Despite sharp growth in adspend in India and expected windfall from global events such as the Tokyo Olympics and UEFA Champions League tournament, Dentsu Aegis Network (DAN) has cut its Asia adspend forecast by 0.7% to 4.2% for 2020. The network cited slowing growth in China, Indonesia, Vietnam, Singapore and Thailand.
DAN now expects China's adspend growth to hit 5.6% for 2020, down from the earlier forecast of 6.9%. This is alongside the economy’s moderated growth in recent years, as well as slowing retail sales and industrial output that have hit adspend in the region. The network forecasts continued sluggishness into 2021.
Globally, DAN forecasts predicts growth of 3.9% in 2020, amounting to $615.4 billion, building on growth of 2.6% in 2019.
Other countries in Asia also contributed to the muted picture, with forecasts pared down across Southeast Asia, including Indonesia, Vietnam, Singapore and Thailand. It is a similar situation in North Asia, where the growth projection for South Korea has been halved since June 2019 to 2.3%, while Hong Kong’s growth has stalled after a difficult year in 2019 (-10.9% versus 2018).
Despite the downward revisions, DAN still expects Asia to be the fastest growing market worldwide, according to its survey of data from 59 markets. Compared to China's growth struggle, India continues to go from strength to strength, with DAN anticipating double-digit growth of 10.9% in 2020 and 12% in 2021, owing to a surge in smartphone adoption creating a boom in mobile innovation.
The Philippines (4.7%) and Malaysia (0.7%) experienced more growth than predicted. Malaysia's positive economic outlook is creating a spending appetite for advertisers, DAN said.
Digital advertising continued its growth, with APAC leading the way as the most advanced region in the world in this segment. Digital’s share of total ad spend exceeds 51% in Asia, led by China (67.7%), Hong Kong (60.1%), Australia (55.8%) and New Zealand (54.7%).
“China is the largest smartphone market in the world, with India overtaking the US in 2018 to be the second," Ashish Bhasin, CEO of Dentsu Aegis Network APAC, said in a statement. "The merging of mobile with traditional formats will continue to be an opportunity for growth in this region as markets mature."