ASIA-PACIFIC AD SPEND SHOWS SIGNS OF SLOWING

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HONG KONG -- The Asia-Pacific advertising market broke the $29 billion mark following strong growth in 2000, with 11 countries reporting double-digit increases and nine showing faster growth than in 1999, according to ACNielsen Media International.

But market research firm VNU, which measures ad spend in 12 Asia-Pacific markets -- South Korea, China, Hong Kong, Singapore, Malaysia, Indonesia, the Philippines, Thailand, Vietnam, India, Australia and New Zealand -- warns that several markets are showing early signs of slowdown.

"The year has been a good one, but outlook for 2001 is less certain as a result of the dot-com bubble bursting and the U.S. economy softening," said ACNielsen's Frank Martell, president, Asia-Pacific, based in Hong Kong.

China remained the largest- and fastest-growing ad market -- worth almost $10 billion in 2000 with 36% real growth -- in part due to the strong performance of local advertisers, whose heavy investments in advertising indicated the growing sophistication of local manufacturers. All top 10 spending products advertised in mainland China are local brands, and together they account for 7% of total advertising in that market.

In Southeast Asia, the Indonesian market defied a year of political unrest by growing 44% and looks set to join the $1 billion club should the momentum be maintained. In the Pacific, Australia rode on the back of the Sydney Olympics and a government-sponsored tax reform campaign to reap 15% growth, but a number of factors may hamper the 2001 outlook, including the recent release of weak retail trading figures, declining employment advertising volumes and a depressed currency. In addition, 2001 is a federal election year and advertisers tend to spend less before and after elections.

Looking forward, initial findings from nine Asian markets shows that growth during January and February was slower than that in 2000, with South Korea experiencing an 8% contraction. In Thailand, advertisers spent dramatically less, with the top five advertisers spending just half that in the same period last year.

"It is obviously too early to say what 2001 will look like, but advertising expenditure measurements are flagging some early alerts. Growth slowed across Asia in January and February, despite advertising rate increases in some markets. Also, the negative growth in South Korea is of particular significance in the prevailing economic climate," said Mr. Martell. -- Normandy Madden

Copyright April 2001, Crain Communications Inc.

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