Agencies in Asia-Pacific are bracing themselves for a possible
fallout as the US economy appears to be grinding to a halt.
According to figures provided by ACNielsen and MindShare, the level of
adspend in 2000 was higher than for the year before, indicating that the
late '90s Asian financial crisis was well and truly over.
However, estimates this year are decidedly more conservative, taking
into account a possible downturn in the US.
Underlining the more conservative mood, growth estimates for China have
been placed at 20 per cent compared with 60 per cent last year.
MindShare regional business director Chris Walton said that if the
American economy slowed significantly, it could have a knock-on effect
on Malaysia, Hong Kong, Singapore and Taiwan.
However, he said the jury was still out over what would actually
happen.
"The debate is still on-going as to whether the US will go into a
recession or if it's going to be a soft-landing," Mr Walton said.
Grey Worldwide Asia-Pacific president Eric Rosenkranz said a recession
or a soft landing could mean the same thing for the region's advertising
industry because the issue in the US was not unemployment but consumer
confidence.
"If it's a full-blown recession, Americans will cut back on their
spending.
If it's a soft-landing, they'll still cut back on spending because
although they have a job, their savings are down and their stock
portfolio is sharply down compared with this time last year.
"And what are they going to cut back on? They'll cut back on computers,
electronics, toys and textiles, all of which are major industry
categories in Asia."
Mr Rosenkranz said that although he was forecasting Grey to turn in
another record year, precautionary measures have been implemented.
"I have advised our people to watch their budgets closely and be
sensitive to economic indicators and to watch hirings because really
this is not the time to be taking on new staff," he said.
Worldwide agency heads said they too were cautious about their prospects
for this year.
Mr Miles Colebrook, JWT International group president, said: "Worldwide
we remain cautiously optimistic. The US and Europe have slowed from the
heady heights of 2000 but the outlook remains strong."
WPP, which is JWT's parent, saw pre-tax profits for 2000 soar 43 per
cent to pounds 366 million, however it predicted slower growth for
2001.
"2001 has been ushered in with a multitude of gloomy
prognostications.
Some may prove to be justified. But early indications are that the
worldwide growth of advertising expenditure will be around five to six
per cent," a statement said.
Asia-Pacific Adspend (1996-2001)
All in local currencies (000s)
Country 1996 1997 1998 1999
Japan (Yen) 5,769,900,000 5,990,100,000 5,759,700,000 5,586,909,000
Australia
(Adollars ) 4,832,711 4,989,548 5,263,040 5,612,738
China (RMB) 27,229,000 35,899,000 44,244,482 50,776,000
Hong Kong
(HKdollars ) 16,986,411 20,399,872 20,802,737 20,261,866
Indonesia (RP) 4,140,000,000 5,094,000,000 3,757,000,000 5,612,000,000
Korea (Won) 4,821,909,690 4,857,487,388 3,625,697,389 3,806,982,258
Malaysia (Rg) 2,413,473 2,614,366 2,167,787 2,519,114
New Zealand
(NZdollars ) 1,448,259 1,535,194 1,653,705 1,752,927
Philippines
(Peso) 33,340.51 42,533.26 45,453.65 52,367.27
Singapore
(Sdollars ) 1,137,465 1,275,187 1,186,390 1,219,916
Taiwan
(NTdollars ) 41,094,072 48,585,565 61,876,144 59,338,716
Thailand (Baht) 47,271,000 46,782,000 35,917,000 39,026,000
Vietnam
(USdollars ) 66,622 82,680 85,160 85,757
Country 2000 Est. % Change 2001 Est. % Change
Japan (Yen) 5,698,647,180 2.0 5,812,620,124 2.0
Australia
(Adollars ) 6,624,662 18.0 6,306,472 -4.8
China (RMB) 81,241,600 60.0 97,489,920 20.0
Hong Kong
(HKdollars ) 23,301,146 15.0 25,165,238 8.0
Indonesia (RP) 6,927,000,000 23.4 7,619,000,000 10.0
Korea (Won) 4,263,820,129 12.0 4,775,478,545 12.0
Malaysia (Rg) 3,157,332 25.3 3,512,597 11.3
New Zealand
(NZdollars ) 1,774,308 1.2 1,818,666 2.5
Philippines
(Peso) 55,172.68 5.4 55,172.68 0.0
Singapore
(Sdollars ) 1,494,506 22.5 1,500,000 0.4
Taiwan
(NTdollars ) 62,305,652 5.0 65,420,935 5.0
Thailand (Baht) 47,600,000 22.0 53,445,000 12.3
Vietnam
(USdollars ) 89,187 4.0 92,754 4.0
Source: ACNielsen/MindShare Estimates.
