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Hong Kong’s Advertising Industry: Digital Evolution

The increasing popularity of digital and online advertising is fast reshaping an industry renowned for both creativity and its ability to adapt.

Information and communication technology (ICT) and new media are reshaping the advertising industry and altering the ways in which marketing messages are delivered to target customers. One of the regional advertising strongholds, Hong Kong is witnessing rapid changes in the sector. Both marketers and advertisers [1] are placing greater focus on digital/online advertising, capitalising on increased internet penetration and higher levels of mobile browsing.

Digital Advertising: A Global Trend

According to data compiled by eMarketer, global digital advertising revenue has grown by more than 16% annually, rising from US$32 billion in 2011 to US$51 billion in 2014. The annual growth of other platforms has registered comparatively poor growth (less than 1%), edging up marginally from US$126 billion in 2011 to US$129 billion in 2014. The share of digital advertising as a proportion of total advertising revenue has grown from 20.25% in 2011 to 27.12% in 2014. The global outlook for online advertising remains distinctly positive. Zenith Optimedia, a global media services network, forecasts an annual growth of 14% from 2014 to 2017, outpacing a number of traditional mediums, such as television and print.

Undoubtedly, the rapid growth of online advertising has been largely driven by increased internet penetration. Currently, it is estimated that more than three billion people worldwide access the internet, three time the one billion users in 2005. Hong Kong ranks among the highest-internet using economies in Asia. About 75.5% of Hong Kong people were internet users in 2014, compared to about 88% in Japan and 74% in Singapore, according to data compiled by Euromonitor. The internet penetration rate in Hong Kong is expected to continue to grow steadily up until 2020, offering an ever-expanding market for online advertising.

A big advantage of online advertising over traditional mediums is that digital platforms have the technological facility to allow a far higher level of interaction with target customers. In devising their advertising or marketing campaigns, marketers aim for strategies that will garner the attention of as many people as possible. They aim for the maximum number of “eyeballs”, with the hope of raising impression rates and turning prospects into consumers. Technological advances also allow advertisers to buy the most effective media space on online platforms and directly reach their target customers. Marketers and advertisers can now cherry-pick those cyberspace slots likely to yield the highest number of eyeballs for their campaigns. Among other online options, these slots include websites, landing pages, email newsletters, banners and/or video advertisements.

This plethora of online advertising options and the increased effectiveness of marketing campaigns have led to an increased willingness by advertisers to allocate more resources to digital marketing campaigns. Television currently remains the global leader in terms of advertising spend. Its share of total advertising spending (adspend) is expected (by Zenith Optimedia) to keep trending downward – decreasing from about 40% in 2014 to 37% in 2017. Meanwhile, online video is expected to account for an increasing portion of advertisers’ budgets, almost doubling from a global adspend share of 2.1% in 2014 to 3.9% in 2017.


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