Sluggish economy hits Hong Kong advertising market as spending declines in first quarter
Advertising spending in Hong Kong fell for the third consecutive month in March, hurt by a significant decline in campaigns by the cosmetics, household and banking sectors as the local economy slowed down.
Data from media-monitoring company admanGo showed that total advertising expenditure in the city reached HK$3.3 billion in March, down from HK$3.8 billion in the same period last year.
“Following the first double-digit drop in advertising spending recorded in 16 years in the first two months of this year, the advertising market continued to shrink last month,” admanGo director Jennifer Ma said in a report.
“All media, except radio, experienced a year on year decrease in advertising spending in March.”
That led to a 13 per cent fall in total advertising expenditure during the first quarter to HK$9.4 billion, down from HK$10.8 billion in the same period last year.
The local advertising industry’s performance seems a far cry from earlier predictions of modest growth this year as marketers conducted more digital and mobile campaigns.
An industry study published in February by the Hong Kong Advertisers Association and market measurement firm Nielsen showed 29 per cent of the 100 major marketers in the city they surveyed would increase their advertising expenditure this year, 35 per cent would keep it unchanged and 36 per cent would cut their spending.
Last year’s survey showed 36 per cent wanted to spend more, 52 per cent did not see any changes in their budget while 12 per cent planned to cut spending.
Cherry Lau, senior director at Nielsen in Hong Kong, said in February that the big difference this year would be marketers allocating more resources to digital and mobile campaigns than previously.
Such optimism apparently stemmed from the record high HK$49.9 billion in advertising spending recorded last year, when leading industries increased their online and mobile campaigns.
In March, mobile and online media accounted for a combined 13 per cent of total advertising expenditure in Hong Kong, according to admanGo. It was the same percentage share a year ago.
Newspapers and television continued to receive the most share of marketers’ budgets in March with 31 per cent and 29 per cent, respectively.
Outdoor advertising followed with a 14 per cent share, while magazines had a 9 per cent share and radio 4 per cent.
Banking and investment services, the city’s perennial top advertising sector, spent HK$324 million in March, a 24 per cent year on year decrease.
The biggest decline in expenditure, however, was posted by the cosmetics and skincare sector. It spent 163.1 million in March, down 44 per cent year on year.
Ma estimated that Paris-based L’Oreal Group, the world’s largest supplier of cosmetics and beauty products, had cut its advertising spending in Hong Kong last March by 87 per cent.