MPA Projects Lower Asia-Pac Ad Revenues

HONG KONG: For the first time since the 1998 financial crisis, advertising revenue in the Asia Pacific will fall this year, according to Media Partners Asia, by 1.1 percent, but will rebound to a 5.3-percent growth rate in 2010.

"The gap between perception and reality is closing fast, with ad demand deteriorating in key markets, depressing earnings for media owners," said Vivek Couto, the executive director of MPA. "A sustained recovery is unlikely without a strong pick-up in the global economy, expected to occur next year."

MPA had previously forecast a 1.5-percent growth rate for the region, but had to revise its estimates due to weaknesses in the Japanese, Indian and Chinese markets. Further fallout in India and declines in the Australian market could result in a bigger reduction in the region’s adspend this year.

In 2008, ad revenues in the Asia Pacific gained 3.4 percent, versus 6.7 percent in 2007. While growth was strong in China, thanks to the Beijing Olympics, the ad market was weak in Australia, Korea and Japan in the fourth quarter, while India, Hong Kong and Singapore also reported reduced gains. Excluding Australia and Japan, however, the market grew by 11.1 percent last year, but MPA expects growth to slow to 4.2 percent this year, before rebounding to 9 percent in 2010. 

Online media will continue to be a driver, with 13 percent growth this year, down from 20 percent in 2008, and an increased share of 12.7 percent from 11.1 percent, led by Japan, Korea, China, Taiwan and Australia. Terrestrial TV advertising, meanwhile, which accounts for more than 70 percent of the ad pie in the region, will fall by almost 5 percent, while pay-TV growth will slow to 6.7 percent from last year’s 15.1 percent.

China will lead growth in the region this year with a 9.1-percent gain in advertising, down from 20.6 percent last year, rising to 13.3 percent in 2010. Indonesia will experience an 8-percent gain this year and 8.6 percent next year. Vietnam, too, which experienced a 15.2-percent rise last year, will show a 7.9-percent gain in 2009 and 14.7 percent in 2010. India, meanwhile, where adspend rose by 14.4 percent last year, will see increases of 7.2 percent this year and 9.3 percent next year. Singapore, where ad revenues were flat in 2008, will experience the biggest decline in the region, of 8.5 percent, with just a 2.2-percent rebound in 2010. The Philippines will continue to post modest growth, of 2.1 percent this year and 4 percent next year. In Australia, with revenues up just 2.9 percent in 2008, will record a 5.3-percent decline before a 2.9-percent increase next year. The slump continues in Japan, which was down 4 percent last year, with a 5.9-percent reduction forecast for 2009 and just a 1.4-percent increase in 2010. In Korea, a 1.9-percent fall is predicted for this year, with a 3.1-percent gain in 2010. Malaysia is expected to be relatively flat with just a 0.6-percent fall following 2008’s 7.2-percent boost and a projected 4.9-percent gain next year. New Zealand, too, will be comparatively stable, with a 2.4-percent gain after a 1.9-percent fall this year. Taiwan is expected to take longer to recover, after a 4.7-percent fall in 2008 is followedby a 7.1-percent fall this year and just a 0.8-percent increase next year. And in Thailand, a 2.5-percent fall is anticipated for this year, with just a 2.7-percent gain in 2010.