Digital and mobile advertising budgets in Hong Kong tipped to hit record high this year

72 per cent of marketers committed to intensifying digital and mobile initiatives

PUBLISHED : Thursday, 25 February, 2016, 6:14pm
UPDATED : Thursday, 25 February, 2016, 6:14pm

Advertising spending in Hong Kong is predicted to grow modestly this year as marketers increase their budget for digital and mobile campaigns in the city to a record high.

“While marketers remain cautious because of all the economic uncertainties, more than a quarter of them remain positive about the performance of their companies this year,” Cherry Lau, senior director at Nielsen in Hong Kong, said on Thursday.

The latest industry study by the Hong Kong Advertisers Association and market-measurement firm Nielsen showed that 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.

Lau said the big difference this year was that marketers were poised to allocate more of their resources to digital and mobile campaigns than in any previous year.

Of those polled, 72 per cent were committed to intensifying digital and mobile initiatives.

The power of digital ad formats cannot be underestimated, as they offer many advantages for achieving effective reach
Raymond Ho, Hong Kong Advertisers Association

“Our survey showed that projected spending in digital and mobile campaigns achieved its biggest market share to date,” association chairman Raymond Ho Wai-wing said.

The budget allocation for those campaigns this year totalled 41 per cent, up from 35 per cent in last year’s survey.

Offline campaigns – including television, newspapers, magazines, radio, outdoor billboards and other physical product placements – will make up 59 per cent of advertising expenses this year, according to the survey, down from 65 per cent last year.

READ MORE: Ad spending on Hong Kong residential properties fell 22 per cent in 2015 as buying sentiment soured

“The power of digital ad formats cannot be underestimated, as they offer many advantages for achieving effective reach,” Ho said. “Marketers must transform to become more transparent, accountable and evolve the relationship from a one-way sales pitch to a two-way conversation.”

The latest survey showed that social media (20 per cent) and online display advertising and mobile (19 per cent each) made up the bulk of projected digital spending for marketers.

Other digital campaigns included paid search, online and mobile TV programming, so-called search engine optimisation activities and video blogs.

Nearly half of the Hong Kong marketers (48 per cent) polled this year considered “understanding customers’ interactions across channels” as their biggest challenge, followed by “calculating the return on investment” (44 per cent) and “increased media fragmentation” (44 per cent).

“Marketers need better collaboration with the agencies and media owners to help create content and media strategies that will drive consumers’ purchase decision,” Lau said.

Data from media-monitoring firm admanGo estimated total advertising spending in Hong Kong grew 3 per cent to HK$46 billion last year from HK$44.7 billion in 2014.