Singapore – Despite the decline in the advertising industry last year due to the pandemic, it proved to be less severe as they continued to roll out into this year, as new findings from advertising company dentsu projects the industry to see significant growth by 2022 at a rate of 6.3%, including within the Asia-Pacific region.
While 2020 remains the weakest performing year since the global financial crisis, the decline in growth has been raised since dentsu’s January 2021 forecast from -8.0% to -5.2%. In 2021, the market is seeing an 8.0% growth recovery, an improvement of 2.1% points on January’s prediction. Looking to 2022, recovery is set to continue when spending is likely to reach US$243.6b.
The forecasted growth of the advertising industry is highly attributed to the increase in ad spending among brands agencies, both regionally and globally.
According to the report, ad spend in APAC is expected to grow by 8.0% or US$17b to US$229b. In the region, Australia and India are forecasting particularly high growth rates in 2021, with 2021 growth expected to exceed pre-pandemic levels in China.
The report also noted that in APAC, the 6.2% rise in digital spend last year is forecast to grow by 12.8% in 2021 to reach US$124.5b, representing a 54% share of total ad spend globally. Forecasts for social and video will increase by 33.4% and 10.8% respectively, as well as within the search advertising space, targeted at a 7.8% increase, therefore reaching digital spend to US$23.1b in 2021.
With restrictions lifted on social activity, out-of-home (OOH) advertising will see a bounce back post impact of the pandemic, rising 7.5% in 2021 in the region. Cinema has a slightly longer recovery, with a decline to 5.0% in 2021, yet expected to bounce back in 2022. Radio will also see growth by 4.3% in 2021.
Regional live events such Tokyo Olympics and Paralympics Games have continued to be a significant driver of growth in linear TV ad spend in APAC, which has noted 3.9% increase in 2021 to reach US$59.2b. Data suggests a shift towards connected TV (CTV) and over-the-top (OTT) media and audiences moving more towards digital media consumption mean linear TV spend will remain below pre-pandemic levels until beyond 2021.
“It is promising to see a return to growth in the APAC region with two of our markets in the top five contributors of ad spend growth; China and Japan. While China continues to see strong levels of growth driven by digital and OOH, Japan’s growth will be buoyed by events like the 2020 Olympic & Paralympic Games, and the House of Representative elections [in Japan] and the advertising spend associated with it, particularly in TV,” said Ashish Bhasin, CEO for APAC at dentsu international.
He also added that Australia and India are two of the top year-on-year growth markets, forecasting a surge in ad spend.
“Australia has had a stronger economic recovery after the pandemic particularly in TV and Digital where the government focused much of their COVID-related campaigns, while India is expected to see a resurgence in Digital advertising spend though TV is still the main contributor with a 40.9% share,” Bhasin added.
Meanwhile, Prerna Mehrotra, CEO for media in APAC at dentsu international and managing director for media in Singapore at dentsu, commented that they are optimistic that the region will bounce back to positive growth in ad spend, with some channels likely boosted higher than pre-pandemic levels. She also noted that the main driver behind the growth is economic recovery, with the APAC GDP set to increase by 7.3%, and a stronger-than-ever push to digital marketing.
“Serving as a stimulus the pandemic has accelerated digital adoption. Digital media will continue to drive ad revenue growth this year with a strong performance in social (+33.4%) and video (+10.8%) and the majority of spends in mobile. We will also see more investments diverted towards addressable and the digitalization of OOH channels,” Mehrotra stated.
She added, “Programmatic DOOH will also be a key growth driver in the future. With the growing numbers of supply-side platforms (SSPs) and demand-side platform (DSPs) partnerships and increasing demand for location-based solutions to ad-reaching consumers in these times of uncertainty, advertisers will benefit from the speed, flexibility and targeting capability that the medium will provide.”