This is the first in a series of articles focusing exclusively on Asian marketing and advertising, sharing knowledge gained from growing our own business in Asia, as well as that of our clients.
This article, the first of five, looks at some of the key macro trends driving the growth of Asian advertising.
Continentally, Asia comprises of 48 countries, populated by 4.4bn people (60% of the global population) who speak over 2000 languages, celebrating the highest levels of religious diversity on the planet, and accounting for nearly 40% of global GDP: its big, growing and diverse.
Economically, the Asian Tigers and, more recently, China have slowed by their own standards, nonetheless the continent is experiencing great growth across many of its key economies, which is reflected in its advertising industry.
Although the industry experienced a slower 2015 due to many of Asia’s main companies tightening their advertising budgets, total spend, according to ZenithOptimedia, was forecast to reach $59 billion in 2016 – an increase of 18.2 per cent on 2015.
In fact, Asia-Pacific overtook North America as the top spender on advertising in 2016.
The three countries that are driving this growth are India, Indonesia and the Philippines, while powerhouses like China, South Korea and Japan continue to see strong demand for advertising services.
China continues to be the largest Asian market, spending around $22bn on advertising in 2016 (ZenithOptimedia).
Aside from huge populations and growing economies, we believe that there are four trends within the continent that have led and contributed to advertising industry growth.
A switch from drain to gain
During the last five years Asia’s ad agencies have benefitted from brain gain.
After years of watching top talent leave for Europe and North America, rapidly growing economies, improved social and educational systems paired with favourable employee tax structures, in cities such as Hong Kong and Singapore, have provided perfect incentives to retain young, skilled labour and attract experienced leadership from some of the historically more progressive ad markets elsewhere in the world.
During the same five year period Asia’s largest ad agency, Tokyo-based Dentsu Group, grew incredibly, becoming one of the largest global agency networks, acquiring over 60 businesses in 2015 & 2016 alone.
For example, in late 2016 the group acquired Singaporean agency, Band, and US based performance marketing agency, Merkle, enabling the group to continue to stretch into new countries and new sectors.
Ad growth has also been supported by the continent’s dense population and the opportunity this creates for advertising.
All of the world’s top five megacities are in Asia, which include Tokyo – which already houses several of the world’s largest ad companies – Seoul and Jakarta.
This dense population means that, of the major global regions, Asia has a huge volume of accessible consumers in five centralised pockets, lending itself to delivering the smallest per capita ad spend at just $15 per head. The result is that it costs much less to reach more people in Asia, therefore creating an exciting advertising opportunity due to the great potential return on investment.
Digital first economies
According to TechInAsia, Singapore, Hong Kong, South Korea, Japan and Taiwan have some of the highest internet and mobile speeds in the world, with internet speeds ranging from 15Mbps – 27Mbps vs a global average of 6.1Mbps.
Up until now, the most dominant advertising means in Asia have been print and TV.
However, the continent is about to see digital become its main medium in 2017 for the first time, with total spend forecast in the region of $70-$80 billion. The quick shift from TV to digital in Asia follows the global trend, but has been greatly accelerated by a combination of significant infrastructural investment in internet and mobile connectivity, as well as the proliferation of smartphones (see below).
Mobile first consumers
Mobile advertising is also on the rise; figures from eMarketer, 2016, show that countries like Japan and China are leading the global shift towards mobile-based marketing.
eMarketer estimates that one quarter of the world’s smartphone users live in China and, in other developing Asian countries, mobile has become the online medium of choice from the offset.
This is driving a mobile and digital ad boom which is leading to the swift switch from print to digital, supported by increasingly rapid mobile internet speeds. Large global companies are seizing the opportunity to find new ways to reach people via their mobiles.
For example, Nescafé China recently launched Moodlock in partnership with Ogilvy. Moodlock taps into the (over) use of smartphones in China. Its a phone case that allows friends to lock the users phone via a smartwatch app, ensuring that they focus their time on real life connections.
In the next article in this series we’ll look at how Asian consumers are changing across the region, picking out some key generational and country trends.