Macro conditions around the world remain uncertain, clouding the outlook for Asia’s media economies. The good news is that the shape of Asia’s advertising growth is stable, and pointing upwards.

Furthermore, 2014 promises to be a stronger year, driven by a sustained economic rebound together with key sporting and political events.

The latest forecasts from Media Business Asia publisher, Media Partners Asia (MPA), indicate that net advertising revenues in Asia, measured after discounts, will grow by 5.4% in 2013 after a 5.6% lift in 2012, with a more significant 7% increase projected for 2014.

“2013 will be the third successive year we’ve had of 5%-plus growth in Asia,” says MPA executive director Vivek Couto.

“Japan’s advertising market remains in positive territory for the second year running, and that’s a big plus, while China remains a steady anchor. Korea is growing at a reasonable pace again.

"In Southeast Asia, the Philippines and Indonesia are buoyant and robust.

“Over the next two years, various elections in Southeast Asia, India and Australia, as well as the 2014 Fifa World Cup, should help boost demand,” Couto adds.

“In addition, we see a significant rebound in India in 2014. Australia, so soft and weak since 2011, should also start to strengthen.”

TV stable

By the end of 2014, TV’s share of the ad market across the region will remain stable at 42%, with digital’s share touching 20%.

China will contribute the most new dollars by far to the pie between 2012 and 2014, followed by Japan, India and Indonesia, with Australia and Korea close behind.

After a volatile first half to 2012, the macro environment across most key Asian markets stabilized by the end of the third quarter and started improving in the last three months of the year, driven by a renewal in exports in particular.

Globally however, the external environment is still challenging because of drags on growth in the United States and Europe.

“The global slowdown continues to form a near-term headwind to the growth trend for the region,” says Chetan Ahya, an economist with Morgan Stanley.

“But the global economy is expected to transition from twilight to daylight in the second half of 2013 and 2014.

“Momentum is now on the upswing, but we expect global growth to stay in the twilight zone for one more quarter,” Ahya adds.

“Later this year and next, US private sector healing and re-leveraging, the potential end of the Euro-area recession, and more global monetary easing, led by Japan, should propel global growth into daylight.”

A gradual recovery

While a gradual recovery lies ahead, Ahya warns that external and domestic headwinds still exist.

Domestic demand, fairly robust in markets such as Indonesia, will show only modest gains overall, due to the lack of policy reforms.

This year, a number of economists have upgraded their growth outlook for Malaysia and Thailand.

India, however, has been downgraded again.

In Indonesia, fiscal deficit is a key concern but fundamentals remain strong.

In terms of the ad markets, MPA has implemented successive downgrades on Australia, as well as one for India (for 2013) with a small adjustment for Indonesia, factoring in the start of election-related spends from December this year, as opposed to June.