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Singapore, Malaysia, Thailand among Asia’s slowest growing ad spend markets, says Magna report

Singapore, Malaysia and Thailand are among the slowest growing ad markets in the region while India, Pakistan and Sri Lanka are among the fastest, according to the June update of the ‘Global Advertising Forecast’ report from Magna, the market intelligence unit of IPG Mediabrands. 

India and Pakistan are expected to grow by 15% in 2019 and Sri Lanka at 14%. On the other hand, Malaysia and Thailand are expected to clock 2% growth in 2019 while Singapore grows at just 1%. In many markets in the region – prominently India, Sri Lanka and Pakistan – cyclical events like elections and the cricket world cup are boosting advertising spends.

The Asia-Pacific region is expected to see ad spend increase by 7.4% in 2019 to reach US$186 billion, according to Magna estimates.

This will be aided by an increase in linear advertising by 0.4% in 2019 and digital growth of 15.9%. Linear advertising revenues are still growing in the region; they are expected to be negative in Europe, Middle East and Africa as well as North America.

The Asia-Pacific region is expected to increase its share of the global advertising market from 31% to 33%. by 2023.

Here are some of the highlights for the Asia region according to the report, including projected ad spend growth in 2019 and 2020:

Singapore: 2019: 1.2%; 2020: 2.3%

Singapore’s advertising sales are expected to stabilise and recover by 1.2% in 2019, following three years of decline. This will bring the total Singapore advertising economy to S$2.2 billion (US$1.6 billion). In 2020, the advertising economy of Singapore will increase by +2.3% to reach S$2.3 billion. Digital advertising formats will increase by +21% in 2019, led by strong growth in social, video and search.

2019 is Singapore’s bicentennial year, and there will be additional ad spending from the government as a result. While this will be a tailwind for print, radio, and OOH, print will still decline nearly as severely as last year, and radio will decline by 5% compared to growth in 2018.

Without the bicentennial, declines would be even more severe.

Malaysia: 2019: 1.5%; 2020: 3.0%

Malaysia’s advertising revenues will increase by 1.5% this year, slightly stronger 2018’s 0.8% performance, and marginally ahead of prior expectations.

In 2020, Malaysia’s advertising economy will increase by 3.0% to reach MYR 5.4 billion (US$1.3 billion). Television advertising revenues will decrease by 3.2% in 2019, as they did in 2018.

Digital advertising formats will increase by 13% in 2019 to reach a third of total budgets.

The relatively slow growth is reflective of brands that are still reluctant to transition to digital. Many brands are spending on these formats for the first time in the past year or two. Growth has also been affected by a newfound focus on brand safety and viewability.

Newspaper readership continues to decline, and advertising revenues will decline this year by 10%. Newspaper advertising still commands 20% of total brand budgets, however, one of the highest global totals.

China: 2019: 10.3%; 2020: 7.2%

China’s advertising economy will grow by 10.3% this year, slowing down slightly from 2018’s 12.0% growth rate. This will bring the total market to CNY 560 billion (US$85 billion), the second largest advertising market globally.

In 2020, the Chinese advertising economy will increase by 7.2% to reach CNY601 billion (US$86.8 billion).

Digital media remains the engine of growth in China, registering an increase in digital advertising sales by 17.3% to reach CNY362 billion (US$54 billion). Digital formats now control a massive 65% share of total advertising, the third highest market share globally (behind Sweden, and the United Kingdom).

In 2020, digital advertising spending will increase by 12.6%, slower than this year’s 17% growth, but still strong, especially since digital advertising will surpass two thirds of total advertiser budgets in 2020. This will bring the total digital market to CNY407 billion (US$61.5 billion), larger than in any market except the US.

India: 2019: 15.2%, 2020: 13.1%

India remained the fastest-growing large ad market in 2018 (14.3%) and will accelerate further in 2019 (15.2%).

Growth was led by digital and television advertising that grew by 36% and 13.9%. Overall ad spend will rise from Rs689.6 billion (US$10.1 billion) to Rs794.7 billion (US$11.6 billion).

Speaking about the forecast, IPG Mediabrands Asia Pacific CEO Leigh Terry said: “Asia-Pacific is suffering the same economic concerns that are present in much of the rest of the world, but the growth baseline is still higher than most developed regions in the west.

“We expect to see the region continue to increase its share of global advertising spend to 33% by 2023.”

Magna Asia-Pacific managing director Gurpreet Singh added: “Share of digital spend is increasing and likely to hit almost half of the total spend in Asia-Pacific, and
around two third in China this year.

“This is largely due to the continued double digit growth in digital spend and further decline in traditional media spend in the majority of markets.

TV remains strong in South Asia and some big South East Asia markets. In most other markets, TV is fast losing share in total ad spends as a result of a continual loss of viewership. TV viewership is not really dying, content consumption is just moving from linear TV to online video and non-linear TV (OTT) as technology is creating more accessibility to high quality content choices for consumers.”

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