Hong Kong – Advertising growth in Asia-Pacific will slow to 2.5 per cent in 2009, its lowest rate since 2002, according to the latest forecasts from Media Partners Asia (MPA). In 2008, regional ad revenues are projected to grow by 5.6 per cent to top US$91 billion in net terms. Vivek Couto, executive director at MPA says advertising is expected to decline in Japan, Hong Kong and Singapore, as well as in Australasia, next year. “There will be a slowdown in China, India and Indonesia, though growth in these markets will remain relatively robust. In other markets, including Korea, Taiwan and much of ASEAN, there will be little growth next year.” Shrinking ad spend in Japan and Australia will hamper Asia-Pacific’s regional growth story, though MPA also anticipates negative growth next year in smaller regional markets Hong Kong and Singapore. This means that the focus on cost control for media owners will become even greater as profit margins come under pressure. Non-ad revenue streams, while still robust next year, will also moderate. At the same time, risk aversion, tightening credit, the rising cost of capital and currency volatility, will adversely impact the growth and funding of media distribution and content in key markets such as India and China. Although the pace is notably slower than a year ago, MPA expects Asia’s two BRIC countries to maintain double-digit ad growth in 2009: 10.9 per cent in China, versus 21.8 per cent in 2008; and 12.1 per cent in India versus 17.6 per cent in 2008. Indonesia’s ad market will grow by 8.4 per cent (versus 12.3 per cent in 2008), boosted by elections next year, though weaker consumption will limit growth. MPA expects advertising growth to return to all markets in 2010, restoring regional ad growth to 6.4 per cent, greater than estimates for 2008, pegged at 5.6 per cent. Excluding Australia and Japan from the forecasts changes the picture somewhat, increasing expected regional ad growth next year to 7.2 per cent and 9.7 per cent by 2010 versus estimated growth of 13.2 per cent in 2008. Digital (internet, OOH and broadband pay-TV distribution), will power media earnings growth over the medium term. Online revenues in Asia are expected to grow at a CAGR of 15 per cent over the next two years with ad growth moderating, most notably in big online markets Korea and Japan, but still comfortably outperforming the broader market. Ad sales indicators for the bulk of the Chinese digital sector remain robust.