New numbers from Media Partners Asia (MPA), publisher of Media Business Asia, indicate that ad growth across the region slowed in 2011, especially in the second half of the year.

Net ad revenues in Asia, calculated after ratecard discounts, increased 8.9% in 2010 but by just 5.3% in 2011 according to MPA analysis, with 7.3% growth forecast for 2012, and 7.1% for 2013.

“Consumer sentiment in China, India and Southeast Asia softened in Q1,” says MPA director Vivek Couto.

“But we still expect robust ad spending patterns for key markets in 2012, especially Indonesia (15% growth), China (14%) and India (12%), followed by Thailand and the Philippines (8% growth for both markets).

“A major turnaround in Japan is perhaps the most important event for the region as underlying demand across TV and online platforms picks up, boosting ad spend growth to 3% in 2012.”

Spending shift

Other important trends are also running alongside the macro momentum, highlighting a shift in budgets and an acceleration in M&A activity.

By the end of 2012, TV will have a 36.1% share of the Asia-Pacific advertising pie, relatively stable versus three years ago.

At the same time, online will have grown its share from 12.8% to 18.2%, largely at the expense of print (with share declining from 28% to 24%) and, in some cases, free TV.

In Australia, ad budgets continue to shift online with little upside for both print and free TV, which will likely continue to act as a powerful catalyst for consolidation, both within traditional media as well as new combinations across free TV, pay-TV, print and digital media.

In Korea, ratecard increases and new competition are driving the TV market, while mobile internet growth is driving online, though competition in both sectors is leading to the development of large-scale media conglomerates, with exposure to advertising and subscription revenues.

In Japan, ad dollars are returning to free TV again in a surprisingly stable fashion, though digital media remains on a more significant growth curve.

Different dynamics

Meanwhile, within the double-digit growth mantra of TV advertising across Southeast Asia and India, there are other stories to tell.

Indonesia’s TV ad market (with a ~70% market share) grew by 20% in Q1, according to gross ad spend data, but most of the gains are being realized by MNC Group’s two main stations (RCTI and MNCTV) at the expense of rivals such as Emtek and Para Group, due to stronger ratings and shows.

In the Philippines, TV5 is capturing most of the growth in the small marketplace while its owner PLDT is close to buying GMA, the country’s second-largest TV network after ABS-CBN.

This would effectively create another entrenched duopoly, this time between PLDT, which owns telecom and media assets, and the Lopez Group, owner of ABS-CBN with assets in production and pay-TV.

Thai renewal

Encouragingly, Thailand’s ad market appears to be recovering from the impact of last year’s floods. Gross ad spend in February rose 3% year-on-year and by 11% on a monthly basis according to Nielsen.

Terrestrial TV advertising benefited in particular, driven by a number of rate increases. Leading broadcaster BEC World is already guiding for 10-15% ad growth, driven by rate increases in non-primetime slots and lower discounts for primetime slots.

As of Q1 2012, FMCG brands have not yet increased spend in Thailand, but demand is returning through increased budgets from the telecoms, automotive and financial categories.

Improving consumer sentiment prompted by a new government stimulus package should help boost the economy, and could in turn renew demand across the FMCG category.

Both the Olympics and European Championship football are expected to provide an additional boost, with MPA analysis calling for 8.3% growth this year (after a 5.9% rise in 2011), and 8.5% in 2013.