No-one will shut up about Asia and it's easy to see why. Anyone who has spent time there recently will detect a contagious sense of optimism that exists almost wherever you are.
Advertiser confidence is rising and media owners are sanguine about the prospects for growth. According to JP Morgan, ad budgets will grow by 8.3 per cent across the continent during 2004. China is cast in the role of powerhouse, leading the way with a hefty 18.3 per cent uplift, ahead of Thailand (8.8 per cent), Malaysia (5.7 per cent), Hong Kong (5 per cent) and Singapore (4.9 per cent).
"China continues to ascend the global priority list for just about every company that professes to be global," MindShare Asia-Pacific's chairman, John Steedman, says. "China has reached the point where a company or brand's performance in that country is impacting on how the company or brand performs globally."
The Sars crisis dampened growth last year but now that it has been overcome the prospects for growth are lofty. "In China, the pace of growth is so fast that advertisers must be wary of media costs," the Initiative Asia-Pacific chief operating officer, King Lai, says. "Advertisers have to look at media inflation and compare the figures with other indicators, such as GDP growth, to make sure they are picking the right channels for the proper return."
TV remains by far the dominant advertising medium in China, accounting for about 78 per cent of advertising revenue. The leading TV network, CCTV, now offers more than ten free-to-air channels, money is being poured into upgrading cable systems and some of the major city and provincial TV stations are distributing their channels on satellite for the rest of the country to pick up.
Last year's auction of TV airtime by CCTV beat all previous sales records, raising more than $500 million for the 224 slots for 2004. More than 150 advertisers competed for the slots, with the Inner Mongolia-based dairy company Mengniu emerging as the highest bidder.
Domestic companies still account for about 70 per cent of spend, large chunks of which comes from pharmaceutical and healthcare companies. China's car market is the world's fastest growing and car advertising is growing with it - Initiative says spend from China's car sector grew a staggering 119 per cent during the first eight months of 2003.
But media owners are still finding China a tough place to make money.
Chris Steward, the senior vice-president of ad sales for MTV Networks Asia, says: "The Chinese authorities are hesitant, for want of a better word, about giving foreign media owners access to the Chinese population."
The State Administration of Radio, Film and Television has been cautious in increasing "landing rights" for foreign media companies. MTV, for example, has had to be patient, first syndicating its content to other broadcasters for several years before securing a licence to launch a fully branded 24-hour channel.
SARFT has imposed some restrictions on commercial airtime, which has led to rising ad rates. "The television market is starting to become cost prohibitive in China's main urban centres and recent government legislation to limit the amount of commercial minutage in primetime will only fuel this," Steedman says. "That said, we believe there are increasing opportunities in the area of content provision, product placement and sponsorship-type opportunities as the growing number of TV channels fight to provide quality viewing."
On the whole, the picture in China is positive, with media owners scrambling to get in on the action. Chinese versions of Maxim, Newsweek and OK! have launched this year. Publishers do, however, face the challenge of maintaining journalistic integrity in the face of pressure to keep editorial in line with government thinking.
India is one of the other Asian markets to watch, driven by its reputation as the world's biggest outsourcing economy. Around eight million new jobs were created in the county during 2001 and 2002 and the IMF expects India's economy to grow by 6 per cent this year - good news for the media market, particularly TV. In urban areas, terrestrial TV is now in 80 per cent of homes and satellite is at 46 per cent penetration. Radio, mobile marketing and internet are experiencing strong growth in India, too.
Outdoor has flourished across the region, in part due to the escalating cost of TV airtime. "Outdoor has boomed in the past few years, with some great use of street and underground posters," Tess Caven, the Mediaedge:cia Singapore managing partner, comments. "This has dropped off a bit lately, except in Singapore where this is one of the few media that provides leeway for innovation."
Opinion is divided on Indonesia. Despite the uncertainty of the country's political situation, Steedman feels advertising growth could outstrip most of its neighbours. "Unless there is a major uprising during the elections later in the year or more bombs, we see no reason why this growth cannot be sustained," he says. Caven is more downbeat about Indonesia and the Philippines, thinking they may not live up to their promise.
Japan, an advertising giant whose economy has been troubled for almost a generation, is showing signs of health.
"China's adspend is the second biggest in the region after Japan," Vivek Couto, the director of content and research at Media Partners Asia, says.
"India has significant room to grow. It is really going to catch up. There's a big middle class advertisers are keen to target. Its ad market grew by about 9 to 10 per cent last year."
In Caven's view, growth is sustainable across Asia if "confidence-shattering disasters" such as the Bali bombings and the Sars epidemic are not repeated. She also believes advertisers need to pump more budget into campaign monitoring and evaluation. This will help them to get a better handle on what they're getting for their money and highlight the negative impact cutting spend would have on their brands.
So how are Asia's media markets changing to cater for advertisers? At the moment, there are few opportunities for cross-platform deals as there are only a handful of media owners, such as Time Warner and News Corp, that own a variety of channels. But as the global media companies build their portfolios, scope for more cross-platform deals will grow.
Steedman believes that creative media ideas will also burgeon in the region to build stand-out as things get cluttered. MindShare's work for the deodorant brand Rexona in Malaysia, a multimedia effort culminating in a series of events called The Rexona No-Sweat Challenge, shows the growing sophistication of the way agencies are working more creatively with media owners, Steedman says.
The year has begun well for the region, with advertiser confidence less fragile than in recent times and media owners pursuing ambitious expansion plans. But despite the dizzy euphoria of such heady growth, there are rumblings of discontent from advertisers. Media owners should be careful not to raise their prices too quickly, or the companies starting to spend again will leave just as quickly.
HOW ASIA WILL GROW THIS YEAR
Country TV 2004 vs Radio 2004 vs Press 2004 vs
(dollars 2003 (%) ($2003 (%) (dollars 2003 (%)
000s) 000s) 000s)
Australia 1,909,106 8.0 441,393 5.8 2,511,720 5.1
China 17,678,021 15.0 200,785 10.0 4,836,596 15.0
India 1,044,329 24.9 53,282 1.8 1,447,866 15.4
Indonesia 1,785,248 20.0 40,415 15.0 787,890 38.2
Japan 18,312,039 4.2 1,600,590 1.0 13,627,086 3.8
New Zealand 356,300 7.0 129,152 6.0 509,242 6.0
Singapore 258,748 8.0 60,478 10.0 247,171 7.4
Taiwan 1,541,077 4.3 - - 762,608 8.0
Thailand 1,120,003 18.6 181,107 9.4 488,512 21.6
Country Outdoor 2004 vs Total estimated 2004 vs
($000) 2003 (%) adspend in 2003 (%)
Australia 152,775 -3.7 5,051,130 5.9
China - - 22,715,741 15.0
India 134,271 10.2 2,694,668 18.2
Indonesia - - 2,613,553 24.9
Japan 2,553,365 5.0 36,888,645 4.1
New Zealand 25,360 10.0 1,025,738 6.5
Singapore 33,297 8.0 630,118 7.9
Taiwan - - 2,303,684 5.5
Thailand 114,383 28.7 1,930,218 20.1
INTERNATIONAL MEDIA PIONEERS IN ASIA
The lads' magazine Maxim has launched in Hong Kong and China through a partnership between Dennis Publishing in the UK and the SCMP Group, the publisher of Hong Kong's leading English language newspapers including the South China Morning Post. Cover prices are HK$35 and RMB20. "The time is right for Maxim," SCMP Consumer Magazines' director, Angie Wong, says. "We are convinced that its unique editorial formula and strong brand recognition will make it an instant hit."
Editorial formula will include an irreverent but down-to-earth tone, coupled with information on everything from cars, girls, gear and gadgets to sport and entertainment, food and drink, travel and sex. The core target audience is 23- to 35-year-old affluent males. Projected Hong Kong newsstand sales are expected to reach 40,000.
The Chinese version will be distributed in 32 cities nationwide and has a projected circulation of 120,000.
The title hopes to take advantage of the dramatic social changes underway on the mainland, which have resulted in a scarcity of relevant reading for a whole generation of better-educated, later-marrying, success-driven professionals who are looking ahead and want information to guide them in their consumer and lifestyle choices.
Announcements on local partners for both Thailand and Singapore are expected shortly, with launches in those markets expected before the year is out.
A Korean edition was launched last year in partnership with DMZ Media.
Maxim will be squared up to Emap's FHM, which has unveiled plans to launch in China later this year. FHM's Chinese partner is Trends Publishing which also publishes Esquire in China.
A Chinese-language monthly, launching in June 2004, Newsweek Select is a joint venture between Newsweek International and the Hong-Kong based Vertex Group. It is targeting China's affluent and educated elite, with 77 per cent of the magazine's total circulation to be distributed around Beijing/Tianjin, Shanghai and Guangzhou/Shenzhen. The initial print run is 80,000 copies. Controlled circulation will form the majority of its distribution, although there will also be some availability at airports, bookshops, hotel kiosks and on planes. Full-page ratecard is $12,300.
MTV Networks is tight-lipped about the details but will confirm that it is to launch its children's channel in South Korea at some point this year. MTV Networks Asia's senior vice-president of ad sales, Chris Steward, pronounces himself "optimistic" about the advertising opportunities.
A Chinese version of Richard Desmond's celebrity gossip magazine OK! is set to be launched in June or July this year. The Chinese company Cinezoic Media has acquired a ten-year licence to publish the title. OK! has an initial monthly frequency but will switch to weekly publication like its UK sister later this year.
A Thai-language version of the fashion and beauty magazine launched in April. It will have 200-plus pages per issue, with a local to international content ratio of 70:30. The initial print run is 100,000 copies, building to 120,000 if all goes well. Hachette Filipacchi-Post, in which The Post Publishing Plc, the publisher of the Bangkok Post, holds a stake, is jointly launching the magazine with France's Groupe Marie Claire.
WALL STREET JOURNAL
Dow Jones, the publisher of The Wall Street Journal, and Bennett Coleman & Co, the publisher of The Times of India and The Economic Times, announced in January a joint venture to publish The Wall Street Journal for India.