Regional events such as the 2018 World Cup will be held in Russia, 2018 Winter Olympics South Korea, Asian Games in Indonesia and Australian federal election will play an important role in stimulating growth. — Reuters photo
KUCHING: Advertising and digital communications group Dentsu Aegis Network anticipated a more positive 2018 for Asia Pacific’s advertising expenditure (adex) than previously expected.
Adex spend growth will rise from 4.0 per cent in 2017 to hit 4.5 per cent in 2018, it said, higher than the 4.2 per cent forecast in January 2018 and taking total investment to US$215.95 billion.
Regional events such as the 2018 World Cup will be held in Russia, 2018 Winter Olympics South Korea, Asian Games in Indonesia and Australian federal election will play an important role in stimulating growth.
Geographically, Asia Pacific is a major growth region, contributing 41 per cent of the global increase (US$613.5 billion). Comparatively, North America accounts for 32 per cent, Western Europe accounts for 13 per cent with Latin America at 8 per cent and Eastern Europe 5 per cent.
Commenting on the latest forecasts, Nick Waters,chief executive officer of Dentsu Aegis Network Asia Pacific, said, “The region as a whole displays a positive outlook with increasing growth rates.
“We are seeing upward revisions in most key markets, with India, the Philippines and Vietnam showing high rates of growth. Spend in China continues to grow at pace, though driven almost entirely by the ecommerce platforms, Alibaba, Tencent and Baidu.
“Digital remains the dominant growth area with a quarter of Asia Pacific advertising spend expected to be delivered through mobile for the first time. Digital will be the leading form of advertising in half of the markets that we track in the region.”
Looking at global media trends, Dentsu Aegis saw that the mobile device was steadily becoming the primary point of access to all digital services and content. In 2018, 52.2 per cent of all worldwide online traffic was generated through mobile phones, up from 50.3 per cent in the previous year.
People now spend an unprecedented amount of time on their smartphones—more than five hours a day, according to some estimates. This growth in usage is largely driven by the widespread availability of high-quality digital Video.
Mobile Video consumption is exploding among all age groups and content categories. Nine in ten social media users opt for mobile browsing, with mobile apps accounting for 70 per cent of time spent on Social media.
Reflecting this, mobile is forecast to represent a quarter of global ad spend 25.2 per cent this year exceeding the previous prediction of 24.8 per cent. With Mobile payments forecast to be more popular in the coming years, Mobile is set to continue on a positive growth trajectory a forecast 23.3 per cent in 2018 and 18.8 per cent in 2019.
Worldwide Digital media spend is forecast to increase by 12.6 per cent in 2018, more than three times the rate of all media (3.9 per cent), to reach US$230.6 billion — a increase of US$25.7 billion year-on-year.
Online video (24.6 per cent) and social media (21.6 per cent) are particularly strong. Paid search continued to account for the largest share of digital (39 per cent). As previously predicted, digital will overtake TV for the first time this year to account for 38.4 per cent share of total adex spending versus 35.5 per cent.
Traditional media spend is forecast to decline by just minus 0.5 per cent in 2018 and minus0.4 per cent in 2019. Newspapers and magazines are expected to continue their downward trend, with falls of 7.5 per cent and 6.5 per cent respectively. Radio (2.0 per cent), Out of Home (2.2 per cent) and Cinema (5.9 per cent) spend are expected to show steady growth.
TV spend is forecast to move back into growth in 2018 (1.2 per cent), following a -0.7 per cent decline in 2017, remaining a major medium in the mix with 35.5 per cent of overall investment.