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Occupy Central could be another SARS for Hong Kong if protests drag on, warn industry experts

Billboards covered with political messages at Admiralty on Tuesday night

Billboards covered with political messages at Admiralty on Tuesday

Hong Kong’s advertising industry is holding up against a chaotic backdrop of pro-democracy protests, with no major campaigns cancelled, although some media buyers fear a decline in media spend is “inevitable” if the unrest continues.

One agency executive told Mumbrella that some businesses, particularly in the luxury and retail sectors, fear that Occupy Central could have the same impact as SARS – the epidemic that shook Hong Kong just over a decade ago – with advertising activity hit as a result.

Steve Blakeman, the APAC CEO of media agency OMD, told Mumbrella: “The stock market in Asia has already witnessed a slump, particularly against Hong Kong exposed shares. We have seen plenty of examples of the negative impact of civil unrest in recent years from Middle Eastern markets such as Egypt and also much closer to home in Thailand. The media industry will inevitably be affected in Hong Kong.”

Lilian Leung, the boss of IPG Mediabrands Hong Kong, said that advertising around social media is mostly likely to be put on hold, as brands get cautious about communicating their messages at such as sensitive time. A number of her clients have been looking to re-schedule their campaigns, but there have been “no major cuts in advertising yet,” she said.

Kevin Huang, the CEO of Hong Kong-based online advertising firm Pixel Media, said that while he has seen a huge surge in web traffic this week – in the case of one mobile news app it has doubled – advertisers are playing a cautious hand.

“Advertisers are taking a conservative approach, with some deciding to postpone campaigns as it is not viewed as the right time for a new product launch,” he said, pointing to the retail, finance and luxury goods sectors as being the most heavily affected sectors.

David Ko, the MD of digital marketing agency The Daylight Partnership, says the impact on some local businesses is reminding them of SARS, with restaurant owners in the protest areas saying sales have fallen by between 30-70 per cent this week. If the protests continue in the coming weeks, there will be a “big impact” on advertising activity in Hong Kong as marketer confidence wanes, Ko said.

There is a particular worry for the luxury retail sector, which was in a state of decline before the protests began on Sunday, Ko noted. Retailers are worrying that Occupy Central could trigger a “domino effect” of business retraction, with a fall in marketing activity a probable side-effect.

However, Ko said he is optimistic that Hong Kong will bounce back. “Hong Kong is a very resilient market. If a certain individual resigns or concessions are made, Hong Kong will bounce back very quickly,” he said.

But even if the market does rebound, Occupy Central has already dampened trade for Golden Week, one of the busiest weeks of the year in Hong Kong for consumer activity. “The major damage for the year has already been done,” he said.

The initial impact of Occupy Central has been seen by the co-opting of advertising billboards as platforms for political messaging. Protesters defaced a number of Jimmy Choo billboards on Sunday night, prompting outdoor ad firm POAD to take down the billboards and leave them empty.

Defaced Jimmy Choo poster

Another early impact was on the industry was staff levels, with some company bosses giving their employees the option to skip work to attend the protests.

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