Traditional TV media continued to drive ad revenue growth for key markets in Asia Pacific, accounting for 39 percent of total ad revenue last year.
According to the IHS Markit report that covers Australia, China, India, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore and South Korea, revenue generated from advertisment increased by 4.5 percent in 2016 compared to the previous year with the total revenue reaching US$139 billion. Philippines and India recorded the highest revenue growth among the 10 countries studied; the Asia Pacific region accounted for one-third of the total global advertising market last year.
Qingzhen Chen, senior analyst, IHS Markit, said in a statement that factors such as rising consumerism, emerging middle class and rapid mobile device adoption among the younger demographic contributed to the robust growth of the ad market last year.
“These factors will continue to propel the growth of advertising in the longer term. In contrast, growth for mature ad markets like Australia and Japan continues to be predominantly driven by innovation, better audience measurement, and digital adoption of traditional media via ‘out-of-home’ access," said Chen.
While growth for TV commercials is expected to be steady with a compound annual growth rate (CAGR) of 2.2 percent between 2016 and 2021 among the countries studied, its share is expected to be reduced to 34.0 percent due to the stronger growth of online media.
IHS Markit's Market Monitor: Advertising in APAC report projects a rapid growth of online advertising with a CAGR of 301 percent between 2011 and 2016. Meanwhile, the online ad market is expected to grow at a CAGR of 11.9 percent between 2016 and 2021. China is expected to lead the online ad market in the region, taking 63.1 percent of the total online ad revenue of the 10 APAC ad markets collectively by 2021.
“Despite the double-digit rate, online ad revenue is still small compared to traditional TV media. Structural factors such as poor connectivity and broadband infrastructure cap the level of growth possible in Asia Pacific’s online ad markets,” said Kia Ling Teoh, analyst, IHS Markit, in a statement.
Meanwhile, China is an attractive market as its 650 million online users is twice the size of the US population. Chen said continuous investment by domestic online companies coupled by foreign publishers' interest in entering the market ensure China's dominance in the online ad market.