%). However the fastest-growing markets in 2019 will be in the Indian subcontinent - Sri Lanka, India, and Pakistan. On the other end of the spectrum, Singapore (+1%), Malaysia (+1%) and New Zealand (+2%) will show little or no growth in 2019.
Gurpreet Singh, managing director MAGNA APAC, said: “The battle for share of ad spend continues between TV and digital across most of the APAC markets. There is a clear movement towards digital across the spectrum, including most of the TV dominant markets. While TV growth is low to negative in the vast majority of markets except South Asia. This is mainly due to TV losing audience and consumption which is continuously increasing for digital. TV is not only losing audience to digital but also to non-linear TV which sits right at the cusp of TV & digital - it will be interesting to watch this space as it develops for advertising in APAC.”