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Nielsen: Hong Kong Advertising Market to Remain Flat in 2019

Uncertain economic climate sees cautious investment, a 50/50 split between online and offline spend and the ROI on advertising investment increasing in importance.

Hong Kong – March 5, 2019 Hong Kong’s advertisers predict a tough year ahead in 2019, with 59 percent expecting an economic downturn in the territory over the next year.  Despite this, advertising budgets are expected to remain stable, with 36 percent of marketers expecting an increase, versus 25 percent expecting a decrease, and an equal split between online and offline spend, continuing the balanced approach of 2018.

The figures, which come from the latest Advertising Spending Projections Survey conducted by Nielsen in collaboration with the Hong Kong Advertisers Association, show that brands will continue to use advertising to defend market share in the coming year.  However, it is a mixed picture, with advertisers predicting growth in the health and personal care categories, such as pharmaceutical, healthcare, cosmetics and infant products vs. a decline across the property, financial services and retail segments. And 2018 saw, for the first time, advertisers balance their advertising investments, with 51 percent of spend invested in offline media and 49 percent in online.

“While economic concerns are top of mind for Hong Kong marketers, advertising is seen as an essential tool to protect and defend market share,” said Helena Sze, Director, Media, Nielsen Hong Kong. “We can also see that the lessons from the previous economic downturn have been learnt, with the expectation that advertisers will cautious about future investment, and will use programmatic on targeting to optimise budget effectiveness towards the right consumers.”

Ad budget planned distribution between offline and online will be 50:50 in 2019, continuing the budget shift from offline to online but at a lower rate than previous years. Across online channels, Social accounts for 10.5 percent of budgeted spend, a slight decrease from 2018 when it accounted for 12.8 percent, while video accounts for 9.9 percent, an increase of 0.9 percent point.

In terms of offline, TV accounts for 13 percent of overall budget, a 2.4 percent points increase from 2018, with free-to-air taking the lion’s share at 11.2 percent.  Print is expected to hold its budget allocation, with 11.7 percent, with free newspapers accounting for half of this. Outdoor advertising will also grow, accounting for 9.1 percent of total spend, a 2.6 percent points increase from 2018.

“Return on Investment (ROI) remains a major challenge for the advertisers, especially at times when the marketing dollar is stretched,” said David Yeung, Chairman of the Hong Kong Advertisers Association. “With the growing popularity of online media and e-commerce, ROI can be traced much more precisely and easily through the use of sophisticated tracking tools.”

However, marketeers continue to be challenged by the need to demonstrate effective return on investment (ROI).  38 percent of advertisers reports that the conversion of advertising into sales remains a challenge, and 28 percent say they continue to struggle with cross channel audience optimization.

In response, advertisers are adopting new technology.  56 percent are investing in new applications, such as programmatic tools, AI and automation, while 54 percent are using big data management services to address the challenge of cross platform targeting. Perhaps most impressively, 41 percent are integrating mobile payments and fintech applications into ads themselves.

Sze commented, “While the return on investment conundrum hasn’t been solved, we are seeing a bigger role for technology applications to help address this issue. This is especially relevant as the KPIs for ad measurement are likely to be more comprehensive and demanding in 2019.”

*Data source : PHD. Adspend figures have taken into consideration the discount factor.

About Advertising Spending Projections 2019 Survey

The Advertising Spending Projections 2019 survey was conducted between December 3, 2018 and February 14, 2019 by Nielsen. The survey covered various commercial sectors including top-spending advertisers and concentrated on both their planned advertising spending and business focuses in 2019. Close to a hundred self-administered questionnaires were received from key advertisers and screened for final analysis, which provide timely reference on the trends of advertising expenditure, media selection and planning, and the media landscape for 2019.  Telephone interviews were also conducted with randomly selected advertisers for qualitative feedback.

About Nielsen

Nielsen Holdings plc (NYSE: NLSN) is a global measurement and data analytics company that provides the most complete and trusted view available of consumers and markets worldwide. Our approach marries proprietary Nielsen data with other data sources to help clients around the world understand what’s happening now, what’s happening next, and how to best act on this knowledge. For more than 90 years Nielsen has provided data and analytics based on scientific rigor and innovation, continually developing new ways to answer the most important questions facing the media, advertising, retail and fast-moving consumer goods industries. An S&P 500 company, Nielsen has operations in over 100 countries, covering more than 90% of the world’s population. For more information, visit www.nielsen.com.

About HK2A

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 20 years.  For more information, please go to www.hk2a.com.

CONTACT:

Tiffany Tsang, 2880 3428, 9243 8853 (mobile)

tiffany.tsang.consultant@nielsen.com