Emily Tan
Aug 23, 2012

Regional media buyers dispute Warc’s report on APAC's 'plunging' marketing budgets

ASIA-PACIFIC – Although Warc’s latest global marketing index (GMI) shows that marketing budgets in the region have dropped ‘significantly’ in August, media specialists in the region have noticed no change in client ad spend.

Regional media buyers dispute Warc’s report on APAC's 'plunging' marketing budgets

Warc reported that marketers have ‘declining confidence’ in the Asia-Pacific region, where budgets have ‘generally decreased’, giving the region an index score of 46.0, down from 50.8 last month. (In the Warc report, a reading of 50 is neutral.) 

This pulled down the headline GMI measure—which combines readings for trading conditions and staffing levels alongside marketing budgets—for Asia-Pacific down to 52.6 from 53 last month. 

Commenting on the August 2012 GMI results, Suzy Young, data editor at Warc, said: "In the months ahead, it will be interesting to see if the sudden dip for Asia Pacific is representative of a more deep-rooted downturn."

Malcolm Hanlon, COO for Asia-Pacific at Zenith Optimedia told Campaign Asia-Pacific that the media agency has not seen evidence of a ‘big downturn’ in August. “Everyone’s cautious, and there’s a little bit of feeling that China’s factory output may be slowing down, but consumers are still upbeat,” he said. “As long as consumers are still spending, marketing budgets aren’t affected that much.”

Hanlon added that he had just been in Hong Kong and the mood on the ground was as busy as he’s “ever seen”. He added that the report by Warc seemed rather negative. According to Admango, Hong Kong’s ad spend for the first half of 2012 alone was US$2.4 billion, a year-on-year increase of 13 per cent.

In July, Zenith Optimedia released its 2012 ad spend growth forecast, which downgraded Asia-Pacific slightly from 7.4 per cent this year to a still robust 6.7 per cent. According to the forecast, Japan is expected to report growth of 3 per cent this year, China growth of 14.5 per cent and India growth of 6.8 per cent.

Bharad Ramesh, Starcom Mediavest Group’s regional executive director, strategic operations and trading, Asia, told Campaign Asia-Pacific he has not noticed a slowdown for the Southeast Asian region. “I think India, China and Australia will hold the key given the size of spends in these markets,” he commented.

eMarketer sees no sign of slowing down for China’s ad spend. In its 1 August forecast, it predicts that China will grow by nearly 20 per cent to US$46.34 billion and expects the market to overtake Japan as Asia-Pacific’s largest next year. The report also expects growth of 3.2 per cent for Australia.

“As for the report itself, Asia-Pacific’s GMI is still tracking about 50, so there’s still growth,” added Ramesh.

Warc itself said in its GMI report for July that the budgets for Asia-Pacific were improving and that the outlook is positive. 

“The region has a lot of momentum and that doesn’t stop in one month,” said Hanlon.

Source:
Campaign Asia

Related Articles

Just Published

2 days ago

'Looking for the first domino': Titanium jury ...

In a wide-ranging interview, John explains how APAC work, like New Zealand’s stigma-smashing Grand Prix for Good and Ogilvy Singapore’s work for Vaseline, are setting the stage for global creative change.

2 days ago

John Wren on his vision for a bigger, better Omnicom

The chief executive tells Campaign why the IPG acquisition makes sense, what the impact will be and what will determine success.

2 days ago

Big ideas, not big algorithms, will win Cannes

At Cannes 2025, Adobe’s Shantanu Narayen and Publicis’ Arthur Sadoun unpacked why AI may power creativity—but humans still pilot it.

2 days ago

Campaign Cannes Global Podcast Episode 2

Our editors from the UK, US, Canada and APAC report from Campaign House at Cannes Lions 2025.