Zenith: Southeast Asia share in internet ad spend set to rise in 2018

The effectiveness of internet advertising has caught up with digital adspend, as seen in the increase of Internet ad spend share in markets such as Singapore, Malaysia and Indonesia. This was according to Zenith's recent "Advertising Expenditure Forecasts".In Singapore, Internet share of ad spend in 2017 is at 19.6%, with 18% growth in Internet advertising expected in 2018. Meanwhile, growth in total advertising is expected to be 3.6% in 2018, and Internet share in adspend is expected to be 28.7% by 2020.Singapore falls under the region termed “Advanced Asia” in the report, which saw ad spend slipping back to an estimated 1.6% this year, as compared to its 5.3% growth in 2015. According to Zenith, the dip is expected to be the lowest, and 3.1% annual growth to 2017 is forecasted. This is fractionally above the 2.9% average growth rate since 2012.In Malaysia, internet share of ad spend in 2017 is at 24%, with 30% growth in internet advertising expected in 2018. Meanwhile, growth in total advertising is expected to be 1.4% in 2018, and internet share in adspend is expected to be 44.9% by 2020.In Indonesia, internet share of ad spend in 2017 is at 29%, with 34.4% growth in internet advertising expected in 2018. Meanwhile, growth in total advertising is expected to be 12% in 2018, and internet share in adspend is expected to be 44.7% by 2020.Malaysia and Indonesia fall within the region termed “Fast-track Asia” in the report, which is characterised by rapidly growing economies. These countries are increasingly adopting Western technology, practices and new innovations, while benefiting from rapid inflow of funds from investors. This region comprises of other countries such as China, India, Pakistan, Philippines, Taiwan, Thailand and Vietnam.The report explained that Malaysia’s recovery from the downturn of 2016 was less rapid than anticipated, and the extended period of mourning for King Bhumibol Adulyadej has led to a second year of decline for Thailand. The Chinese economy, which is seen as the main engine of growth in Fast-track Asia, is also reportedly slowing down after years of blistering growth, with the ad market slowing alongside it.Fast-track Asia is expected to grow 7.6% in 2017, and at an average rate of 6.4% a year between 2017 and 2020. According to Zenith, this is less rapid than the growth in Eastern Europe and Central Asia, but Fast-track Asia is 10 times larger, and as such contributes more significantly to global adspend growth. The region “barely noticed” the 2009 downturn, according to the report, and saw ad expenditure growing by 7.8% in that year. It has since grown very strongly, ending 2016 up an estimated 9.0%.Globally, Zenith predicts that ad expenditure will grow 4.1% in 2018, reaching US$578 billion by the end of the year. The forecast is said to be “fractionally below” the 4.2% rate Zenith predicted for 2018 in September. This is with marginal downgrades in Asia Pacific, North America and Western Europe, with upgrades in Latin America and Central & Eastern Europe. Overall, advertising expenditure is expected to grow more slowly.