Advertisers expect lower advertising budgets but are optimistic about Hong Kong’s economy this year, according to a survey co-conducted by Nielsen and the Hong Kong Advertising Association.
Nearly half (44%) of advertisers expect advertising budgets to shrink in 2021, with the biggest challenge being a lack of funding (28%). To ensure better ROI, advertisers responded that using metrics and analytics was very important. 74% of advertisers said measuring media effectiveness can help them make better marketing decisions.
In particular, analytics on reach and frequency (68%), ad performance (64%) and viewability (60%) were identified as the top three KPIs for measuring advertising effectiveness. Meanwhile, the overall advertising budget is expected to decrease by 6% this year, mainly due to a planned budget reduction of 15% for offline advertising and a budget increase of 4% for online advertising.
The survey also expects that, as the pandemic has shown signs of stability following the Chinese New Year and the availability of the nationwide vaccination program, the actual decline in advertising budget could be even more moderate. .
“Although the world is beginning to reopen more permanently, it is clear that the pandemic will have a lasting impact on consumer behavior and brand-to-consumer engagement,” said Macy Ng, Chairman of the Hong Kong. Advertisers Association.
“We have seen how the new normal has resulted in a greater focus on digital business, so this is likely to be a year of pronounced digital innovation and greater tech-driven empowerment for help marketers develop effective strategies and improve the digital customer journey,” she added.
The projected advertising budget for 2021 is 64% online versus 36% offline. The online advertising budget is dominated by paid social and social networks, display advertising and video advertising, capturing 16.6%, 9.8% and 9.4% of total budgeted spend, respectively. For offline advertising, TV, print and static outdoor will be allocated the largest advertising budget, accounting for 9.6%, 6.2% and 5.7% of 2021 budgeted spend. .
Media selection should be driven more by the pandemic and the new normal. Paid social networks, which have become part of the daily lives of most consumers more engaged in the digital world, are expected to grow by 16.6%. Scheduling flexibility and social media affordability are key pull factors in today’s tight budgets.
Television (9.6%) remains the first choice of offline media for advertisers. The stay-at-home policy has led to a significant increase in television consumption in 2020. Additionally, with 70% of advertisers planning to launch brand building and awareness campaigns to maintain their brands’ priority positioning and the trust they place in consumers, forecasts TV usage remains as it is a strong media choice to quickly reach mass audiences for awareness.
Additionally, 73% of advertisers believed the rebound would occur in 2021 at varying levels across industries. The initial recovery could be stronger and happen much sooner than expected, as the Consumer Confidence Index conducted by The Conference Board in collaboration with Nielsen saw a recovery trend approaching pre-crisis levels at 93 in Q4 2020, compared to 75 (Q2 2020) and 83 (Q4 2019).
“It’s not a must to build your digital platforms. These days, there are options to deploy digitization, including e-commerce, by partnering with technology vendors or fulfillment vendors to expand your online footprint. As a result, while saving on technology infrastructure and fulfillment logistics investment, you can also take advantage of the huge pool of consumers available from well-established platforms,” commented Clare Lui, Vice -President of Nielsen Media Hong Kong.
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