Recovery brings smile back to TV

Brand-hungry shoppers with increasingly fat wallets are fuelling double-digit, year-on-year growth in advertising spend around the region, with emerging markets leading the charge. Total adspend across 12 Asia-Pacific markets (excluding Japan) was US$61 billion last year, up 21 per cent on the previous year, according to figures compiled by Nielsen Media Research. The figures are all ratecard-based and do not factor in discounts, which were still generous in several markets. "With the exception of South Korea, the positive results across the other 11 markets throughout the region reflected a renewed optimism in investment by advertisers," says Forrest Didier, Nielsen Media Research managing director for Asia-Pacific. South Korean adspend fell eight per cent last year as the country's economy faltered. ZenithOptimedia reports that five of the fastest-growing ad markets in the world last year were in Asia: Indonesia (up 40 per cent), India (26 per cent) and Malaysia (19 per cent) took the top three places, with Thailand sixth and China in seventh. Television remains the region's top medium, capturing 66 per cent of total spend for 2004, followed by newspapers with 28 per cent and magazines with six per cent. But radio is starting to make some real noise in markets like China, Malaysia and India, and pay-TV is stealing share from terrestrial networks, most notably in Hong Kong and the Philippines. At the same time, there's a broadening range of opportunities to target consumers out of home, through outdoor, cinema, online and mobile advertising, all of which are showing strong growth, albeit from a small starting point. This is not to say that big business is splashing money about; in fact, the opposite is true. Budgets are growing, but demand for clear ROI has never been stronger. Donna Attal, DHL Express Asia-Pacific's head of regional brand and marketing communications, says: "Media spending at DHL, in the past 12 to 18 months, has been elevated to a level where it now receives intense scrutiny and interest from senior management. Not to say this wasn't the case before, but it has certainly begun to be seen as a strategic investment tool which, if used well, can significantly contribute to the business growth momentum." DHL's spend this year will remain "aggressive", Attal says, with an overall emphasis on TV, outdoor and new media, with variation in different markets, depending on needs and conditions. At Heineken, regional marketing manager Cor Honkoop says there will be no major shift in spending or media allocation, but that media choice is something that's coming under greater scrutiny. "Our new global 'Meet you there' campaign will be rolled out in the region and will lead to sharper and more precise media targeting market-by-market," he says. China is causing the most excitement and attracting the most investment from advertisers. Total spend in the three major media monitored by Nielsen was $31.6 billion last year, up 32 year on the year before. The biggest spender was Procter & Gamble's Oil of Olay brand, which doubled its outlay to Rmb 5.8 billion ($701 million), followed by Gai Zhang Gai tonic, then Rejoice shampoo. Colgate, Crest and Head & Shoulders were also in the Nielsen top 10. Professional services were the biggest-spending category overall, however, at Rmb 22 billion, up 63 per cent since 2003). MindShare and Maxus China CEO Bessie Lee says services, pharmaceuticals and toiletries will remain the top three categories this year. She tips growth in food spending this year as the three big dairies -- Yili, Mengniu and Beijing San Yuan -- battle it out, and as Uni-President and Kang Shi Fu follow more aggressive marketing strategies. "The finance sector could also show strong growth, in banking, credit cards and insurance," Lee says. Local banks may get aggressive this year and next year to pre-empt foreign banks' moves in the second half of 2007." Out-of-home and online media are expected to show the strongest growth in ad revenue this year; cinemas are going up all over the country, new outdoor channels are being introduced, higher demand for key billboard sites is driving up rates, and interest in online is intensifying. Zenith predicts radio will also perform well in China this year, generating 25 per cent more ad revenue than last year, while magazines gain 30 per cent and TV, 10 per cent. Didier says: "There'll be continued strong growth in China, not only economically, but in the run-up to the 2008 Olympics." While local brands temporarily overtook multinationals in the spending stakes, he says foreign brands are coming back to reassert themselves, particularly as improved distribution systems allow them to expand sales beyond second- and third-tier cities. The region's other star performer in spending terms last year was Indonesia, which Nielsen says also posted total growth in adspend of 32 per cent. Spending in the lead-up to last year's presidential and parliamentary election contributed significantly to the total, and growth is expected to remain strong this year. After corporate and social services, which includes election advertising, haircare, laundry products and telecommunications were the biggest-spending categories last year, Zenith says. Outdoor was the market's star performing medium last year, with growth of 158 per cent in revenue, according to Zenith, which is forecasting 25 per cent more growth this year in outdoor, and 33 per cent in internet advertising. In the Philippines, overall spend rose 20 per cent to $2 billion, Nielsen data shows, led by 49 per cent growth in magazine revenue and 34 per cent growth in pay-TV. MindShare Philippines managing director Mitos Borromeo says there's huge potential for outdoor (not monitored by Nielsen) to grow but current uncertainty over outdoor regulations and a lack of innovation, are holding the sector back. Telcos remain the big spenders in this market as price wars rage on, along with toiletries and laundry products. In Hong Kong, spend last year rose 13 per cent to $5.2 billion, Nielsen says, thanks to huge growth in pay-TV advertising and an overall increase in rates by media owners, after several years of deflation and discounting. Pay-TV ad revenue rose 63 per cent, fuelled by growth in subscriber numbers and Cable TV's ability to convince advertisers that its sport and news programmes were effective ways to target a specific audience segment. Spending in outdoor rose 34 per cent, and magazines were up 28 per cent. Newspapers and terrestrial TV still account for about 80 per cent of total spend between them, however. Nielsen says telecommunications was a major driver, with a 50 per cent increase in advertising spending for the year with the launch of 3G services. Slimming products and slimming centres are also among the top spenders. Media analysis company AdmanGo charted McDonald's, HSBC and PCCW as the year's biggest-spending advertisers, with the fastfood giant spending 18 per cent more than in 2003. HSBC's focus was on its credit card services and investment products, while PCCW was pushing its Now Broadband TV. In Singapore, total adspend rose 15 per cent last year to $1.2 billion. Outdoor showed the fastest growth rate, at 26 per cent, followed by TV with 23 per cent. Cinema and radio ad revenues swelled 12 per cent and 14 per cent respectively. MindShare anticipates growth of about 10 per cent in overall adspend for this year. Banking and finance brands are expected to remain big investors after strong financial results for 2004, along with retail and telecoms with the launch of 3G services this year. The Indian market grew 13 per cent last year to $2.6 billion, Nielsen says; still low relative to other countries, given the size of the market. Radio has taken off in India in the past couple of years, but Zenith says this growth cannot continue in the current regulatory environment. Outdoor has been growing in the four major cities, but it's in cinemas where Zenith forecasts the strongest growth (36 per cent) in 2005, followed by the internet (12.5 per cent), thanks to strong interest from finance companies seeking online leads. Cinema was a strong performer in Thailand, where cinema adspend rose 45 per cent last year, Nielsen figures show, contributing to a 17 per cent increase for the year overall, to $2.1 billion. The biggest-spending brands in Thailand were mobile phone service providers. One-2-Call topped the league, with 723 million baht (US$18.7 million) spent on advertising, while four other phone companies were also in the top 10. In second place was Pond's facial skincare products. In South Korea, the only market in the survey to post a slowdown in advertising spend for last year, newspapers -- which account for more than half of total spend -- bore the worst of the pain. Newspaper ad revenue fell 10 per cent, while the total market fell eight per cent to $5.1 billion. And in Australia, big spending by retailers, car makers and financial services providers is fuelling growth in adspend, up 14 per cent last year to $4.7 billion. Outdoor and cinema were again the winners, posting growth of 29 per cent and 20 per cent respectively. TV advertising, meanwhile, rose only 10 per cent, Nielsen says. MindShare Sydney CEO Chris Walton forecasts similar growth for 2005. "The internet could be up 30 per cent, with outdoor and radio also showing strong double-digit growth," he says. "We expect TV will be up by seven per cent." Didier says the growth in new media spend is a feature of most of the more developed markets and, while Nielsen doesn't measure online, he believes it's generally coming on top of traditional media budgets, rather than at the expense of something else. "It's relatively small at this point, but it's growing pretty quickly." In Japan, not included in the Nielsen survey but the biggest ad market in the region, adspend last year rose four per cent, according to MindShare estimates, led by white goods, consumer electronics and beverages. Japan CEO Andrew Meaden is predicting just two per cent growth for 2005. He tips the internet and mobile advertising to overtake radio this year, however, with four per cent of total market share. Nielsen's Didier says the entire region should see strong growth this year, and he's betting on growth in the same league as for last year -- 21 per cent -- or slightly higher. "China may slow down a little bit, but I think we'll see continued strong adspend there. With South Korea now starting to turn around, I would expect a little better growth across the region."