HONG KONG (AdAgeChina.com) -- China's media industry has shown a remarkable resiliency to the global recession -- except in Hong Kong.
The Chinese territory's wealth has been built on real estate, financial services and, more recently, luxury goods, all areas hit hard worldwide over the past year.
"Marketers are more cautious, said Celia Fan, director of media for Nielsen Co. in Hong Kong. All above-the-line media "would be affected by this drop."
With a population of just seven million, Hong Kong has a surprisingly cluttered and complex media market.
The territory has four free TV stations run by two broadcasters, TVB and ATV, over 40 cable and satellite channels on Hong Kong's Cable TV and the Now Broadband TV platform, and 13 radio stations run by three broadcasters.
TV remains the primary medium for Hong Kongers (97% watched TV yesterday) with an average daily viewing time of 4.6 hours, according to Nielsen.
Hong Kong publishers distribute 14 major newspapers and over 140 magazines. The top five daily newspapers read in Hong Kong are Oriental Daily News with readership of 1.762 million; Apple Daily (1.633 million); Headline Daily (1.093 million); Am730 (623,000); and Metro Daily (616,000). Hong Kong is littered with outdoor advertising, one of the rare local media that is still thriving, including bus panel ads and bus stop posters.
Broadcasters are becoming more flexible
Television spending, however, has been hit hard in Hong Kong, where advertisers and media agencies buy airtime through a bidding system that takes place almost daily. When demand is low, airtime sells at lower rates.
"Competition is less intense right now, we can get preferred spots more easily and more cheaply and negotiation is not as strong on their part," said Melanie Lo, general manager of Mindshare in Hong Kong. "The impact of the recession is on all stations, not just the two terrestrials, TVB and ATV, but also pay-TV and cable channels. Rate card discounts are common."
Broadcasters are also becoming more flexible, Ms. Lo said. Hong Kong broadcasters "are moving off just spot buys and capturing opportunities in other areas like product placement, content, production, infotainment and onsite events in shopping malls that marketers can tie brands into."
There are "more negotiations going on, more value-added services and more bundling deals going on," said Ms. Fan.
Hong Kong's newspaper market has also become more competitive due to falling ad rates and free newspapers in Hong Kong, where people read an average of two newspapers per day. The number of people who read only free newspapers has been growing, from 5% in 2006 to 8% lst year, but the percentage of people reading both paid and free newspapers also jumped from 14% in 2006 to 21% in 2008.
Online spending holding steady
There is one bright spot in Hong Kong's media market. While the first quarter of 2009 saw a decline in ad spending in traditional media, internet advertising held steady at HK$172 million ($22.2 million), about the same as last year.
Financial services marketers like Citicorp and HSBC dominate online spending, accounting for one-fifth of online advertising budgets in Hong Kong, followed by education (14%) and computers and electronics (12%). Online spending by fashion-related advertisers grew 163% in the first quarter of this year.
More than 1,000 companies in Hong Kong advertised online in the first quarter of 2009. The number of ad campaigns totaled to 3,283, up from 2,896 in the first quarter of 2008.
"Despite a slow down in the economy, it is good to see online advertising holding its ground with continued investment by advertisers. The internet is becoming a more competitive platform for advertisers to reach their target audience in a cost-effective way," said Joseph Kam, commercial director for Nielsen Online in Hong Kong and Taiwan.
Close to two-thirds of Hong Kong's population has an internet connection (63%), spending an average of 2.5 hours online daily, according to Nielsen, an increase of 10% compared to last year. Reading newspapers and magazines online has also became more common, with 45% of Hong Kong's internet users regularly reading newspapers or magazines online, an increase from 38% in 2006.
The popularity of the internet in Hong Kong has prompted both TV and print media owners to take their content online.
TVB launched MyTV, mytv.tvb.com, in November 2008 and has attracted over 1.5 million viewers so far. Users can view programs on 11 MyTV channels using either a computer or mobile phone.
Next Media broadcastd free one-minute news videos on its Apple Daily web site.
"TVB has started to do more on their dot.com site with prime-time programming, to extend the scope of their business and capture more opportunities. But the first quarter was tough for all media," said Ms. Lo.
"Overall clients are spending less and driving harder bargains, and they're not planning ahead, because they're not sure what will happen to the economy. [But I think] we've seen the worst of it."
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