Advertising budget cut expected amidst varying recovery in industries
Around 44% expect the decrease amidst likelihood of budget cuts in numerous sectors.
Advertisers expect a decrease in advertising budget for 2021 amidst numerous business sectors indicating likelihood of budget cuts, according to the latest survey by Nielsen and the Hong Kong Advertisers Association.
Nearly half (44%) of the respondents share this sentiment, with 28% saying that the biggest challenge is a lack of funding.
Overall advertising budget is set to be reduced by 6% in 2021 mainly due to an anticipated 15% budget cut for offline advertising and a 4% budget increase in online advertising. The decline in advertising budget may be milder amidst signs of stabilisation post-Chinese New Year and availability of a territory-wide vaccination scheme.
The budget cut comes as advertisers (73%) believe that rebound across industries would happen in 2021 at varying levels, with the initial recovery stronger and sooner than expected as the Consumer Confidence Index (CCI) has seen a reviving trend approaching pre-crisis levels at 93 during Q4 2020.
The research also found that using measurement and analytics is considered important to ensure return on investment. The 74% of the respondents believe that media effectiveness measurement can help with better marketing decisions.
In particular, analyses about reach and frequency (68%), ad performance (64%), and viewability (60%) have been identified as the top three key performance indicators for effectiveness measurement.
Meanwhile, the survey noted that digital adoption during the pandemic has brought the shift to online advertising, with the advertising budget for 2021 split 64% online and 36% offline.
Online advertising is led by paid social and social networks (16.6%), display advertising (9.8%), and video advertising (9.4%). Whilst for offline advertising, TV (9.6%), print (6.2%), and outdoor-static (5.7%) will get the most allocation.
Nielsen Media Hong Kong vice president Clare Lui understands the possible challenges for traditional businesses to go digital as this is amongst the most common issues they face.
“It’s not an absolute must to build your digital platforms. Nowadays there are options to deploy digitalization, including e-commerce, through partnering with technology vendors or fulfillment suppliers to extend your online footprint,” Lui said.