Are HK clients spending less on CNY branding campaigns this year?

Chinese New Year is just around the corner and this year, the advertising industry in Hong Kong seems to see a dip in ad spending on CNY branding campaigns. In fact, editorially, our newsroom has received fewer CNY campaign pitches than last year.

On the other hand, some industry players we spoke to also observed a decline or a “business as usual” trend among client ad spending behaviour this Lunar New Year.

Despite Hong Kong’s ad spending seeing a YOY increase of 5.4% last year, the YOY increase of ad spending slowed down to 5.5% in the second quarter with the change in spending style of Mainland travellers and increased demand for overseas travel among Hong Kong people post-pandemic.

It is foreseeable that this spending behaviour is likely to continue in the coming year and a question remains - will this impact the ad spending from Hong Kong clients? This time, MARKETING-INTERACTIVE spoke to some agency leaders to explore the client spending patterns on CNY campaigns this year.

Rudi Leung, founder and director, Hungry Digital

It has been a noticeable trend since the late 2010s that advertisers in Hong Kong have been reducing their spending on Chinese New Year (CNY) brand marketing campaigns. This year is no exception, as most campaigns we have seen focus primarily on promotions. Unlike the 90s and 00s, Hong Kong brands no longer produce big productions or goodwill campaigns for CNY. Meanwhile, I still see brand advertising holding significant value for Chinese communities in markets like China and Malaysia.

There are various reasons why brand marketing is not as popular as it used to be. Firstly, brand marketing requires a long-term investment and confidence in the future, which most advertisers nowadays don't have. They tend to focus on immediate returns instead.

Secondly, changes in media consumption and behaviour have caused the media landscape to become increasingly fragmented and scattered. As a result, advertisers may allocate their budgets to other marketing tools such as relatively smaller-scale social media content, AR activations, or loyalty programs, instead of advertising.

Peggy Hon, general manager, Landor Hong Kong

We had key clients across Travel, consumer brands and luxury retail, and they are both leading brands in Hong Kong and Asia. When it comes to CNY this year, these industry market leaders are saying ‘business as usual’. That means they have either spent the same on campaigns/ media during CNY, or even more, with different reasons behind it.

It depends on your industry or brands. But for travel, the sector is mainly driven by market demand and seasonality. CNY is just one of the marketing windows and typically with travel products it requires a long lead which means they need to start generating demands way before any windows so CNY this year is actually business as usual. Overall they don’t see a huge drop in demands but maybe even more due to the growing appetite to travel post-pandemic.

On luxury retail, our clients in alcohol and jewelry retail sectors shared that CNY remains to be their key big consumption period so marketing budget is same or even more given this is still a key windows to win against competition. In Hong Kong, despite the negative sentiment around lesser inbound more outbound travellers during CNY, they actually see more people staying in Hong Kong during the pre-CNY period and more people coming to their stores/ events. 

Jan Lee, general manager, TBWA\ Hong Kong

We do see that clients are spending less on brand campaigns this CNY. In fact, it's not just this CNY; we have received fewer CNY-related brand campaign briefs compared to the past. It's not that they spend less on media, but we have observed a decline in the number of CNY-focused brand campaigns in general.

I believe multiple reasons are contributing to this situation. One significant factor is the increase in outbound travel, especially this year after COVID. With fewer people in town, advertisers are shifting their budgets and promoting their campaigns during other times of the year to maximise their investments. Additionally, while CNY remains significant in China, the festive vibe has been less strong in Hong Kong in recent years, which has also had an accumulative effect on the situation this year. 

For this year specifically, we have identified another reason related to the business forecast. A client approached us to work on a campaign originally scheduled to launch in February 2024, but they eventually decided to postpone it after finalising their business plan for 2024. They reduced their marketing budget based on the projected soft business momentum this year, choosing to invest primarily during peak business seasons rather than during CNY. 

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