Hong Kong's advertising suffers worst contraction in almost two decades
Hong Kong’s advertising market saw a 13 per cent year-on-year drop in spending in 2016, as the weak local economy slowed down marketing campaigns of industries across the board.
“This represents the biggest year-on-year decline for ad spending since we started tracking the market in 1999,” Jennifer Ma, a director at media-monitoring company admanGo, told the South China Morning Post on Thursday.
Advertising expenditure in Hong Kong reached HK$39.8 billion last year, down from HK$45.9 billion in 2015, according to admanGo.
It pointed out that the traditional media categories -- television, paid newspapers, magazines, radio and outdoor display -- recorded decreased advertising last year.
Campaigns on digital media, comprising mobile and interactive segments, went up 5 per cent and 41 per cent, respectively, based on admanGo’s estimates after excluding huge discounts on Television Broadcast’s TVB.com and myTV platforms.
Television remained the top media category for advertising campaigns, with a 30 per cent share last year.
Free newspapers had a 17 per cent share, followed by 15 per cent for outdoor display, 14 per cent for paid newspapers, 10 per cent for online interactive, 7 per cent for magazines, 4 per cent for radio and 3 per cent for mobile.
Data from admanGo showed that campaigns for the cosmetics and skin care industry had the biggest percentage decrease in spending, down 39 per cent year-on-year to HK$1.86 billion.
That was followed by toiletries and household products, which saw a 20 per cent fall to HK$3.01 billion.
The banking and investment services industry, which remains the top group of advertisers in the city, slashed its advertising expenditure by 16 per cent to HK$3.86 billion.
Campaigns in the travel and tourism services industry showed the least decrease over the past 12 months, with spending down just 1 per cent to HK$2.45 billion.
Ma said advertising expenditure for cruise and tour packages were up 14 per cent last year, which helped offset the decrease in campaigns by tourism boards like those of Macau and South Korea.
Kevin Huang, the chief executive at digital advertising agency Pixels, on Thursday reiterated comments he made to the Post in October.
He said 2016 was “the worst period the Hong Kong advertising market has gone through in the past 15 years, even worse than the situation during the financial crises and the Sars [severe acute respiratory syndrome] outbreak the past decade”.
The local advertising industry’s performance last year was a far cry from earlier predictions of modest growth, as marketers conducted more digital and mobile campaigns.
An industry study published in February last year by the Hong Kong Advertisers Association and market measurement firm Nielsen showed 29 per cent of 100 major marketers in the city who were surveyed said they would increase advertising expenditure during that period.
Huang said advertising spending in Hong Kong would likely remain slow this first quarter because of the Lunar New Year holidays.
“We expect to see marketers start retooling their campaigns for next quarter and see some stability in the second half of this year,” Huang said. “Marketers will start to focus on local consumers and non-mainland tourists, especially those from Korea and Southeast Asian countries, and on digital media platforms.”