Advertising revenue in the Asia Pacific region has grown 4.5% to $139 billion in 2016 compared to the year before. Analytics firm IHS Markit expects the ad revenue to increase further to reach $182 billion by 2021.
The latest report covers Australia, China, India, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore and South Korea, collectively referred to as Asia Pacific. The region is now responsible for one third of total global ad revenues in 2016.
Qingzhen Chen, Senior Analyst at IHS Markit explains that the local advertising market had been supported by a solid performance of traditional TV ads and a rapid growth of online media.
“[This] stronger growth […] was underpinned by structural drivers, such as rising consumerism, the emerging middle class, as well as rapid mobile device adoption by a younger demographic in the developing markets,” she said. “These factors will continue to propel the growth of advertising in the longer term. In contrast, growth for mature ad markets like Australia and Japan continues to be predominantly driven by innovation, better audience measurement, and digital adoption of traditional media via ‘out-of-home’ access.”
TV media overall dominated the region in 2016, accounting for 39% of total ad spend. TV commercials are expected to increase at a CAGR of 2.2% until 2021 in the Asia Pacific region. As online media is boosted, IHS Markit said it expects TV to decline to 34% by 2021.
Kia Ling Teoh, Analyst at IHS Markit, explained:
“While traditional TV media still remains an important revenue generator in Asia Pacific, print ads are expected to see imminent change over the next few years. Print ad has been growing in India, for instance, and it remained the dominant advertising medium in Singapore in 2016. However, we expect publishers to further trim their newspaper business moving forward, which has already taken place in Australia, New Zealand and Malaysia.”
The new IHS Markit reports suggests that online advertising jumped a whopping 301% CAGR between 2011 and 2016. The analysts expect it to continue to grow at a CAGR of 11.9% between last year and 2021.
Overall, online is still way smaller than traditional TV and features such as connectivity and broadband infrastructure make it more difficult to grow faster, according to Teoh.
Looking at separate countries, the report highlights China’s expected lead at a total 63.1% of online ad revenue market share in the region by 2021. Half of the Chinese population, around 650 million, are online users. That makes the country a particularly attractive market for mobile and digital marketers. Chinese internet firms such as Alibaba, Baidu, CCTV and Tencent rank as the top 2016 media owners.
“Domestic online companies continue to invest aggressively into digital advertising, and foreign publishers show no sign of retreat from trying to enter the market, notwithstanding tightening content and ad regulations.”