Since March 2019, Hong Kong had been experiencing a series of protests against the pro-Beijing extradition bill proposed by the government. The Yuen Long violence incident happened on the 20th July further intensified tension between the public and force.
Hong Kong’s advertising market had suffered due to the overall economy downturn and media owners and brands were being scrutinized for choosing side. Advertisers such as sports drink Pocari Sweat and insurance company Cigna Hong Kong had terminated advertising deals with leading commercial broadcaster TVB, alleging that the broadcaster was displaying pro-Beijing sentiments in its coverage of the protests.
The unrest echoes the 2014 Occupy Movement which resulted in sluggish advertising growth that lasted from 2014 through 2017, following a slight recovery in 2018. For 2019, IHS Markit has revised forecasts of Hong Kong’s advertising revenues from 3.0% growth to a flat 0.6%. TV advertising revenues will drop 9.0% while other media experience minimal impact. TVB controls 70% of the country’s TV advertising revenues, and we expect its income to fall 10% from HK$2.4 billion ($307 million) to HK$2.2 billion ($281 million), while revenues of other broadcasters PCCW and i-Cable to remain flat.
Print and online advertising were instrumental to the anti-extradition bill campaign and we project advertising revenues to gain. Advertisements, in the form of open letters, were placed by protesters on international newspapers including The Guardian and The New York Times to raise awareness and appeal for foreign intervention. Also, real-time information sharing and discussions happened online will boost traffic and thus, encourage online display advertising.
According to IHS Markit, Hong Kong nominal GDP growth will slow from 3.0% in 2018 to 1.9% in 2019, affected by political uncertainties and the US-China trade tensions. The overall gloomy economy outlook means more prudent spending by consumers and advertisers alike. Tourist’s spend will dwindle as we believe travel warnings to follow.