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GroupM: 2017 Global Advertising to reach over S$770 billion

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WPP’s GroupM, the world’s leading media investment group in terms of billings, affirmed its 2016 global ad expenditure forecast on Monday and shared its revised outlook for 2017.

It noted that there will be another year of modest growth in advertising as brands continue to be pressured for performance in low-growth environments based on the variety of economic factors across the globe.

Despite the overhang of uncertainty tied to outcomes of the U.S. Presidential election and the U.K. referendum on departing the European Union, GroupM states that advertising budgets have not yet been impacted.

“China and other ‘new world’ countries continue to over-contribute to global growth, but a new normal more modest level of growth has settled in. Digital advertising continues to be the chief beneficiary of growth.” wrote GroupM.

2017 advertising is predicted at $547 billion (S$778 billion), at an increase of 4.4 percent from 2016, with digital’s share to reach 33 percent.

In 2016, digital captured 72 cents of every new ad dollar (USD), and TV 21 cents . In 2017, digital will capture 77 cents per new dollar, TV will get 17 cents .

The U.S. and China account for half of all net growth in the 2016 and 2017, with China taking back a narrow lead over the U.S.

Media USD m, current prices
2015 2016f 2017f
NORTH AMERICA 183,049 188,675 193,655
yoy % 1.8 3.1 2.6
within which USA 173,311 178,839 183,523
yoy % 1.8 3.2 2.6
LATIN AMERICA 34,717 36,412 38,772
yoy % 7.7 4.9 6.5
WESTERN EUROPE 88,817 92,062 94,847
yoy % 2.9 3.7 3.0
CENTRAL & EASTERN EUROPE 12,472 13,456 14,521
yoy % -1.4 7.9 7.9
ASIA-PACIFIC (all) 166,793 176,422 187,492
yoy % 5.9 5.8 6.3
within which China 74,151 80,034 86,275
yoy % 7.8 7.9 7.8
MIDDLE EAST & AFRICA 16,952 17,468 18,085
yoy % 8.2 3.0 3.5
WORLD 502,799 524,495 547,371
yoy % 3.8 4.3 4.4

 

With late-year growth, GroupM China revises 2016 to +7.8 percent, up from 6.6 percent predicted earlier.

Advertising for Fast-moving consumer goods, rose 4.6% in the second quarter year-on-year, much faster than the 2.0% growth forecasted.

Continuing urbanization and solid consumer confidence lend ample support for continued growth, but China no longer boasts recent double-digit rates. Coming off of peak growth, GroupM expects digital advertising in China will grow 29.5% in 2016 and slow to 21.5% next year.

The U.S. remains the other principal growth contributor. GroupM fractionally upgrades 2016 growth from 3.1% to 3.2%. This includes revising TV from 3.4% to 4.1%, matching growth in the preceding election years (2012, 2014).

This year’s less robust election spending was compensated with Summer Olympics demand.  There was some redirection of budgets from digital to TV, particularly by the pharmaceutical and CPG categories.

For 2017, GroupM shaves growth to 2.6% on the basis of the weak global and U.S. GDP growth, and political uncertainty which as yet has not impacted budgets.

The U.K. Brexit vote has impacted financial markets, but to date has not impacted advertising. GroupM recently revised its U.K. forecast up to a digital-fueled 7% annual run-rate, delivering a prospective $3.0 billion incremental investment over the two years 2016-2017. This compares to $3.3 billion from the rest of the EU combined.

Elsewhere in the BRICS, GroupM sees that Brazil is emerging from recession , after reaping Olympics benefits.  There is increased digital adoption, particularly in mobile; since the beginning of the year mobile users grew 22% to reach 74 mm. Modest ad growth of 2% in 2017 is predicted, enough to keep Brazil the world’s number-five ad economy ( USA , China , Japan , UK, Brazil , Germany ).

India remains, by far, the fastest growing market in the world’s ten, $10B plus ad markets. Growth is forecast at 13.8% in 2016 and 12.5% in 2017, with an economy fueled by low interest rates, sustained urban demand and the impact of key reforms.

Russia’s rapid recovery since the first quarter continues, prompting revision of the 2016 forecast up to 9.5%. Higher demand for TV in Q4 and growth in paid search are key contributors. While over half of paid search demand is from smaller businesses that cannot afford other media, demand from larger advertisers is strong as well. Ten percent growth is predicted for 2017, driven by TV and Internet.

Prediction intelligence is drawn from WPP’s worldwide resources in advertising, public relations, market research and specialist communications and is published in This Year, Next Year by GroupM’s Futures Director, Adam Smith .

“Ad growth has shadowed the global economy’s long, low and level recovery cycle since 2010. These new forecasts emphasize the ad story of our times is however structural, not cyclical. Twenty years on from the internet becoming a measured ad medium, digital remains the engine of advertising growth and disruptor-in-chief of the entire marketing economy,” remarked Smith.

“This multiplies options, opportunities and risk. The importance to advertisers of autonomy and diligence has never been higher.”

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Media

ST demographic graph contradicts official data on ageing population in Singapore

A recent opinion piece in The Straits Times highlights Asia’s demographic shift, focusing on its ageing population, but includes a graph that contrasts with official data. The graph shows a youthful demographic, differing from Singapore’s official statistics, raising questions about accuracy and the absence of a correction or official clarification.

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An opinion piece published by The Straits Times on 1 October 2024, titled “Asia is entering a new, post-youth era,” explores the demographic transitions occurring across the region.

The article focuses on the ageing population and its implications, as the older “Boomer” generation retires and younger generations, particularly millennials, advance in their careers.

It discusses how Asian countries are moving from a period of benefiting from a youthful, productive workforce to a new phase of demographic change. According to the piece, many leaders in Asia have not yet addressed this transition comprehensively, often prioritising short-term policy goals over long-term demographic shifts.

However, a graph included in ST piece illustrates a demographic trend in Singapore that appears inconsistent with other reports, including the Population in Brief published by Singapore’s Prime Minister’s Office on 24 September 2024.

While ST graphic depicts a predominance of young individuals in their 20s, the official Population in Brief indicates a significant shift towards an ageing population in Singapore.

It notes that 19.9% of Singaporeans were aged 65 years or older as of June 2024, and the country is expected to become “super-aged” by 2026, when over 20% of its population will be 65 or older.

By 2030, one in four Singaporeans is projected to fall into this age group.

The contrast between the opinion piece’s graph and the official data has led to questions about why no correction or clarification has been issued by ST, especially given the serious nature of demographic statistics.

As of 11 October 2024, ten days after the opinion piece’s publication, no edits have been made to address the discrepancies.

Additionally, no correction has been mandated through the Protection from Online Falsehoods and Manipulation Act (POFMA), a regulatory tool that the Singaporean government uses to correct misinformation.

This raises further questions: Is the lack of correction because the discrepancies are seen as insignificant, or is it a reflection of the media’s influence? Does the absence of a POFMA directive suggest selective application of the law, or is it a sign of a more lenient approach towards established media?

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Hong Kong

Former STAND News journalists jailed for sedition in landmark Hong Kong case

On 26 September 2024, former Stand News chief editors Chung Pui-kuen and Patrick Lam were sentenced in a landmark sedition case. Chung received a 21-month prison term, while Lam’s sentence was reduced due to health issues. The ruling is seen as part of Hong Kong’s crackdown on press freedom.

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Chung Pui-kuen, former chief editor of the pro-democracy news outlet Stand News

On 26 September 2024, a Hong Kong district court sentenced Chung Pui-kuen, former chief editor of the pro-democracy news outlet Stand News, to 21 months in prison for sedition.

The case, which marks the first time a journalist has been jailed for sedition since Hong Kong’s return to Chinese sovereignty in 1997, is seen as part of an ongoing crackdown on media freedom in the city. Chung, aged 55, had led Stand News during the height of the 2019 pro-democracy protests.

Chung’s co-defendant, Patrick Lam, who also served as a chief editor, received a sentence reduction due to serious health issues, with the judge ruling that a return to prison could endanger his life.

Lam had already spent nearly a year in detention and will not face further jail time.

The two editors were found guilty in August 2024 of “conspiracy to publish and reproduce seditious publications,” under a colonial-era law that carries a maximum two-year prison sentence.

District Court Judge Kwok Wai-kin, who presided over the case, argued that Stand News had engaged in actions that opposed the government rather than genuine journalistic work.

“They were taking part in the so-called resistance,” Kwok stated, pointing to the publication’s support for the pro-democracy movement.

He emphasized the influence of Stand News, which had 1.6 million followers at the time of its shutdown in 2021, claiming that the seditious articles had caused significant, though unquantifiable, damage.

Kwok maintained that prison was the only viable sentence.

International outcry

The sentencing has drawn swift condemnation from international rights organizations and foreign governments.

The United States denounced the convictions as an attack on media freedom, and the European Union called on Hong Kong authorities to stop prosecuting journalists.

Amnesty International’s China director, Sarah Brooks, noted that the ruling seems aimed at fostering a “chilling effect” on the press, discouraging criticism of the authorities both in Hong Kong and abroad. Brooks added that the situation reflects the growing repression of free speech in the former British colony.

Joseph Ngan, Chair of Hong Kong Media Overseas, expressed concern over the broader implications of the case. “This case, with its landmark ruling outlawing criticism of the government, makes clear that Hong Kong has come fully into line with laws prevailing in Mainland China,” Ngan said. He recalled that Hong Kong had been promised freedom of speech after the end of British colonial rule, a promise that, he noted, “is now a distant memory.”

The press freedom watchdog Reporters Without Borders (RSF) echoed these concerns. Cédric Alviani, RSF’s Asia-Pacific Bureau Director, condemned the imprisonment of Chung and called for his immediate release.

He emphasized that both Chung and Lam were acting in the public interest by reporting on social and political issues in Hong Kong, and he urged the international community to increase pressure on China to secure their freedom, alongside other detained journalists in the city.

The rise and fall of STAND News

Stand News, a non-profit Chinese-language news site, was among Hong Kong’s most influential independent media outlets. At its peak, it had over 1.7 million followers on Facebook and nearly one million on Instagram.

The publication gained significant attention during the 2019 protests, offering extensive coverage of the pro-democracy movement.

In December 2021, the outlet was raided by 200 police officers, leading to the arrest of six journalists, including Chung and Lam.

That same day, Stand News announced its closure and terminated its staff after the government froze its assets, valued at approximately 61 million Hong Kong dollars (US$7 million). Around 70 employees lost their jobs as a result.

The prosecution in the case against Chung and Lam presented at least 17 articles published by Stand News between July 2020 and December 2021 as evidence.

These articles included interviews, profiles, and opinion pieces that the authorities deemed seditious. The trial, which ended in June 2023, saw the two journalists detained for nearly a year before being granted bail under strict conditions, including weekly reports to the police and a prohibition on giving media interviews.

Declining press freedom

In recent years, Hong Kong has seen its ranking in global press freedom indices fall dramatically.

According to Reporters Without Borders, the city dropped to 135th out of 180 countries in its 2024 World Press Freedom Index, a stark contrast to its position just two decades ago when it ranked 18th. Meanwhile, China remains near the bottom of the index, ranking 172nd.

Chinese officials in Hong Kong have rejected international criticism of the sentencing, maintaining that Stand News functioned as a political organization rather than a legitimate news outlet.

The government’s position reflects broader efforts to align Hong Kong’s governance and legal frameworks more closely with those of Mainland China, particularly in terms of controlling dissent and regulating the media.

The sentencing of Chung Pui-kuen underscores the growing constraints on press freedom in Hong Kong, further solidifying the city’s shift away from its reputation as a bastion of free speech in Asia.

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