Asia media fundamentals remain robust, as softening economic activity has yet to adversely impact advertising in emerging markets. Nonetheless, net ad growth across Asia-Pacific will moderate this year to a 5.2% increase projected by Media Partners Asia (MPA), versus a 5.5% lift in 2012.

MPA forecasts 6.8% growth in 2014, driven by: (1) The 2014 Fifa World Cup football tournament; (2) National elections in Indonesia and India; (3) Firmer economic growth in China and Korea; (4) An advertising rebound in Australia and Korea.

“Trading conditions in media are stable though FMCG advertisers are closely managing their budgets across Southeast Asia,” says MPA director Vivek Couto. “Macro conditions suggest some pressure points and as a result, consumer confidence has weakened,” Couto adds.

“In general however, key advertisers are still focused on expanding distribution and spending on marketing. The emphasis is to invest to grow brands in emerging markets, irrespective of a macro-driven consumption slowdown.”

Economic trough in India

India has also suffered from negative news flow, economic softening, rising current account deficits and growing inflation, exacerbated by a political vacuum.

There is substantial capital outflow pressure in India, with current account deficits growing more than five-fold over the past five years to about US$90 billion, driven largely by high oil and gold imports.

For FYE March 2014, economists expect current account deficits to narrow because of slowing domestic demand and lower gold imports, led by tariff hikes.

Key structural reforms in the pipeline on tax and subsidies are positive, but the next big catalyst is likely to be the national elections (due April/May 2014).

MPA remains cautious on prospects in India, guiding for net advertising growth of 6.6% in 2013 and 9.4% in 2014. At the same time, India’s leading media buyer, GroupM, recently revised its ad growth estimates for 2013 down to 8.5%, from 9.9%.

There are some green shoots of recovery emerging, including a strong monsoon and election-led government spending.

An above-average monsoon season is helping boost agricultural output and rural household consumption this year, boosting both the economy and media as local ad categories such as FMCG, two-wheeler autos and basic durables benefit. Both state and national elections will also boost consumption and advertising next year.

Advertising on pay-TV (ex-news) and regional print is likely to be relatively robust, while digital will continue to grow strongly from a low base. English print media, TV news channels, FM radio and OOH media will remain under pressure, however.