There is a sense of foreboding across Asia, due to growing uncertainty around the macro landscape.
The advertising market is stable with a number of bright spots in key markets but growth has dimmed, clouding earnings visibility for media owners.
The latest estimates from Media Business Asia publisher Media Partners Asia (MPA) call for a 5.3% increase in net advertising revenues (measured after discounts) for the region in 2013, and close to 7% growth in an event-driven 2014.
Advertising grew by 5.4% in 2012, according to MPA projections.
“Media growth across much of Southeast Asia is strong, while positive indicators continue to emerge in Japan,” says Vivek Couto, MPA director.
“China remains robust in spite of a slowing economy, but India remains in a soft spot and Korea has experienced a sustained slump in recent months. We have also further downgraded Australia,” Couto adds.
“Together, these are three large markets, which account for 25% of the total ad pie in aggregate.”
India’s economy is expected to grow at a sub-par 5-6% this year and next, undermined by the lack of real policies and political scandals, and further exacerbated by a weaker rupee, significant capital outflows and poor investment trends.
A turnaround will take time, potentially driven by new political leadership post-2014.
Lower inflation, more investment and improved consumption could start becoming a reality in 2014, picking up in the second half.
The advertising market is expected to grow by 7.2% this year and by 10.6% in 2014.
“Advertisers generally remain cautious this year, but will allocate more budget in 2014,” comments MPA analyst Mihir Shah.
Korea and Australia are also experiencing tougher times.
Korea’s advertising market is expected to grow by only 1.4% in 2013, with terrestrial TV in a slump, pay-TV uneven (a disappointing Q2 in particular) and print weak. Even online is less stellar than usual.
However, the market is expected to rebound to 6% growth in 2014, underpinned by a stronger economy.
The pace of ad growth in Australia meanwhile continues to deteriorate.
Data from advertising tracker SMI showed a decline of 0.7% for the first half of this calendar year, with television marginally above flat, though digital growth came in at 24%.
Consumer confidence is modest and retail sales are soft, while key advertisers have little long-term market visibility.
Spends from the government category have been strong, while there have also been increases in banking and finance. Nonetheless, all other major categories are down year-on-year.
Federal elections in the second half of this year will provide a welcome boost, along with a more solid economy in 2014.
The overall market is expected to grow by 3.4% in 2014, after a 0.7% crawl in 2013.
As a leading independent consulting and research provider focused on Asia media & telecoms, MPA offers a range of customized services to help drive business development, strategy & planning, M&A, new products & services and research. Based in Hong Kong, Singapore and India, MPA teams offer in-depth research reports across key industry sectors, customized consulting services, industry events to spread knowledge and unlock partnerships, and publications that provide insights into media & telecoms.
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