Free newspapers stimulate adspend in Hong Kong

Ad-spending on brands in the beverages, travel & tourism services, and retail categories went up beyond average, while the statistics also show a shift from paid to free newspapers.

A battle amongst local newsprint owners has recently erupted, with the launch of the free Sky Post and Sharp Daily. Two key paid titles, Oriental Daily News and The Sun, reduced their prices in response to the increased competition. Yet it failed to stop the drop in ad revenues of paid papers during the third quarter.

Since the launch of Sharp Daily, the top 10 advertising industries in free newspapers remained the same as that of the whole newspaper industry. However, the retail and cosmetics & skincare categories recorded a decrease in adspend in paid newspapers of three per cent and 28 per cent respectively, with advertisiers shifting parts of their budgets to free newspapers.

Aside from affecting the paid newspaper market, the addition of the two free newspapers also posted great challenges to the existing free newspaper market. During the third quarter, year-on-year growth for am730, Headline Daily and Metropolis Daily have all slowed.

In terms of advertising revenues, all media groupings monitored recorded a year-on-year increase. The most significant growth went to outdoor medium, with an increase of over 50 per cent while the share of the medium also rose to 12.97 per cent of total ad-spend in the third quarter.

Amongst the top 10 industries, beverages and cosmetics & skincare market enjoyed a significant year-on-year increase in adspend, mainly due to increased demand from mainland travellers. The increased adspend from beverages was greatly contributed by the milk powder brands which recorded year-on-year growth of 99 per cent and accounted for 60 per cent of the sector as a whole.

Aside from the traditional peak tourism season, which often boosts ad-spending at this time of year, the aggressive marketing budgets from local theme parks also contributed to the substantial year-on-year growth of advertising for the tourism industry. In July and August, the spending of Ocean Park rose by 38 per cent, focusing on promoting its new facility, "the Rainforest". Hong Kong Disneyland doubled its ad budget in September as compared to the same period in 2010, as it launched a Halloween event.

Facing intense competition in the smartphone and mobile tablet market, Samsung spent most of its ad dollars launching its new products, Galaxy S II and Galaxy Tab 10.1.

SK-II became the top spender for the third quarter for the first time. It spent most of its  ad budget on key brands Facial Treatment Essence and Skin Signature.

The retail industry was dominated by supermarket ads, and was also aggressive in terms of yar-on-year growth of adspend. Newspapers became the most favorable to the marketers of supermarkets as well as drug stores like Mannings - with 85 per cent of their ad budgets heading to the newsprint media in the third quarter, compared with 80 per cent for the same period last year.