Are industry players optimistic about the growth of HK ad spending in 2024?

Hong Kong’s ad spending in general for January and February has dropped slightly from last year to reach HK$4.4bn, representing a 5% YOY decrease, according to Admango’s latest ad spending report.

Various favourable factors led to a significant increase in ad spending in Jan-Feb 2023, which made the 5% drop in Jan-Feb 2024 inevitable due to the local economy's recovery being hampered, the report said.

In early 2023, as preventive measures against the outbreak gradually eased and the implementation of quarantine-free travel between Hong Kong and mainland China resumed, local economic activities regained momentum.  

Entering 2024, with the government’s efforts to promote mega-events and the mainland's further expansion of cities eligible for individual travel, it is anticipated that these measures will present more opportunities across various industries, thereby favouring advertisers in conducting more promotional activities.  

On the agency front, industry players MARKETING-INTERACTIVE spoke to explain the possible reasons behind the decline in ad spending and how they predict the future growth of ad spending in Hong Kong.

The economy right now is uncertain with the sluggish stock and property markets and the retail sector is less attractive to MCV due to a less favourable exchange rate vs CNY, according to David Chan, head of trading and partnership, dentsu International.   

We do see some stronger momentum from March 2024 onwards but clients in general are very conservative in their spending and thus I would expect 2024 to be a challenging year in terms of media spending and it will be very lucky if the overall spending is on par with 2023. 

Nonetheless, with the government’s efforts to promote mega-events and the mainland's further expansion of cities eligible for individual travel, it is anticipated that these measures will present more opportunities across various industries, thereby favouring advertisers in conducting more promotional activities.  

Irene Tsui, managing director, Mindshare Hong Kong said she is always optimistic as there will always be cycles and sometimes unexpected things.  

“But advertisers, agencies and the platforms/media will always come up with creative ways around it. When there is the will to thrive, there is a way. The key is to remain agile and be always ready to adapt to the changing landscape to stay competitive.”  

Despite the sluggish economy and increase in cross-border competition, Ken Cheung, co-founder and digital director, KREW Digital said he anticipates a potential resumption of ad spending in the summer, as Q1 and Q2 will likely be a testing phase for advertisers.  

“They will need data from the first half of the year to assess budget allocation. It is possible that advertisers will allocate more funds for advertising during the summer and Christmas seasons, saving money for those periods,” he added. 

Meanwhile, Vin Ng, director at Spread-it, said it is reasonable to anticipate a more conservative approach to ad spend in Hong Kong, considering the changing spending habits of its people in 2024.

As consumer behavior evolves, brands are likely to adapt their strategies to effectively reach their target audiences. This could lead to a shift in how ad spend is allocated, with brands exploring different avenues to maximise the impact of their advertising budgets.

HK's social media and OOH ad spending sees continuous surge

Admango's report also found that Hong Kong’s social media has experienced a notable 15% YOY surge in ad spend during January and February this year, marking the most significant increase among all media platforms. 

In particular, spending on Instagram and Facebook exhibited respective YOY escalations of 29% and 9%. Within traditional media outlets, radio and outdoor witnessed robust YOY growth rates of 20% and 14% respectively.  

In fact, Hong Kong’s ad spending on social media has seen steady growth over the past few years. Back in 2023, it recorded a significant YOY increase of 14%, with Instagram's ad spending recording a remarkable 39% YOY growth. Meanwhile, outdoor experienced a notable 11% YOY growth, making it the best-performing traditional media.  

It is not surprising to observe brands increasing their investment in social and digital platforms year after year. These channels have gained popularity and proven to be effective in reaching their target audience, according to Florence Kong, founder and managing director, WeGlow HK.  

This is coupled with the fact that both Facebook and Instagram have seen growth in users, where they can reach 60%+ and 50%+ of Hong Kong internet user base, according to Meta’s data.  

Meanwhile, outdoor advertising continues to be a favoured choice during the festive season in January and February. When it comes to radio ad spend, it often correlates with concert or event sponsorships hosted by radio stations, she said.  

The surge in outdoor ad spending can also be due to the easing of pandemic restrictions versus last year, thus the return of outdoor activities, people resuming commuting to work daily, and of course the tourist inbound, according to Mindshare's Tsui.  

Not to mention the continual development of pDOOH that enables re-targeting and higher flexibility/creativity for advertisers and agencies. All these provided brands with more opportunities to advertise through OOH, transport media (including the cross-border media) as well as radio.  

Overall, the customers are looking for a holistic experience offline and online. The increase in spend in social media is due to their improved performance with the application of AI, said dentsu's Chan.  

The surge in ad spending for OOH advertising can be attributed to brands’ willingness to capture the audience's attention when they are going out on the street as people do go out more after the pandemic, he said.  

“We see strong demand in OOH prime positions from luxury and banking and finance clients. For radio, the increase is mainly driven up by some personal care brands, gasoline and car manufacturers which we need to further observe if they will continue to advertise on the radio for the rest of the year or more on a campaign basis,” he added.  

Join us this coming 26 June for Content360 Hong Kong, a one-day-two-streams extravaganza under the theme of "Content that captivates". Get together with our fellow marketers to learn about AI in content creation, integration of content with commerce and cross-border targeting, and find the recipe for success within the content marketing world! 

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