Overview
- Hong Kong is the marketing services capital of Asia, where a full range of services can be found. The sophistication of the market has attracted a strong presence of multinational agencies and a critical pool of marketing services talents. The majority of multinational agencies have their regional headquarters set up in Hong Kong to take care of their regional business.
- Hong Kong’ advertising spending reached a record high in the first half of 2011 due to strong marketing campaigns in the banking, tourism and entertainment sectors. On the other hand, Hong Kong’s exports of marketing services amounted to HK$4.9 billion in 2009 despite the global economic downturn, expanding 3.5%.
- Owing to the positive market conditions, marketing services industry is expected to continue expansion in the next few years. ZenithOptimedia expects the adspend of Asia-Pacific excluding Japan to rise 10.2% a year between 2011 and 2013. China is expect to grow 13.6% in 2011, thus making it overtake Germany to become the world’s third-largest advertising market.
- The Chinese mainland is widely regarded as having the best growth potential for marketing services companies. Hong Kong is the gateway to this land of opportunities in light of the mainland's World Trade Organisation (WTO) liberalisations and the Closer Economic Partnership Arrangement (CEPA) agreement with the mainland.
Industry Data
|
Advertising and Market Research
|
Mar 2009
|
Mar 2011
|
% change
|
|
Number of Establishments
|
3,090
|
3,380
|
+6.39
|
|
Number of Persons Engaged
|
14,318
|
13,561
|
-5.29
|
Sources: Quarterly Report of Employment and Vacancies Statistics, Census and Statistics Department
Range of Services
Hong Kong offers a full range of marketing services (advertising, brand/image consulting, event organising, public relations/corporate communications and market research). Large Hong Kong-based companies are able to provide one-stop solution to clients. Hong Kong has a highly developed consumer market, which offers an excellent testing bed for marketing concepts and techniques. Hong Kong companies are thus sophisticated users of marketing services.
Advertising: Advertising agencies initiate, manage and implement advertising campaigns. In general, advertising agencies provide three major types of services, namely account management, creative services and media planning. Those that provide all three services are traditionally called full-service agencies. Some bigger multinational agencies also provide related services such as sales promotion and public relations, while smaller ones may only provide a more limited range of services. Many advertising agencies spin off their media planning department as specialist companies.
Brand Consultancy: There is growing awareness of the importance of branding and corporate identity by enterprises as an essential component of business success, especially among those that would like to expand beyond home market. Agencies which specialise in brand consultancy have become increasingly high-profile players. Services provided include brand strategy, brand extension and expansion, brand communications and planning and internal branding.
Event Organising: Being the premier trade fair capital in the region, Hong Kong is the host to a wide range of trade fairs and international events. In general, the larger international event organisers tend to provide a one-stop-shop solution by organising conferences, seminars or other side events as a supplement to the exhibitions and have a wide variety of shows. By contrast, the smaller organisers tend to specialise in organising similar shows in different locations.
Market Research: Market research involves studying people as buyers, sellers and consumers, examining their attitudes, preferences, habits, and purchasing power. Market research is also concerned with the channels of distribution, promotion and pricing, and the design of the products and services to be marketed. A large portion of the work performed by most market research firms is commissioned by specific companies for particular purposes. However, some firms also routinely collect a wide spectrum of data and then attempt to sell some or all of it to companies that may benefit from such information. Market research may be quantitative, qualitative, or a combination of both.
Public Relations: PR professionals help clients to develop communication and understanding with the target audiences. Services include media relations, marketing, copy-writing, press office, sponsorship, events and conference management etc.
Service Providers
Hong Kong has a developed marketing services market which is dominated by the multinational agencies. Many multinational marketing services companies have a strong presence in Hong Kong and have their regional headquarters set up here to take care of their regional business. There are also a large number of smaller companies / consultants.
Exports
|
Advertising, Public Relation Services and Market Research
|
2007
|
2008
|
2009
|
|
Advertising, market research & public opinion polling services (HK$ mln)
|
4,770
|
4,748
|
4,902
|
|
Year on Year Growth %
|
11.1
|
-0.5
|
3.2
|
|
Contribution to total services exports (%)
|
8.8
|
7.8
|
8.0
|
|
Business & management consultancy & public relations services (HK$ mln)
|
20,159
|
21,914
|
22,621
|
|
Year on Year Growth %
|
18.6
|
8.7
|
3.2
|
|
Contribution to total services exports (%)
|
37.1
|
36.0
|
37.1
|
Source: Report on Hong Kong Trade in Services Statistics for 2009, Census and Statistics Department
Major services exported include: creative advertising, media buying, direct marketing, graphic design, marketing consultancy, customised market research and sales of research data. Other related exports include Hong Kong-based crew producing advertisements on behalf of overseas clients.
Industry Development and Market Outlook
Hong Kong' advertising spending reached a record high in the first half of 2011 due to the active marketing campaigns in the banking, tourism and entertainment sectors. According to admanGO, a media-monitoring firm, total adspend amounted to HK$16.56 billion (US$2.12 billion) from January-June 2011, rising 16% YoY on the back of global recovery. Advertisers in the banking and investment services sector continued to top the league, with a growth of 19% YoY in the first half of 2011.
According to ZenithOptimedia, adspend of Asia-Pacific excluding Japan is expected to jump by 10.2% a year between 2011 and 2013 as a result of positive market conditions. Owing to the devastating earthquake in March 2011, the market prospect for marketing services in Japan has become less constructive. By contrast, China’s adspend is expected to continue its robust growth, with an annual growth of 13.6% from 2011-2013.
China was the world's fourth biggest advertising market in 2010, after the US, Japan and Germany. However, China is expected to overtake Germany to become the world’s third-largest advertising market in 2011.
Top 10 countries by advertising expenditure, 2010
|
Rank
|
Countries
|
US$ million
|
|
1
|
USA
|
151,519
|
|
2
|
Japan
|
43,297
|
|
3
|
Germany
|
24,535
|
|
4
|
China
|
23,208
|
|
5
|
UK
|
18,042
|
|
6
|
France
|
13,181
|
|
7
|
Brazil
|
12,950
|
|
8
|
Italy
|
10,801
|
|
9
|
Australia
|
9,705
|
|
10
|
Canada
|
8,891
|
Source: ZenithOptimedia
Advertising Spending in China
|
Media Outlet
|
2009 (US$bln)
|
2010 (US$bln)
|
% Change
|
|
TV
|
57.9
|
68.6
|
11%
|
|
Newspapers
|
9.7
|
12.2
|
19%
|
|
Magazines
|
1.9
|
2.4
|
19%
|
|
Radio
|
1.5
|
2.3
|
33%
|
|
Outdoor
|
3.4
|
4.2
|
16%
|
|
Total
|
74.4
|
89.7
|
13%
|
Source: CTR Media Intelligence
Thanks to the optimisation of advertising resources, China’s total adspend saw a growth of 13% in 2010, according to the CTR Market Research. Among all sectors, radio media experienced the fastest growth, up 33% from 2009. Although TV advertising lagged behind other media, the sector still captured the largest market share, followed by newspapers and magazines.
According to ZenithOptimedia, Hong Kong’s adspend grew in 2010 on the back of global recovery. Total spending on advertising amounted to US$2.7 billion, up by 3.3% from 2009. Unlike China, newspapers represented approximately 35.2% of the total adspend in 2010, making it the most important advertising medium in 2010. The banking and investment community continued to be the biggest spending category, led by HSBC and Citibank.
Hong Kong’s total adspend will likely reach US$3 billion in 2013, with the internet sector expected to register the fastest growth of 6% from 2010’s level.
The demand for Hong Kong's quality marketing services, from MNCs as well as established companies on the Chinese mainland, has been rising in light of a more competitive post-WTO environment.
- With more foreign companies entering the mainland market, fierce competition drives up the demand for spending on marketing services.
- Hong Kong companies with manufacturing facilities on the mainland focus more on domestic sales and distribution. Hong Kong marketing services companies are old partners to work with.
- More and more mainland companies come to understand the importance of advertising, brand building and corporate identity building. Increasing competition and more sophisticated consumers will necessitate mainland enterprises to pay more attention to market intelligence.
- There is increasing demand for public relations service from mainland companies that are going "global". They will need advice from communications professionals with experience and expertise. Given the language and cultural proximity and the fact that such mainland companies usually have a base in Hong Kong, they are more likely to entrust Hong Kong marketing services firms to advise on achieving a quick and seamless integration with the international community.
Hong Kong's marketing services companies are first-movers in the mainland market. Mainland business has also become an increasing source of income for Hong Kong marketing services companies. The CEPA agreement further facilitates Hong Kong marketing companies' expansion in the mainland market. For instance, Hong Kong companies were permitted to establish wholly-owned advertising firms on the mainland as early as 2004. As of June 2011, the Hong Kong government had granted HKSS certificates to 108 advertising companies out of 115 applications.
CEPA has also helped Hong Kong companies engaged in trade mark business to enter the Chinese mainland market. Supplement I to CEPA signed in 2005 stipulated that HKSS are permitted to set up limited liability corporations in the form of joint ventures on the mainland, undertaking a range of trademark-related business, including the provision of legal advice, and acting as legal consultants on trademark laws. As of June 2011, 9 trade agencies had obtained Hong Kong Service Supplier (HKSS) certificates.
Supplement I to CEPA also stipulated that Hong Kong residents with Chinese citizenship can take the National Qualification Examination for Patent Agents and practice in a mainland patent agency after passing the examination and completing a year of apprenticeship, handling patent-related business including consultation services.
Supplement IV to CEPA also stipulated that HKSS are allowed to set up joint venture enterprises in the Mainland to provide market research services.
