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28 June 2007
Hong Kong
Despite a ‘roller-coaster’ economic environment in the past 10 years, the advertising industry in Hong Kong has remained dynamic and has become more competitive than ever, driven by the rapid development in technology that has facilitated changes to the media landscape and consumers’ media consumption.
Media Consumption
According to the Nielsen Media Index, Hong Kong people have become more connected to the online world in the last three years, with increased internet penetration and yesterday usage of Internet increasing from 43 percent to 51 percent since 2004. At the same time, Hong Kong people have stayed glued to their TV sets over the past decade with viewing of pay-TV recording the most notable growth - from 17 percent with one pay-TV operator in 1996 to 46 percent and 4 pay-TV operators today.
With the total number of available newspaper titles increasing to 20 in 2006, the yesterday readership for newspapers in Hong Kong was 75 percent, mainly driven by readership of free newspapers. According to Vivian Choi, Associate Director, Nielsen Media, The Nielsen Company, around one-fifth of Hong Kongers claimed to have read free dailies the previous day. Since the launch of the two free dailies in July 2005, more people are now reading more than one newspaper every day. Yet the total readership of newspapers over the past 10 years has recorded a decline from 82 percent to 75 percent and interestingly, readership of monthly magazines has gradually risen from 14 percent in 1997 to 18 percent last year.
“People are more information-hungry these days, and turn to additional sources of information, rather than replace one with another as newcomers enter the media space,” Ms Choi added.
People’s consumption of various media is in direct relation to the investment of advertisers and the performance of the various media players. In 2006, total advertising spend in Hong Kong was $49Billion - an eight percent increase from 2005 - yet representing a substantial growth of more than double compared to that of 1997.
Table 1
Year on year growth was mainly fuelled by an increase in advertising revenue for print media, TV and outdoor. Compared to 1997, advertising dollars poured into print media increased by nearly two fold to $25Billion in 2006, while advertising spend on Terrestrial TV increased by 61 percent, outpacing the rapid increase in pay TV advertising from $99 million to $4.6 billion, and Outdoor, which has enjoyed a buoyant growth from $611 million to 2.6 billion over the same period.
Table 2
Accordingly over the past decade, Print media has gained in importance in the total Hong Kong media market, where the advertising pie has been further shared with the entry of new players for pay-TV and free-dailies. “Over the years, Print Media has increased its share in the advertising market, accounting for half of the total advertising pie today. Pay TV has also increased its share from one percent in 1997 to 10 percent in 2006,” continued Ms Choi.
The past 10 years have also seen competition within various industry sectors in Hong Kong, bringing about heavy advertising and promotions for a bigger share of voice. Competition in Telecommunications was strongest in the late 90s, showing by the number of telecommunications brands listed on the top 10 advertisers list. Today however, it’s the banking and finance and fast moving consumer goods sectors that are pouring heavy advertising dollars into the market.
A few major brands have appeared to be constant supporters of the HK advertising market, finding themselves among the top 10 biggest advertising spenders on many occasions in the past decade. Financial service provider, HSBC; McDonald’s from the quick service sector and the major chain retailer brand ParkNShop have been the top 10 spenders in advertising for the past 10 consecutive years, followed by Wellcome Supermarket (7 years), Hang Seng Bank (6 years) and Hong Thai Travel (6 years).
Table 3
Another trend observed by Nielsen’s ongoing Advertising Information Service is that more Chinese brands have entered the HK market with aggressive above-the-line campaigns. Take the personal care category as an example, VCNIC (???) has started advertising its product in Hong Kong since 1997 with an accumulated advertising expenditure of $97 million, while in recent years other players like Chi Choi (??), Janese (???) and Panver (??) have also stepped up the HK market with a substantial increase in advertising spending in the Hong Kong market.
Going forward, as Ms Choi puts it, online advertising, digital TV, product placement, mobile advertising and outdoor are all areas to watch. “We have observed the dynamics in outdoor and online advertising which we believe will gain pace quickly in the next few years.”
About The Nielsen Company
The Nielsen Company is a global information and media company with leading market positions and recognized brands in marketing information (ACNielsen), media information (Nielsen Media Research), business publications (Billboard, The Hollywood Reporter, Adweek), trade shows and the newspaper sector (Scarborough Research). The privately held company is active in more than 100 countries, with headquarters in Haarlem, the Netherlands and New York, USA. For more information, please visit, www.nielsen.com.
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