Rose Major, on 14-09-2008
Advertising growth in the Asia-Pacific region will slow markedly in 2009 after a similarly slow year in 2008, according to new analysis from Media Partners Asia. Rising by just five per cent in 2009 after 7.1% growth this year, next year will see the lowest ad revenue growth in the region since 2003.

MPA has issued downgrades on a number of markets including China and India, but adds that the pace of growth across much of the region is likely to still be “robust”.

“There are risks to the forecasts in both India and Southeast Asia but it is the marked softening of growth in Korea and Japan that remains a key concern,” said Vivek Couto, director of research and content at MPA.

MPA’s forecasts have advertising revenues in “emerging Asia”, which excludes Australia and Japan, rising by 10% next year, driven by China, India and Indonesia. China will grow by 13.2% in 2009 against 23.1% in 2008, with this year buoyed by the Beijing Olympics.

Growth in India, which stood at 22% in 2007, is expected to fall to 17.8% in 2008 and then further, to 13.2% in 2009. The sector has seen spends in key sectors such as automotive, property, online and travel, decline, while FMCG have also been “softening”, says MPA. Other key sectors seeing little growth are retail, banking and insurance.

But even “bleaker”, says MPA, are prospects for Japan and Korea, where “in spite of much hope, positive effects of the Olympics have failed to cover up inherent weaknesses. A struggling economy continues to erode any scope for ad growth among the four main media in Japan and even internet advertising, so resilient and dynamic until now, has begun to soften in the market.”

In Korea, emphasis is also being put on diversification into non-advertising dependent revenue streams such as content distribution and communications services. Ad growth is trending at 4-4.5% per annum.

One bright spot is Indonesia, with growth forecast to trend at 13-14% over the next two years. MPA quotes Nielsen, which says advertising overall grew by 24% in the first six months of this year “reflecting strong consumption” with TV ad spend growing 17%.

Source: Rapid TV News 2008

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