Feature

World Media 2007: Asia-Pacific

Economic growth in the world's most populous countries has meant impressive growth in their ad expenditure. Has the Asia-Pacific ad market already eclipsed that of Western Europe?

The onward march of China's economy continues to dominate the Asian picture. Given the impending Olympics in Beijing in 2008, the market is expected to rise even more strongly in the next year. ZenithOptimedia estimates that, by the time of the Olympics, China will overtake France to become the fifth largest ad market in the world.

Neighbouring India, with a population not far short of that of China (1.1 billion), is also caught up in a period of massive growth. But the indications are that India is less well-equipped to deal with the sort of growth rates that it is experiencing. Demand there is outstripping supply.

Despite the huge expansion in these two bull economies, the steady growth in South Korea and Taiwan and the gradual recovery of Japan, there are concerns about high oil prices and rising inflation across the region. Estimates of media growth vary.

But there's no denying the promise of some markets. In China, growth in real GDP is expected to slow a little, from more than 10 per cent in 2006 to 9 per cent in two years' time. But that's still an impressive increase. According to recent research by PricewaterhouseCoopers, China is expected to become Asia's largest market for media and entertainment within three years, surpassing Japan, with wider access to broadband internet and growth in the video game industry. PWC estimates annual growth of the market at 18 per cent, against world annual growth of 6.6 per cent.

In India, the signs of economic boom are everywhere. For agencies, there's a tempting shortfall in adspend as a percentage of GDP, when compared with other countries. Rising levels of literacy and a growing middle class, as well as the relaxation of rules on foreign investment, all offer potential for growth. But India's infrastructure is more than a little patchy, and capitalising on the obvious potential of an economy growing at around 8 per cent a year is not plain sailing.

In the highly developed Japanese market, the economy is inching its way back from the devastating recession of the turn of the century. Its GDP growth rate for the next year is forecast to be less than 2 per cent, but under a new prime minister, Shinzo Abe, there are signs that it may attempt to show leadership across the region. It has been reluctant to display authority on the political scene since the Second World War, but Japan needs to rise to challenges in the region and there is potential for the world's second largest economy to exert some authority.

The tiger economies - Hong Kong, South Korea and Taiwan - while still growing appreciably, are now a little more like pussycats than the big beasts they were a few years ago. Malaysia, the Philippines, Singapore and Thailand are on a pretty even keel, both in terms of rising GDP and of media growth in the region.

The fire crackers on the pan-Asian landscape are Indonesia and Vietnam. Both economies are set to grow at above 6 per cent next year, but media has been particularly strong. Back under democratic rule since 2004, Indonesia's adspend is forecast to rise to $5.2 billion by 2007, with a three-year growth rate of 89.8 per cent, putting it second only to Russia among the world's surging ad markets.

All in all, the outlook is rosy. The growth of India and China has led some to argue that in 2006 the Asian advertising market had already overtaken Western Europe.

ADVERTISING EXPENDITURE
USdollars million at current prices. *Estimated
Total News- Maga- TV Radio Cinema Out- Online
papers zines door
2000 70,595 23,224 5,729 30,171 3,592 98 7,002 780
2001 70,991 22,938 5,807 30,556 3,659 93 7,050 887
2002 71,684 22,544 5,831 31,521 3,693 94 6,875 1,127
2003 75,991 23,791 6,024 33,443 3,850 109 7,189 1,585
2004 81,121 24,631 5,889 36,011 4,089 194 7,874 2,434
2005 85,496 25,144 6,166 37,993 4,287 190 7,964 3,751
2006 90,542 26,329 6,304 39,662 4,516 197 8,466 5,067
2007* 96,217 27,459 6,463 41,919 4,752 208 9,024 6,391
2008* 103,334 28,810 6,669 45,190 5,113 235 9,641 7,676
2009* 109,441 30,049 6,829 48,036 5,364 278 10,186 8,700

TOP 20 FASTEST-GROWING AD MARKETS
USdollars million at current prices.
Rank Country Year-on-year Total spend Total spend
% change 2006 2005
1 Egypt 47.3 837 568
2 Saudi Arabia/Pan Arab 39.0 3,924 2,823
3 United Arab Emirates 36.8 1,333 974
4 Romania 34.4 413 307
5 Russia 30.1 6,516 5,010
6 Qatar 28.5 121 94
7 Kuwait 26.6 500 395
8 Vietnam 25.2 418 334
9 Lithuania 22.4 389 318
10 Slovakia 20.6 1,145 949
11 Poland 19.6 4,749 3,970
12 Estonia 19.0 108 91
13 Indonesia 17.2 3,299 2,814
14 Bulgaria 17.1 469 400
15 China 16.4 11,378 9,775
16 India 15.8 4,248 3,668
17 Brazil 13.7 7,386 6,496
18 Hong Kong 13.3 2,848 2,515
19 Latvia 12.4 119 106
20 Turkey 12.2 1,885 1,680

REGIONAL AD MARKETS GROWTH
Year-on-year % change
Vietnam 25.2
Indonesia 17.2
China 16.4
India 15.8
Hong Kong 13.3
South Korea 5.1
Malaysia 4.5
Taiwan 3.1
Singapore 3.1
Japan 2.3
Philippines 1.8
Thailand 1.5