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Asia Pacific advertising approaches US$30 billion

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Asia Pacific advertising approaches US$30 billion
Double-digit growth in 2000 but outlook clouded

Auckland, May 7, 2001 – The Asia Pacific advertising market broke the US$29 billion mark following strong growth in 2000, with most countries reporting double-digit increases and faster growth than in 1999, but several markets are showing early signs of slowdown, according to latest advertising expenditure figures released by ACNielsen Media International.

ACNielsen measures advertising expenditures at published rate card values in 12 markets: South Korea, China, Hong Kong, Singapore, Malaysia, Indonesia, Philippines, Thailand, Vietnam, India, Australia and New Zealand. It reflects the health of the media and advertising industry and is an important economic indicator.

“Eleven markets reported double-digit growth and nine experienced faster growth in 2000 than in 1999. The year has been a good one but outlook for 2001 is less certain as a result of the dot-com bubble bursting and the US economy softening,” said Frank Martell, ACNielsen president for Asia Pacific.

China remained the biggest and fastest-growing market measured by ACNielsen Media International, with a worth of almost US$10 billion in 2000 and growth of 57%, made up of 36% real growth and 21% attributed to service expansion by ACNielsen. (See Table 1)

In Southeast Asia, the Indonesian market defied a year of political unrest and grew 44%. It looks set to join the US$1 billion club should the momentum be maintained.

In the Pacific, Australia rode on the back of the Sydney Olympics and a tax reform campaign to reap 15% growth, but a number of factors may hamper the 2001 outlook.

ACNielsen Asia Pacific AdEx 2000
Advertising expenditures
Growth2
US$ millions1 % 2000 % 1999
China 9,692 573 16
South Korea 5,150 24 33
Hong Kong 3,539 17 14
Australia 3,370 18 8
India 1,651 16 NA
Philippines 1,234 17 15
Thailand 1,151 23 NA
Singapore 854 23 3
Malaysia 810 24 14
Indonesia 751 45 40
New Zealand 701 5 2
Vietnam 101 31 6
Total 29,004
1. Converted at year-end exchange rates.
2. Year-on-year growth rates are based on local currencies.
3. 57% nominal growth includes 36% real growth and 21% due to ACNielsen service expansion.
Source: ACNielsen Media International

China: Local brands shine
Expenditures in China soared thanks to the strong performance of local advertisers, whose heavy investments in advertising indicated the growing sophistication of local manufacturers.

“The confidence and assertiveness shown by local enterprises are especially encouraging. They have come out of the shadow of foreign brands, whose manufacturers are infinitely more experience in marketing,” said Martell. “All top 10 advertising products are local brands. Together, they account for 7% of total advertising in China.”

International brand leader and seasoned marketer Coca-Cola ranked 20th among the most advertised products, he noted.

Australia: Clouds over the horizon

In Australia, the 18% gain was achieved on the basis of one-off spending on the Olympics and the introduction of the GST (goods and services tax).

Seasonal trends were affected by advertising leading up to, during and immediately following the Sydney Olympics, reflecting the advertising strategies of not just Olympics sponsors and partners but also other major advertisers who took advantage of the once-in-a-lifetime opportunity.

On the other hand, the GST campaign by the Australian government logged over US$20 million and became the second top “brand” during the year.

However, the 2001 outlook was marred by the recent release of weak retail trading figures, declining employment advertising volumes and a depressed currency. In addition, 2001 is a federal election year and advertisers tend to spend less pre and post elections.

Dot-com boom and bust

Dot-com advertising in offline media had a mixed year in 2000. While total expenditures went up, the market soon lost momentum following the fateful Nasdaq crash last April that triggered worldwide skepticism towards the dot-com business model.

In Hong Kong, dot-com advertising expenditures increased nine-fold to US$176 million, but took a sharp turn in the June quarter and saw the second half of the year finishing one-third lower than the first. (See Table 2)

“Because dot-coms in Hong Kong accounted for 5% of total advertising expenditures in comparison to the less than 1% share in most other markets, we believe it is a significant indicator of things to come in the region. In fact, we saw similar trends in Australia and China,” Martell said.

Table 2. Hong Kong dot-com AdEx, 2000
Dot com AdEx
US$ million
Share %
Q1 48 27
Q2 59 34
Q3 39 22
Q4 30 17
Total 176 100
Source: ACNielsen Media International

2001: Early warning signs

Initial findings from nine Asian markets show that growth during January and February was slower than that in 2000, with South Korea experiencing an 8% contraction. (See table 3)

In Thailand, advertisers were spending dramatically less. The top 5 advertisers reported total expenditures of Bhat 645 million, only half of that in the same period last year.

“It is obviously too early to say what 2001 will look like, but advertising expenditure measurements are flagging some early alerts. Growth slowed across Asia in January and February, despite advertising rate increases in some markets. Also, the negative growth in South Korea is of particular significance in the prevailing economic climate,” said Martell.

Table 3. Strong growth in 2000, but...
Growth
% 2001 (Jan-Feb) % 2000 (full year)
China 20 57*
South Korea -8 24
Hong Kong 9 17
India 4 16
Thailand 5 24
Indonesia 18 45
Singapore 3 23
Malaysia 13 24
*57% nominal growth includes 36% real growth and 21% due to ACNielsen service expansion.
Source: ACNielsen Media International

ACNielsen Media International, a unit of ACNielsen, is the world leader in international media research and analysis. The company is active in more than 40 markets, offering television and radio audience measurement, advertising expenditure measurement and print readership services.

ACNielsen, a VNU company, is the world’s leading market research firm, offering measurement and analysis of marketplace dynamics, consumer attitudes and behavior, and new and traditional media in more than 100 countries. Clients include leading consumer product manufacturers and retailers, service firms, media and entertainment companies and the Internet community.


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