Mobile-first is picking up as new trend, with social and TV running neck and neck as key media
The Hong Kong economy ended 2017 with positive momentum, and this is expected to continue this year. With that positive outlook, as many as 38% surveyed advertisers said they expected the Hong Kong economy to pick up in 2018, a level of confidence greater even than that related to the global economy, according to the latest Hong Kong Advertisers Association Advertising Spending Projections 2018 survey, conducted by Nielsen.
Total advertising spending in 2017 was HK$41.9 billion, 4% more than in 2016. Advertising spending on online interactive and mobile accounted for 38% of all advertising spending, compared with 39% for TV and newspaper advertising combined.
The survey shows that this year 33% advertisers plan to increase their advertising spending, and another 53% said their budget will remain unchanged. One changing trend is that instead of advertising funds being shifted from offline to online or mobile channels, 31% of advertisers are now gaining additional funding to support online marketing. The decline in the proportion of advertising funds allocated to offline channels last year was less than the decline in the previous year.
“The increase in advertising budget is attributable mainly to advertisers’ increasing focus on digital media,” said Cherry Lau, Senior Director, Media, Nielsen Hong Kong. “As many as 63% of surveyed advertisers reported that they will increase their online advertising budget, a clear sign for marketers of how advertising is being transformed. 2018 will be another year for online advertising. As the survey shows, projected advertising spending is 59% for online and 41% for offline. Of the funds allocated for online marketing, paid social or social network advertising continued to lead at 12.8%, followed by display ads at 10.2% and video ads at 9%.”
According to the Advertising Spending Projections 2018, surveyed advertisers spent 55% of their advertising budget in online advertising, including interactive and mobile, in 2017. As the media ecosystem continues to evolve, online spending is going to fuel advertising spending growth.
In terms of the marketing effectiveness of various channels, there is no doubt that the online channel is becoming the mainstream, and mobile is expected to lead in the future. 83% of respondents said they expected the marketing effectiveness of mobile marketing to increase, followed by online video (66%) and social media/paid social media content (65%). In regards to offline channels, live TV remains some of its competitiveness at 41%, but only 2% of respondents say they regard print as an effective channel.
After years of engaging marketing activities with social media channels, advertisers are becoming more mature in using social media as a marketing platform, and more diversified strategies entail using online video (74%), mobile social (61%) and social media pages (56%). With digital marketing leading the way, there is no doubt that advertisers will see young elites and professionals as the core target segments as they plan marketing campaigns.
With the media landscape becoming more fragmented and diversified, advertisers see that the big challenge is to understand customers’ interactions across different media channels (41%). It is important for them to allocate the right resources to the right channels to maximize return on investment. However, rapid technological changes (22%) and increasing concern about privacy (19%) are seen as some of the rising challenges.
“The media landscape is being transformed, and online channels will continue to drive growth in advertising spending this year,” said Raymond Ho, Chairman of the Hong Kong Advertisers Association. “The challenge remains for marketers to get across their desired messages in the various media in a synchronized and effective way. With diversified channels available in the market, there will be greater demand for customer journey studies, total audience measurements, in-flight platform optimization and precise and real-time consumer activation.”
Lau said: “With online becoming the mainstream, there is no doubt that mobile will become preeminent over the next few years. Even though advertisers now have more experience and control in using online and in online/social marketing tactics, marketers are still keen on having cross-channel optimization and online measurement to help them make better decisions.”
The Survey on Advertising Spending Projections 2018 was conducted between November 27, 2017 and January 17, 2018 by Nielsen. The survey covered various commercial sectors including top-spending advertisers and looked at both their planned advertising spending and business focuses in 2018. Almost 100 self-administered questionnaires were received from key advertisers and screened for final analysis, providing timely reference on advertising spending trends, media selection and planning, and the media landscape for 2018. Telephone interviews were also conducted with randomly selected advertisers for qualitative feedback.
Nielsen Holdings plc (NYSE: NLSN) is a global performance management company that provides a comprehensive understanding of what consumers watch and buy. The Company’s Watch segment provides media and advertising clients with Nielsen Total Audience measurement services across all devices where content – video, audio and text – is consumed. The Buy segment offers consumer packaged goods manufacturers and retailers the industry's only global view of retail performance measurement. By integrating information from its Watch and Buy segments and other data sources, Nielsen provides its clients with both world-class measurement as well as analytics that help improve performance. Nielsen, an S&P 500 company, has operations in more than 100 markets that cover more than 90% of the world's population. For more information, visit www.nielsen.com.
HK2A is a non-profit organization formed by a volunteer group of advertising and marketing professionals. The association’s key objectives are to protect the legitimate interests of advertisers and promote higher professional standards and ethics in the advertising industry. Adspend Projections has been one of the flagship annual events organized by HK2A in the past 19 years. For more information, please go to www.hk2a.com.