Expect an avalanche of mobile video adverts in Hong Kong this year, marketers say

PUBLISHED : Thursday, 21 January, 2016, 5:16pm
UPDATED : Thursday, 21 January, 2016, 5:53pm

Advertising spending in Hong Kong could see a big shift to more mobile video campaigns this year as marketers target the growing audience of over-the-top (OTT) services in the city.

“Most of the city’s large television advertisers have started to invest in OTT video ads. These investments will only accelerate in 2016 and beyond,” Kevin Huang, the chief executive at top Hong Kong online advertising agency Pixels, told the South China Morning Post.

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Huang pointed out that the mainstream availability of PCCW Media’s Viu, Baidu’s iQiyi, Netflix and LeEco’s football-focused offering has helped legitimise OTT services to advertisers in Hong Kong.

OTT applications, such as Netflix on-demand streaming video, deliver services over the internet that bypass traditional commercial distribution via telecommunications, cable or satellite network operators.

“This year, advertisers will make digital video advertising on OTT platforms a key component of their media plans,” Huang said.

“Over the past 18 months, we have already worked with more than 300 brands to run close to 1,000 campaigns available on in-stream video advertising online and on mobile.”

Major brands that have adopted and increased their investment in OTT ads include Procter & Gamble, Unilever, HSBC, L’Oreal, Estee Lauder, insurer FWD Group, McDonald’s, Wyeth Nutrition, Nestle, Wellcome, Melco Crown Entertainment, Sands China, Ocean Park, Danone and Hong Kong Disneyland Resort.

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Data from media-monitoring firm admanGo showed that combined spending on interactive online and mobile campaigns made up 13 per cent of the total HK$4 billion advertising market in Hong Kong in November.

That was up from a 10 per cent media share for the whole of 2014, when total advertising expenditure in the city reached HK$44.9 billion.

Based on recent industry data, the share of digital campaigns in advertising is set to grow significantly.

Technology research firm IDC has forecast that 3.2 billion people, or 44 per cent of the world’s population, will have access to the internet this year. Of that number, more than 2 billion people will be using mobile devices to do so.

“Over the next five years, global growth in the number of people accessing the internet exclusively through mobile devices will grow by more than 25 per cent a year, while the amount of time we spend on them continues to grow,” Scott Strawn, a programme director for strategic advisory service at IDC, said in a report last month.

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“This change in the way we access the internet is fueling explosive growth in mobile commerce and mobile advertising.”

Government data showed that there were 14.1 million subscribers to internet-capable 2.5G, 3G and 4G mobile services in Hong Kong at the end of October.

Huang said most of the major advertising agency groups in the city have conducted research about OTT video campaigns among local residents.

“The data points to major consumption of mobile video, which is helping advertisers justify shifting more dollars to OTT platforms from free-to-air TV,” Huang said.

He said Viu and iQiyi are actively working with advertisers. LeEco, formerly known as Letv, is expected to engage advertisers ahead of its broadcast of English Premier League football matches from August this year.

Netflix, which is a subscription service, does not sell advertising.