As global advertising markets see a sharp rebound in 2021, resulting in large forecast upgrades to record growth levels, Asia-Pacific is also likely to experience very strong growth—just slightly below the global average.
Magna's Spring 2021 global advertising forecast says the APAC market will grow by 12.8% to reach $203 billion this year, fueled by a 19% rise in digital ad sales and a 4.1% gain in linear. This contrasts with a -3.3% drop across all ad media last year and also surpasses the $186 billion in ad spending level of 2019.
Despite the severity of Covid-19 in South and Southeast Asia, Magna claims the pandemic has affected the ad markets in Asia Pacific less than other regions with fewer, shorter shutdowns. Yet consumer behaviours have been heavily affected with more streaming, ecommerce and integration of digital platforms into daily lives.
China, the world's second largest ad market behind the US, is leading the way with a phenomenal 16.1% growth rate that Magna says will result in ~$13 billion of incremental spending in 2021. This can't even be considered a 'rebound' as China was one of the few markets to grow in 2020 thanks to a strong digital performance.
“2021 will see higher than usual growth in ad spend bouncing off of the reduced spend we saw in most of the APAC markets last year," says Gurpreet Singh, managing director of Magna APAC. "This will largely result in regaining lost ground, however, some markets will take more than a single year for their ad spend to recover from the impact left by covid. Digital continues to be the biggest growth driver across most markets fueling a faster recovery. Linear media was affected most deeply last year so its recovery back to pre-covid levels is going to remain a big challenge across the majority of APAC markets for the next few years.”
Beyond the 2021 rebound, Magna expects APAC advertising spending to grow by an average +4.4% annually over 2022-2025, to reach $241 billion in 2025. Whereas India's ad market was hit more severely than others last year, its market forecast calls for more sustained rates of higher growth at 11% this year and 13.6% in 2022 when Magna predicts India will lead the world in ad growth.
APAC remains the second largest global advertising region, behind North America, accounting for 31% of the global advertising market place, compared to 27% in 2010.
Magna's findings differ somewhat from another survey released today, the Asia-Pacific Advertising Trends 2021 report by Media Partners Asia. The MPA predicts a 2021 APAC ad expenditure rebound of 7.6%. But like the Magna study, it notes that China is the largest single contributer to APAC growth this year, while India is similarly forecast to rebound strongly over 2020-25 with a compound annual growth rate of 13%.
MAGNA'S KEY FINDINGS BY MARKET
- Chinese media owners advertising revenues will grow by +16.1% in 2021, following 2020’s surprisingly robust +2.6% performance. This will bring the total market to CNY 671 billion ($97 billion).
- Digital advertising revenues will grow by +21% to reach CNY 512 billion (76% of total advertising spending).
- Digital advertising revenue growth will come from spending on mobile devices (+25% growth) as well as spending on search (+23%), video (+21%), and social (+25%).
- In 2022, the Chinese market will grow by +5.9% to reach CNY 710bn ($103bn), surpassing $100 billion for the first time, and representing only the second market – after the US – to pass the $100 billion mark.
- By 2025, digital advertising revenues will represent 85% of total brand budgets in China.
- Media owners advertising revenues will rise by +9% in 2021 to reach JPY 5.0 trillion ($47.2 billion) following a decline of -6% in 2020.
- Linear formats will stabilize (+2%) while digital advertising revenues will accelerate (+16%) to reach 2.6 trillion JPY ($24.3 billion).
- Economic stabilization in 2021 (GDP +3.3%) and the delayed Tokyo Olympics will support the advertising market recovery.
- Japan remains the third largest ad market in the world and the second largest in APAC
- Ad market recovery will be delayed in India compared to other large market, due to the late and protracted COVID crisis.
- Indian net ad sales revenue will grow +11% in 2021 to reach $8.4 billion (below global and regional averages). However ad spend growth is expected to accelerate in 2022, fuelling advertising revenues increase of +13% (way above APAC average of 6%).
- But India’s second COVID wave, which has persisted through the spring of 2021, is likely to have scarring effects in the medium term and could weigh on long-term growth.
- Net ad revenues across digital formats will rise +11% to reach $2.4 billion in 2021, while linear ad sales will grow by +11% from a very low comp following the decline of -30% in 2020.
- Despite the 11% growth this year, linear ad sales will remain 23% lower than pre-COVID levels, while digital ad sales will be 15% above 2019 levels.
- Australia’s advertising market will grow by +11.4% in 2021 to reach AUD 17.7bn ($12.2bn).
- Linear ad sales in Australia will increase by +9.1% in 2021, the best performance for linear media revenues since 2010 off the back of an easy comparison in 2020 (-20.5%).
- Digital advertising revenues will grow by +12.5% in Australia to reach 68% of total budgets. Australia is one of the most mature digital advertising economies, and digital spending was already resilient in 2020 (+5%).
- In 2022, Australian advertising growth will slow down to +2.9% to reach AUD 18.2 billion.
- South Korea’s advertising revenues will grow by +8.3% in 2021 to reach KRW 12.3tn ($10.4bn).
- Linear advertising revenues will increase by +1% to represent 39% of total advertiser budgets. This is a relatively weak bounce considering in 2020 linear advertising revenues fell by -16%.
- Digital advertising formats, on the other hand, will increase by +13.4% in-line with 2020’s robust +14% growth performance.
- The Indonesian advertising market will grow by +11.5% in 2021, to reach IDR 108.3tn ($7.4 billion). GDP in Indonesia is expected to increase by +4.3% on a real basis in 2021, following 2020’s -2.1% real GDP decline. This is despite COVID cases at some of the highest levels with low vaccination rates, creating uncertainty for deploying budgets in 2021.
- Linear advertising spending is expected to increase by +6%, following 2020’s -19% growth while digital advertising sales will increase by +20% to reach 43% of total budgets (IDR 47.0tn).
- Media owners advertising revenues will increase by +9% in Thailand in 2021 to reach THB 124.7bn ($4.0bn), regaining much of the spending lost in 2020 (-12.9% growth).
- Increased Covid cases and low vaccination rates combined with the reluctance of Western tourist to travel abroad already, creates significant uncertainty to advertising spending.
- Linear advertising revenues will increase by +5.3%, a small bounce relative to the -18% declines seen by linear formats in 2020, whilst digital advertising revenues will increase by +23% to reach 24% of total advertising budgets.
- Advertising sales in Hong Kong will increase by +15% in 2021 to reach HKD 27.4bn ($3.5bn).
- Its success at fighting Covid and relatively higher vaccenation rates make brands feel comfortable engaging with media partners and deploying budgets.
- Linear advertising revenues will increase by +15.5% to HKD 15.8tn, representing 58% of total advertiser budgets, primarily due to the weak growth comparison in 2020 (-25.7% linear advertising spending growth). Digital advertising spending will increase by +14% to reach 42% of total advertiser budgets.
- Media owners advertising revenues in Malaysia will increase by +15.4% to reach MYR 5.1bn ($1.2bn), following 2020’s -20% performance.
- Linear advertising revenues will increase by +10.8% to reach 44% of total advertiser budgets following a huge decline in 2020, however, when linear advertising revenues declined by -39%. This means that linear advertising revenues will only regain 68% of the prior 2019 spending level despite the large bounce this year in 2021.
- Digital advertising spending, on the other hand, will increase by +19.3% to reach MYR 2.9bn ($680 million) to represent 56% of total budgets, up hugely from 40% of budgets in 2019.
- The mix of the entire advertisinglandscape in Malaysia has been upended because of the COVID crisis, with most growth driven by spending on mobile devices, which will increase by +27% and represent 69% of total digital advertising revenues.
- Advertising sales in Taiwan will increase by +14.3% this year in 2021 to reach TWD 95.7bn ($3.3bn), following 2020’s extremely resilient +3.4% growth with almost zero cases throughout the entire crisis until now.
- A recent case spike and low vaccination rates have given brands more uncertainty now.
- In this environment, linear advertising revenues will be flat (-0.2%) following a -12.7% decline in 2020, and will represent 30% of total budgets.
- Digital advertising formats are expected to grow by +21.8% this year and represent 70% of total advertiser budgets following an extremely strong +14% performance in 2020 as a result of the effective COVID controls.
- Advertising spending in the Philippines will increase by +15.8% in 2021, to reach PHP 118.9bn ($2.4bn), following 2020’s -14.9% performance.
- Linear advertising revenues will increase by +13.7% to reach PHP 99.4bn or 84% of total advertiser budgets following 2020’s -18.1% performance, and means that linear spending totals will be at 93% of the prior 2019 level.
- Digital advertising spending will grow by +27.7% and represent 16% of the total spending in the Philippines. While this is a low share of spending relative to other markets in APAC for digital advertising formats, it still provides a growth engine going forward.
- Singapore’s advertising sales will increase by +7.4% in 2021 to reach SGD 2.2bn ($1.6bn), following 2020’s -8% performance.
- Linear advertising revenues will be flat (+0.7%) following 2020’s -16.3% decline.
- Digital advertising revenues will grow by +19.7% in 2021, to reach SGD 867 million, 39% of the total advertising market.
- The advertising economy in New Zealand will increase by +7.6% in 2021 to reach NZD 2.8 billion ($1.8 billion).
- Linear advertising revenues will increase by +2.9% to represent 41% of total budgets.
- Digital advertising revenues, on the other hand, will grow by +11% to reach NZD 1.7bn and represent 59% of total advertiser budgets.
- Advertising revenues will increase by +7.9% in Vietnam this year in 2021 to reach VND 32.7 trillion ($1.4 billion) following 2020’s -2.8% performance.
- Because only 1% of the population has been vaccinated, the outlook for future business activity is slightly uncertain.
- Linear advertising revenues will increase by +1% to represent 70% of total budgets.
- Digital spending has gone from representing 19% of total budgets to 31% of total budgets in just two years.
- Linear advertising revenues are anticipated to merely stabilize this year following the erosion of -6% in 2020.
- Digital growth slowed in 2020, +19%, but will re-accelerate in 2021, rising +24% to reach 19.3 billion rupees ($120 million) by the end of the year.
- Pakistan is a mobile-first digital ad market, with over 70% of digital dollars going to mobile formats.
- The Sri Lankan advertising market contracted by -9% in 2020 amid the Coronavirus crisis and political and economic turmoil (real GDP: -3.6%). In 2021, MAGNA anticipates a rebound of +10% overall, to reach 61.7 billion rupees ($330 million).
- Linear format advertising revenues will rise by +5% to reach $230 million.
- Digital formats will see much stronger growth, with advertising revenues rising +25% to reach $100 million, 30% market share.