Advertising spending in Hong Kong to see modest gains this year

Digital campaigns will grow in importance while concerns over economic uncertainty expected to cap increase in expenditure

PUBLISHED : Thursday, 28 February, 2013, 12:00am
UPDATED : Thursday, 28 February, 2013, 5:20am

Advertising spending is expected to record a modest increase this year as marketers remain concerned about the lingering economic uncertainty.

That conservative outlook was revealed in the latest survey, conducted by the Hong Kong Advertising Association and market-measurement firm Nielsen between December last year and early this month, on spending projections of about 100 key advertising and marketing executives.

Of those polled, 31 per cent plan to boost their advertising budget, 48 per cent will keep it unchanged and 21 per cent hope to decrease spending.

There are more advertisers who want to stand pat on their previous year's budget.

Last year, 42 per cent expected to spend more on advertising, 32 per cent did not see any changes in the budget while 26 per cent said they would cut their campaigns.

Celia Fan, the director of the Watch research business at Nielsen, said 77 per cent of respondents were concerned about the economic downturn and 70 per cent about the rising cost of doing business.

Nevertheless, marketers in general were positive about the mainland economy and the performance of their own companies, Fan said.

Opportunities cited by the respondents included the influx of mainland tourists and the appreciation of the yuan.

The driver for online or digital campaigns is that more people are spending more time on digital platforms, especially on their tablets and smartphones

While online and mobile advertising made steady gains last year, most brands still preferred to launch campaigns in traditional media outlets.

Television, newspapers, magazines, outdoor billboards and radio cornered about 93 per cent of the total advertising expenditure, according to media-monitoring firm admanGo.

Oliver Rust, the managing director of Nielsen's Hong Kong operations, said: "Digital advertising will increase in importance this year."

The survey findings showed online campaigns would have the second-largest share of advertising budget allocations, at 18 per cent, starting this year, Rust said.

Television will stay on top with 22 per cent, while newspapers get bumped to third place with 16 per cent and outdoor advertising comes in fourth with 14 per cent.

"The driver for online or digital campaigns is that more people are spending more time on digital platforms, especially on their tablets and smartphones," Rust said.

Total advertising spending reached a record HK$40.69 billion last year, driven by major campaigns from brands popular with mainland shoppers, according to admanGo.

It said advertising expenditure in the city increased 13 per cent from HK$36.03 billion in 2011 despite weak market sentiment caused by the sluggish economy.