Asia’s advertising prospects over the course of 2013 have been weighed down by global fragility, regional macro pressures and softening local consumption.

Year-end forecasts from Media Partners Asia (MPA), publisher of Media Business Asia, indicate that net advertising expenditure, measured after discounts, will register only 5.1% growth in Asia-Pacific this year, the lowest in five years.

The deceleration has come from a weaker environment in Australia, India and Korea, with Hong Kong and Singapore not far behind.

At the same time however, demand has been relatively strong in China, Indonesia, Malaysia, Thailand and Vietnam, while activity has also picked up in Japan. It’s been an uneven year.

Widespread renewal

MPA analysts anticipate renewal across much of the region next year, buoyed by more stable economic activity, firmer global demand, local elections in a number of Asian markets, and the 2014 Fifa World Cup tournament. As a result, net advertising is expected to expand by 6.9%.

“Critical to the cause over the next 12 months is an improved pace of growth in Australia, India and Korea,” notes MPA executive director Vivek Couto.

Japan, Taiwan and Singapore are also expected to put in a decent performance next year, Couto adds, while election-related spends and robust organic demand will power Indonesia to 20%-plus growth.

China – although maturing fast – will grow at a double-digit pace as well, with its expansion contributing more than half of Asia-Pacific ad growth next year.

There are invariably some risks to the forecast, largely due to global macro volatility. 


In general, most economists expect external demand in Asia to improve, although inflation is expected to inch up, albeit moderately. One key danger is potentially higher interest rates to curb inflation.

“This is important to watch, since a disorderly adjustment of rates could hurt the balance sheet of households, manifesting in financial sector stress and dragging down consumption and domestic demand in many important markets,” says Taimur Baig, chief economist with Deutsche Bank.

Encouragingly, Asia should reap the benefits of an export upswing next year, capitalizing on growth momentum in the US (~3% real GDP growth forecast next year) and a steadier Eurozone (1-1.5% growth).

This will boost economic growth across Asia, with some predicting a strong rebound in 2014.

Deutsche Bank data suggests that Asia ex-Japan will grow by 6.9% in real terms next year, the strongest performance since 2011.

A good year for Asia's BRICs

The region’s two largest growth markets, China and India, are both on track for double-digit ad growth next year, according to MPA estimates.

China, an increasingly maturing dynamo, is expected to continue its transition to stable economic development, with 7.7% real GDP expansion next year, boosted by consumption and investment in public infrastructure.

Export demand could also drive growth higher than anticipated.

China’s ad market is expected to expand by almost 12% in 2014, after 9.5% growth this year, according to MPA.
The market remains the largest single source of global ad growth, forecast to contribute 31% of new spend in 2014.

“China is a surprisingly mature ad market,” says Adam Smith, futures director of leading media buyer GroupM.

“Advertising already accounts for 0.75% of GDP, which is on the global average, but must be among the highest in the world expressed as a percentage of China’s relatively small consumer economy,” Smith points out.

“Another indicator of China’s ad maturity is digital’s 24% share of measured media investment in 2013, in line with the Western Europe average.”

Advertising’s share of GDP, meanwhile, has barely changed since 2008, Smith adds.

“We should therefore expect the pace of growth in China to match GDP, which remains around 10% annually.”

GroupM sees advertising in China growing by 10.4% in 2014.

Indian uplift

India’s economy, meanwhile, has hit bottom, with an investment recovery likely in 2014. Export gains and stronger rural-driven consumption may also help shore up the economy.

Few, however, expect economic growth to top 6%, with consensus calling for 5.5-5.7% during 2014. Inflation is expected to stabilize next year, while pressures from capital flows should ease.

The key long-term driver (as well as inherent risk) will be parliamentary elections next year, with a majority government key for improved reform and transparency.

A stronger macro environment and election-related spends are expected to boost advertising growth from 7.2% in 2013 to 10.3% in 2014.