Hong Kong advertising market yet to benefit from the economic growth 2008 continues to be a challenging year for traditional media

February 29 2008
Hong Kong

Hong Kong recorded an advertising expenditure of HK$52billion in 2007 according to The Nielsen Company. The number also incorporated Nielsen’s increased coverage of exclusive data from Buspak for bus body advertising and Focus Media for outdoor video information in Hong Kong.

“Despite the considerably improved economy and consumer sentiment in Hong Kong in 2007, net net the advertising market only grew by six percent compared to 2006.,” said Ms Helen Pemberton, Director, Nielsen Media Research, The Nielsen Company, Hong Kong. “Competition in newspapers and TV was extremely keen, with the introduction of additional free newspapers and pay-TV, which may have impacted media buyers’ planning and advertising receipts for the respective mediums.”

The inclusion of advertising spending information from Buspak and Focus Media has lifted the market by HK$426MM or one percent of the total advertising market in 2007.

Growth in terrestrial TV was at a mild two-percent and reached HK$15.8 billion; newspapers recorded a six percent increase at $18.6 billion while magazines registered a 14-percent rise hitting $8.5 billion. Coming off a much smaller base, radio recorded a growth of 34 percent and reached $1.7 billion. Pay-TV in the meantime denoted a decline in ad revenue by three percent ($4.5 billion). Compared to 2006, TV’s share of the total advertising market in Hong Kong dropped by one percentage point (39%), while the share for print and radio remained stable at 52 percent and three percent respectively. (Table 1)

¹ All figures reported are based on published rate card.

Besides the traditional media, transport and out-of-home digital have become more attractive media for advertisers, registering a 13-percent growth in advertising spending in MTR ($1.2 billion), thanks to the new special format advertisements introduced by the railway company in 2007.

Top Category Spending
By category, ‘Medication/Tonic’, ‘General Retail’² and ‘Female Skin Care’ were among the top three most advertised categories in 2007. ‘Household’ (+19%) and ‘Travel’ (+18%) were the two categories registering the biggest growth among the top 10. In fact, nine of the top 10 categories dominated the list in the past three years. Replacing ‘Mobile Communications’ as one of the top 10 most advertised categories, ‘Education’ made inroads into the Top 10 for the first time in 2007 and recorded an increase in spending of 14 percent (HK$1,352MM) (Table 2). The total combined spending of the top 10 categories made up 40 percent of the total advertising pie.

It’s worth noting that free newspapers are becoming increasingly attractive to advertisers and gaining momentum in advertising dollars with their niche target audience. ‘Education’ remained the top advertising category in free papers, followed by ‘Loans and Mortgages’.

Top Advertisers Spending
Banking giant HSBC continued to be the biggest advertising spender in 2007, although an 12-percent decline was recorded in the bank’s total spending (HK$517MM). The only other bank on the top 10 brands list, Bank of China (Hong Kong) also cut its advertising spending by nine percent in 2007 (HK$346MM). Ranked 7th, PCCW’s advertising spend was 59 percent more that that of 2006 (HK$306MM). Olay and Hong Thai Travel also increased their spending by a respective 30 and 27 percent and took the 8th and 10th spots. (Table 3)

“All in all, we are cautiously optimistic about the outlook of the advertising market in 2008,” Ms Pemberton said. “Media owners will need to be more innovative in their offering in order to sustain growth in the year to come.”

‘² General Retail’ includes all retail stores except for fashion, household products, leisure and entertainment stores.

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.

Table 1: Media Share of 2007 Advertising spending