The Annual Advertising Spending Projection Survey conducted by Nielsen in collaboration with Hong Kong Advertisers Association (HK2A) reflects an optimistic, albeit cautious, outlook for 2021, and reiterates the need for digital transformation and innovation.
The spokesperson of the association said that as the world begins to reopen, it’s clear the pandemic will have lasting impact on consumer behavior and brand-to-consumer engagement. They saw how the ‘new normal’ gave rise to much greater emphasis on digital activity. This is therefore likely to be a year of pronounced digital innovation and more technology-driven empowerment to help marketers develop successful strategies and enhance the customer’s digital journey.
On a positive note, 73% believed there will be a recovery in Hong Kong’s economy. The optimism, however, leans towards their own immediate companies though, as 46% of the respondent advertisers believe their companies will be better in 2021 than in 2020, whereas only a respective of 35% and 30% believed the same for their industry and Hong Kong overall.
Leading the way of that recovery are believed to be Pharmaceutical and Healthcare, Packaged Food, and Technology/Telecommunications industry – the same top 3 industries in the 2020 survey. Tourism-related industries, such as Retail, Retail-Food Outlets, and Travel & Tourism, while saw a jump in the rankings for business growth, are expected to take longer to recover, as 33% believed the Retail, Food & Property sector, alongside 36% in Banking, Finance & Insurance, to complete a recovery in 2022 or beyond.
Ad-spend-wise, a quick review of 2020’s spending shows a 18% year-on-year decline. Digital adoption during the pandemic has certainly accelerated which brought about the shift toward online advertising. The 2021 advertising budget forecast is a split of 64% online versus 36% offline, which implies a 5-point shift to online formats.
89% respondents agreed that the top channels, online or offline, to invest in are paid social/social network, video ads, content collaborations, KOLs and paid search. Among the top 10 media choices cited, only three are offline channels, with TV and event marketing ranking sixth and seventh.
This shift in allocation could well reflect a paradigm shift brought upon by the pandemic, as respondents reported an acceleration in digital interactions, with 61% in social media exposures, 58% in digital agility for communication, 55% in e-Commerce and 44% in virtual events and workshops.
Many believe this transformation will continue in 2021 and are preparing to embrace as such – e-Commerce enabling shooting to the second top trend for adoption, with 44% respondents citing its importance, up from 32% last year. Big data management remains the top of the list but with much less conviction (49% in 2021 survey vs. 64% in 2020 survey). Especially worth noting is live streaming, which was not even on the radar before this year, taking home third place with 38% of respondents citing its importance.
To conclude, even though challenges remain, as they always will, dare we say that the worst is behind us and today we find ourselves in a new playing field, one where digital interaction leads the way and opportunities aplenty if we move quickly. The overused term “new normal” describes how we interact with each other, and most definitely how we market, advertise and engage – adapt well and there will be much more to be optimistic about in 2022.