Hong Kong’s advertisers are expected to spend cautiously in 2019, as marketing budgets stay flat or slow down slightly overall amid economic downturn concerns, a report predicted.
Advertisers polled predict a tough year ahead, with 59% expecting an economic downturn in the region, according to a report from Nielsen and the Hong Kong Advertisers Association.
Against this backdrop, however, ad budgets are expected to remain stable, “as advertising is seen as a essential tool to protect and defend market share,” said Helena Sze, director of media with Nielsen Hong Kong.
“We can also see that the lessons from the previous economic downturn have been learnt, with the expectation that advertisers will be cautious about future investment, and will use programmatic tools on targeting to optimise budget effectiveness towards the right customers,” Sze added.
Data from the report showed that 36% of marketers expect an increase in marketing budget, while 25% expect a decrease. But it’s a mixed picture, with advertisers predicting growth in the health and personal care categories, such as pharmaceutical, healthcare, cosmetics and infant products, in contrast to a decline across the property, financial services and retail segments.
“ROI remains a major challenge for the advertisers, especially at times when the marketing budget is stretched,” said David Yeung, chairman of the Hong Kong Advertisers Association.
But 38% of advertisers say converting advertising into sales remains a challenge, and 28% say they continue to struggle with cross channel audience optimisation.
In response, advertisers are adopting new technology. The report said 56% are investing in new applications, such as programmatic tools, artificial intelligence and automation, while 54% are using big data management services to address the challenge of cross platform targeting. Moreover, 41% are integrating mobile payments and fintech applications into ads themselves.
The report also showed that advertising budget distribution between offline (TV, print and outdoor) and online (social and online video) is forecast to be 50/50 in 2019, continuing the budget shift from offline to online but at a lower rate than previous years.