How HK brands can maximise ROI with limited budget in 2025

Hong Kong ad spending reached HK$7.68 billion in Q3 2024, representing a 2.6% YOY increase, according to admanGo. Driven by strong growth in ad spend from industries such as F&B, travel and tourism services, local ad spend increased by 7.5% YOY in July and grew 5.6% YOY in August.  

In the third quarter of 2024, among the top 10 industries with the highest ad spend, travel and tourism services, restaurants and beverages all recorded double-digital growth. Travel and tourism services achieved a remarkable 33% YOY increase in ad spend, the highest among the top 10 industries.  

Meanwhile, ad spending for restaurants increased by 21% YOY, moving up from fifth place last year to fourth this year. Among the Top 10 advertiser groups, foodpanda saw a significant ad spend increase of 120% YOY, making it the highest-growing advertiser group. The beverages industry also demonstrated strong performance, rising from 11th place last year to eighth this year, with a 20% YOY growth in ad spend. 

Combined with the Christmas season in December, a traditional peak for consumer spending, advertisers are expected to allocate more resources to promote business growth, leading to continued expansion of local ad spend. 

Industry players MARKETING-INTERACTIVE spoke to also observed a similar trend. Derek Yip, chief operating officer, OMG Hong Kong, said the agency has noted an impressive 15-20% increase in media budgets across the travel and tourism sector.  

“Airlines and travel agencies are launching promotional campaigns to entice Hong Kong residents to travel abroad, particularly to Asian destinations where favourable currency rates enhance the appeal to travel. This trend is reflected in the 1.8 million trips taken from the city during the recent Golden Week holiday,” Yip added. 

Similarly, the F&B sector has shown an upward trend, with media budgets having risen by an average of 12-15%, said Yip. “The trend is shifting from luxury spending to a focus on 'in-depth travel experiences,' leading consumers to allocate more of their budgets to essential goods, including food and beverage.” 

F&B and travel sectors saw impressive growth in ad spending

Adding to his view was David Chan, head of trading and partnership, Dentsu Hong Kong, who said the F&B sector remains challenging as businesses are investing in advertising to attract customers to dine in and order from restaurants. “We’ve noticed increased spending by Quick Service Restaurants on TV, focusing on tactical offers and ‘daily’ deals. Additionally, there’s a rise in digital marketing efforts featuring coupons and special offers.”  

While across the travel industry, the agency observed that outbound travel from Hong Kong surpasses the number of inbound tourists. “Consequently, there has been an increase in advertising campaigns in Q2 2024 promoting outbound travel. The Hong Kong Tourism Board is actively promoting the city to attract more visitors, while the Macau Tourism Board is boosting its efforts to draw tourists during the summer holidays,” he added. 

Caterina Camerata, strategy and insights lead, Publicis Media Hong Kong, said key hotel players are experiencing a favourable return on their advertising and marketing investments, with increased occupancy rates and a 19% rise in average daily rates (ADR) in the first half of 2024. 

Airline advertisers are also seeing substantial growth, driven by a surge in outbound tourism. In July 2024, Hong Kong International Airport reported a 24.7% year-on-year increase, signalling a strong recovery in travel demand, particularly to and from Southeast Asia, Mainland China, and Japan, she added.

While improved business performance is spurring increased ad spend in the tourism and travel sectors, many advertisers are redirecting their budgets toward social and performance media, she said. "These channels are less likely to be captured by official ad spend monitoring systems, indicating a strategic shift in advertising focus."

Banking services sector ad spending expected to be flat

On the other hand, the ad spending for banking and investment services sector saw a 5% YOY decline in Q3 2024, according to admanGo's report. The emergence of fintech firms has greatly heightened competition, prompting traditional banks to reassess their marketing and advertising tactics, according to Paige Low, digital director, Assembly. "These elements combine to necessitate a more prudent approach to advertising as businesses adapt to the swiftly changing market dynamics."

Ad spending across the cosmetics and skincare industry also saw a 8% YOY drop in Q3 2024, according to the report. Low said this might be due to the change in consumer behaviours, citing their tendency to be more mindful of their spending habits amid a less optimistic macro-economic outlook.

"In response, brands are more strategic with their budget, focusing on several key moments during the year and adopted an integrated campaign approach during these moments to deliver an impactful and engaging experience for consumers," she said.

Moving forward, dentsu's Chan said the overall ad spending in the banking services sector is expected to be flat or show a slight increase compared to 2023. “Due to changing travel patterns, many banks and insurance companies are launching their campaigns in Q4, probably anticipating that Hong Kong residents will be less active during Q3 due to summer travel," he added.

Maximising ROI with a limited budget 

With more consumers willing to spend on experiences rather than physical goods, the work of an advertiser will become harder in the coming years, according to Johnny Ng, head of growth, GroupM Hong Kong.  

According to a poll from Barclays, a quarter of consumers (25%) say they plan to spend more on experiences and events this year than last year, with this trend even more prevalent among younger consumers aged 18-34 (32%). 

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Another report by Canvas8 also found that Gen Zs are exhausted from being chronically online and are turning to tangible products and experiences to feel more grounded.  

“Marketing and media play an outsize role now in establishing a brand and a brand’s positioning and what it stands for, in this age of more intentional spending with purpose,” he added. 

He added that investing in media when advertisers are spending less is also a sound strategy with regard to excess SOV, maximising outcomes with less competition. “Long-term brand-building is also how we at GroupM advise our clients to protect their future businesses.” 

Moving forward, Chan said ad spending is expected to maintain or increase in sectors such as banking and insurance, travel, and F&B. Additionally, more Chinese brands expanding internationally are likely to start in Hong Kong, leading to increased advertising to build brand awareness, particularly in eCommerce and electric vehicles.  

“Tourist attractions from Southern China, such as restaurants, optical shops, and dental services, may also boost their ad spending to target travellers from Hong Kong,” he added. 

To maximise the returns on investment (ROI) with limited budget, brands should focus on selecting the right media partners and negotiating favourable deals, such as TV commitments with broadcasters, Chan said. “Utilising data for precise digital targeting is also key. Striking the right balance between branding and performance is crucial for success.” 

Publicis' Camerata also expected sustained growth in ad spending for the travel and hospitality sectors, extending into 2025, driven by both inbound and outbound travellers. "Additionally, there is a significant push for mega-events related to arts, culture, and music, which is projected to boost advertising in the events, entertainment, and tourism industries."

Beyond the travel and hospitality sectors, OMG's Yip also anticipated an increase in ad spending on influencer marketing, IP collaborations, and experiential events in the coming year. He added that leveraging data is crucial to maximising ROI.  

“By collecting consented data, advertisers can gain insights into customer preferences, enabling personalised marketing that enhances customer experience and boosts engagement and conversion rates,” he said. 

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