Overview of the Advertising Industry in Hong Kong

‘Under the current unstable economic situation, advertisers should utilise the integration of the advanced technology, to build a winning advertising and sales strategy.’ said the past chairman of the Hong Kong Advertising Association, Mr David Yueng

As all of us are under the influence of the COVID-19 pandemic, there is still a demand in the advertising industry in Hong Kong and we can actually create our own silver lining to be successful throughout this difficult situation.

Even though there seems to be a decrease in the traditional advertising market, however surprisingly, there is an increase of 0.8% in the digital market. While different kinds of brand products are still dominating the advertising market, it is predicted that there will be a fast growth in the pharmaceuticals and healthcare, telecom and technology, and food packaging industry in the future. The luxurious brands, entertaining and retails industries are also slowly increasing.

Traditional Advertising in Hong Kong

Advertising Industry in Hong Kong - Mong Kok Street

The power of advertising is that it tells consumers they need the products and create the demand from zero. According to a commentator, we could see that the element of HK advertising is fluid in nature, which is very diverse and people in Hong Kong care about some local cultures and words which can provide a strong sense of belonging to them. Even though the pandemic is surging, it does not mean that the traditional advertising market is halted. A famous AI company for competitive advertising tracking has something to say! Their recent 2020 report showed that a few business types have a significant increase in their traditional advertisement expenses, this included the hotel industry as Staycation becomes the heat of the town, beauty-related service and products, fast-food company and related service, banking/loans/ investment/insurance/credit card financial service etc.

In fact, the advertising industry is a reference to the consumer living behaviour, insight of the current economic situation, there are still industries that consumers are willing to spend their money on like service industry etc.

A marketing agency revealed that even though they are now focusing on their digital and social media advertising business, they still receive clients that ask for traditional, press or outdoor advertising campaigns.

Prices of traditional advertisement also reduced due to the pandemic. Hence, more clients is asking to promote their business in the traditional advertising market. As for digital and social media advertising, their advertising investment is continually increasing with the surging e-commerce activities. Here are  different types of traditional advertising distributing in Hong Kong:

OOH

Talking about the Hong Kong OOH advertising market, there are three main types: airports, railways and buses, occupying a large part of the OOH industry. Want to know why it is so popular? Because

  • Hong Kong has a high population density 
  • The expenses of OOH is relatively low compared to other types 
  • The promotion period is long as it is an outdoor display

Incorporating OOH and DOOH with Creativity and Dynamics

How can we make OOH and DOOH more diverse and innovative? With the rise of the digital era, different kinds of OOH and DOOH are made with brand personality. One successful case is by Jill Stuart Fragrance Spread OOH. Not only did the OOH make itself into a dynamic snowy visual elegance. To create an interactive element with their audience, they input brand personality into the advertisement by promoting perfume testing using a bus station OOH. This is such an interesting and smart way for your OOH.

Jill Stuart digital Bus Shelter advertising

Jill Stuart User Experience

Another common trend in Hong Kong is augmented reality in OOH advertising. It helps promote an instant user experience with the OOH Billboard. The pedestrians' movement and the real-time view are created to capture the audience's instant attention to the advertisement.

Digital Advertising in Hong Kong

Hk Advertising - Social Media

‘The facts have proved that technology is a prominent aid in helping us to make precise and ad-hoc decisions. Among all technologies, artificial intelligence (AI) has its detrimental functions. To those advertisers who know how to optimise the use of technology, a challenging economic environment can actually help better distinguish the excellent advertising activities from the poor ones. Whether advertisers can wisely and carefully distribute their advertising portfolio, and turn the potential risk into opportunities, this is the utmost importance to continue their business sustainability.’ Vice President of Nilsen, Ms Clare Lui suggested

Even though the pandemic is still on-going, digital advertising thrives on its own. With the increasing needs for e-commerce and the escalating popularity of using social media, the market share of digital advertising outweighs traditional advertising, compared to 2019 where the ratio of distribution is 5:5.

However, advertisers also place more focus on the return on investment. The 2020 Survey showed that advertisers tend to spend more on evaluating advertising efficiency. 

Return on Investment Chart

According to the Nielson 2020 forecast in online advertising sections, the top four digital advertising are:

Distribution on Ad formats

 Hong Kong Digital Marketing Current Trend

Now let's talk about a few trends of the digital advertising industry in Hong Kong:

  • Social media 

Retail companies used to rely on their browsing statistics to track their online platform. However, with social media, people now can use the business post or the real-time story functions to promote their products. Customers do not need to step aside from the application, and they can directly buy a product inside the post. With newly launched ‘ Instagram Checkout’ functions, it helps to improve the advertising performance. At least 54% of the users will decide their shopping behaviour according to these social media posts.

The most dominating social media in 2018 Hong Kong are:

  • Direct Message & Polished and Interactive Emails

Social media eliminates the hindrance of COVID-19, people do not need to have face to face communication, they can still have customer service. Promote brand products and relationship building is also made possible because of this.

Email advertising is still one of the practical methods in this fast-changing society. Till February 2019, email advertising still has a 3,200% return on investment.

  • Sentiment Analysis

It analyzes the reactions of clients toward a product or service. They collect large amounts of data and calculate client awareness, then decide the most suitable strategy to promote.

  • Increasing Preference toward Video Advertising 

With the emergence of YouTube, Instagram stories and Snapchat etc., people do not like words anymore, instead short video clips are more interesting and that is why there are so many video bloggers now. This creates a sense of direct communication and brand image can be more personalised too!

  • Emerging of Native Advertising 

Native advertising is continuing to explore like a boom in the market. Brands spend billions of dollars on this and create the most exotic AR ad (Augmented reality). Even though there is a decrease in AR marketing, it successfully improve the native ad experience for consumers. Vendors and publishers become better to create innovative features and content, like the smoother user interface or smartphone camera improvement. Using native AR ads can even help consumers to see home decor options inside their existing home. Isn’t this the definition of digital?

Future Development of Hong Kong Advertising Market

Future Digital Advertising

The Z generation (people born between 1995 to 2010, they are the 20 to 30 years old generation) is expected to take over the future consumer market. So, companies will have to change their way of marketing strategy. It is stated in a government report 2018, more than 92% of the household has broadband communication service and the penetration rate of mobile phones is even reaching 248%. This is why the generation tends to choose online content now! They are used to communicating and receiving information online. Besides, A high in-home use of mobile phones and computers, accounting for 38% of the Z generation respondents, further confirms that the digital world will dominate the future age. However, digital is not enough, you have to mix traditional advertising into digital and be as creative as you can to capture the heart of our audience.

Even though digital advertising shows great potential in the market, as a smart advertiser, you will not only be leaning on one single side, be it digital or traditional advertisement. Therefore, no matter if the economy is prosperous or in a downturn, you will consistently diversely distribute your advertising portfolio, so the broad coverage will help you to secure your advertising performance and win in the market.

  

References retrieved from:

https://hk.prnasia.com/story/275604-2.shtml (PR Newswire)

www.hk2a.com (HK Advertisers Association)

 https://www.nielsen.com/hk/en/insights/article/2020/differentiate-through-technology-adoption-amid-the-challenging-advertising-market-in-hong-kong-in-2020/https://www.verizonmedia.com/hk/insights/ivan-markman-2020-predictions (Verizon Media)

https://rudileung.medium.com/2020年q4-疫市中的香港廣告業-ac425deba51ehttp://hkdm2018.hkbu.edu.hk/full_report_final.pdf (Hong Kong Digital Media Report 2018)

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