Asia Pacific advertising spend to grow by 4.5% in 2018 as FIFA World Cup stimulates growth

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· Forecast growth revised up to 4.5% from 4.2% in January 2018

· Digital to overtake TV for the first time, to reach 45.5% of Asia Pacific share (TV 33.5%). 

· One quarter (24.9%) of Asia Pacific ad spend will be delivered through mobile devices for the first time

· China’s advertising market is predicted to grow 6.5%, up from the previous forecast of 5.4%, to reach RMB 630 billion – 16.2% of global ad investment. 

Leading advertising and digital communications group Dentsu Aegis Network released its biannual global forecasts, pointing to a more positive 2018 for Asia Pacific advertising expenditure than previously expected. Ad-spend growth will rise from 4.0% in 2017 to hit 4.5% in 2018 - higher than the 4.2% forecast in January 2018 and taking total investment to USD 215.95 billion. Regional events such as the 2018 World Cup will be held in Russia, 2018 Winter Olympics South Korea, Asian Games in Indonesia and Australian federal election will play an important role in stimulating growth. 

Geographically, Asia Pacific is a major growth region, contributing 41% of the global increase (USD 613.5 billion). Comparatively, North America accounts for 32%, Western Europe accounts for 13% with Latin America at 8% and Eastern Europe 5%. 

Commenting on the latest forecasts, Nick Waters, CEO of Dentsu Aegis Network Asia Pacific, said: 

“The region as a whole displays a positive outlook with increasing growth rates. We are seeing upward revisions in most key markets, with India, the Philippines and Vietnam showing high rates of growth. Spend in China continues to grow at pace, though driven almost entirely by the ecommerce platforms, Alibaba, Tencent and Baidu.

“Digital remains the dominant growth area with a quarter of Asia Pacific advertising spend expected to be delivered through mobile for the first time. Digital will be the leading form of advertising in half of the markets that we track in the region,” Nick added.

China’s advertising market is predicted to grow 6.5% in 2018, up from the previous forecast of 5.4%, to reach RMB 630 billion – 16.2% of global ad investment. Growth will be driven by digital, which is forecast to command 60% of advertising spend and increase by 14.8%. The online giants Baidu, Alibaba and Tencent (BAT) are projected to contribute around 80% of this growth, underlining their dominance of the marketplace. The China ad market is forecast to grow by 6.0% in 2019 driven by a 12.5% growth in Digital spend, with E-commerce spend forecast to make up 40.5% of total digital spend in 2019. Mobile payments are also one to watch in the coming years as platforms such as WeChat or Alipay make cash obsolete in large parts of the country.

Commenting on the momentum, Susana Tsui, CEO of Dentsu Aegis Network China, said: 

“China and the United States are the two major contributor to global new ad dollars in 2018, accounting for around one quarter and one third of new growth, respectively. Mobile becomes the key enabler of China’s highly convergent media environment with digital technology shaping the way of brand experience that we created in our businesses. Our opportunities lie in how we maximize the value of data to drive people-based marketing with engaging and powerful experiences”.

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