State of the Nation: A look into 25 years of media in Hong Kong

The Covid-19 pandemic made its mark in the last few years, drastically accelerating and shifting consumer behavior in this highly dense city of 7.5 million and, by extension, the media landscape.

Media agencies have evolved a long way since the sounds of fax machines and printouts of media recommendations. There was a time media agencies handled the traffic of TV commercial tapes and newspaper films and would hand deliver outdoor advertising materials. The industry relied heavily on physical documents – all presentations and storyboards were in hard copies!

There were six big trends that changed everything.

1. The widespread adoption of smartphones revolutionized media

In the late 1990s and early 2000s, desktop computers dominated personal device use, accelerated by the introduction of the World Wide Web. The launch of smartphones in the late 2000s and their advancements in the early 2010s made information and entertainment more accessible than ever. We moved from using our phones for essential calls, and Snake and Tetris games to news updates, GPS, photos, videos, booking services, and more. Hong Kong reportedly has one of Asia's highest smartphone penetration rates, with almost 90% of residents over ten years old owning a smartphone today

They led to a shift from traditional media, like print and TV, to digital platforms, including social media, video streaming, and online news portals. According to our OMG proprietary Video Content Viewing Landscape research, 91% of video content is streamed across social media platforms in Hong Kong, particularly among the younger generation (18-24-year-olds) who spend 4.4 hours daily consuming videos on their smartphones.

And they've changed how we shop. Hong Kong e-commerce really took off during the pandemic and has not slowed down with the continued growth to be expected. E-commerce revenue is expected to show an annual growth rate of 10% (CARG 2023-2027). Smartphones offer consumers a one-stop shop to understand brand products, place orders, communicate with customer service, and conveniently track delivery through a seamless application. Although Hong Kongers still treasure the in-person shopping experience, their growing preference for digital transcends not just shopping. This is evident with the rise of industries such as virtual banks and virtual insurance.

2. Outdoor advertising has a unique role

Despite the rise of digital media, outdoor advertising continues to maintain a unique and powerful presence in Hong Kong. The city's dense urban landscape and extensive public transportation system of buses and railway lines, allow advertisers to reach millions of residents and tourists through billboards, bus shelters, and other outdoor spaces.

Historically out-of-home media in Hong Kong typically consisted of traditional advertising formats such as billboards, bus shelter ads and transit ads. These ads were primarily static and relied on eye-catching graphics and catchy slogans to capture the attention of those passing by. Out-of-home media buys were typically done through direct negotiations with media owners on a fixed price for a set period, with little flexibility for changing the ad or adjusting the placement.

In recent years, traditional out-of-home (OOH) advertising has undergone a digital transformation. Technological advancements, the availability of high-speed internet, and the development of new digital display technologies have driven this change. Now OOH offers multiple messages, easy edits, quicker turnarounds, movements and special effects.

One key feature is real-time bidding (RTB) to buy and sell digital OOH advertising space. RTB allows advertisers to bid on digital OOH ad space in real-time, based on various targeted criteria such as location, time of day and audience demographics. This enables advertisers to reach their target audiences more effectively and efficiently, and adjust their real-time campaigns based on performance data.

Another is the ability to create more impressive and engaging OOH experiences for viewers. This can include interactive features such as touchscreens or motion sensors, 3D visual effects, and even augmented reality (AR) or virtual reality (VR) experiences. These features can help to capture viewers' attention and create a more memorable and impactful advertising experience.

3. Attention shifts to the Greater Bay Area

Hong Kong's media landscape has long been dominated by Television Broadcasts Limited (TVB), the territory's leading free-to-air TV broadcaster. It has been essential in shaping local and South China’s entertainment and advertising.

Hong Kong people’s media consumption has seen both East and West influences over the years. During the pandemic, video streaming platforms like Netflix and Disney+ experienced unprecedented growth. According to our Video Content Viewing Landscape study, as of December 2022, Netflix viewership has increased by 46% and Disney 25% in Hong Kong.

Recently Hong Kong has also witnessed an uprising in the amount of time spent on Chinese platforms such as WeChat and Alipay, which has reshaped media consumption habits and payment methods in Hong Kong.

The future focus for companies in Hong Kong is the development of the Greater Bay Area (GBA), which comprises the two Special Administrative Regions of Hong Kong and Macao and the nine municipalities of Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen and Zhaoqing in Guangdong Province. The development of GBA is to facilitate and support integration and coordinate regional economic development.

This growing hub for innovation and technology is a key strategic focus in media planning.

An example is how Hong Kong vendors, such as TVB, leverage these policy changes for innovation. TVB is now starting to think about promoting and linking content between Hong Kong and other GBA cities. TVB produced its first live e-shopping programme in 2022 in response to the growing ambition of Hong Kong TV stations to capture market share in the Greater Bay Area.

Other examples of how Chinese brands leverage GBA opportunities are through live e-shopping programmes that have become particularly popular on platforms such as Taobao Live, JD Live and Kuaishou, which have seen significant growth in recent years. According to a report by eMarketer, live e-commerce sales in China are expected to reach $305bn, accounting for more than 10% of all e-commerce sales in the country. The popularity of live e-shopping programs in the GBA can be attributed to several factors, including high internet and mobile penetration rates, increasing consumer demand for interactive and engaging shopping experiences, and the growing influence of social media and KOLS.

4. Agencies grow their service offerings

Clients are seeking modern solutions fast. Evolving client needs have presented new growth opportunities for agencies to expand their service offerings to provide clients with comprehensive solutions.

The current media service offerings by the leading media agency groups in Hong Kong follow a globally initiated direction. Digital content development and data analytics are strategic arenas that most agencies are building on. However, the speed of development differs.

Omnicom Media Group is the leading agency group at the forefront of audience activation for precise and connected communication with audiences. We achieve this by forming a specialized performance team that focuses on delivering tangible results for clients through real-time campaign optimization; as well as a content team that provides content creation and influencer marketing; and a data team to respond to market trends and consumer behaviors with data dashboards, audience analysis and segmentation in advanced data platforms. Our data specialist service recently helped McDonald’s grow its mobile orders by 550% with Google Analytics 4, a Global-first GA4 Predictive Audiences Activation.

5. Clients shift their campaign focus to digital

The traditional to digital media shift has profoundly impacted campaign planning and execution. Today, advertisers prioritize promotional content over brand-focused messaging, harnessing the power of digital channels to reach specific target audiences.

Although promotional lower-funnel campaigns can drive short-term results effectively, there are considerations: higher costs for driving incremental conversions, limited reach towards a broader audience, shorter lifespan when focused on driving immediate actions, and higher competition. Such lower-funnel campaigns can be valuable for advertisers looking to drive conversions and sales, but they should be used in a broader marketing strategy, including upper-funnel campaigns, to build brand awareness and equity over time.

It is important to balance upper and lower-funnel campaigns to achieve long-term success in marketing, so full-funnel planning is becoming more critical. These campaigns typically have a more specific and measurable objective, such as driving website traffic, generating leads or increasing sales. Full-funnel campaigns are often more data-driven and rely on targeting, messaging, and optimization strategies to achieve goals.

6. Brands modifying how they measure business returns

With the help of advanced tracking methods and technologies, we can now measure actual sales generated by marketing efforts. This allows clients to understand better the return on investment (ROI) of their marketing campaigns and make informed decisions about future strategies.

Attention is also becoming scarce, and brands are fighting more for audiences’ interest. Quantifying and managing consumers’ attention across planning and activation as a measurement metric is increasingly becoming more essential. At OMD, we have embedded attention data into our workflow platform to take an attention-adjusted approach to channel allocation, allowing us to provide clients with an allocation of spend that is more reflective of reality and more likely to provide a greater return on ad investment.

Brands are also becoming more carbon conscious and are prioritizing environmental, social, and corporate governance.

Looking forward to the next 25 years and beyond

While the media landscape has come a long way in 25 years, there’s no slowing down, and the media scene will continue to evolve as new technologies emerge and consumer needs change.

Digital Media continues to flourish with the next generation of web3, as mobile video, virtual and augmented reality accelerate, and the use of data is refined and developed.

The metaverse, which aims to build the next evolution of digital connection presents new opportunities for businesses to engage with customers and co-create experiences in a virtual world. Direct-to-avatar and virtual-to-physical commerce are just some examples of potential business models for the metaverse, with brands selling virtual products and using 'non-fungible tokens' (NFTS) for virtual exchange. We look forward to more brands staking their claim in the virtual world as we begin to understand what the virtual future has in store. We anticipate more businesses will build "Cross Reality Platforms” with inclusive settings and products that connect consumers’ physical and virtual needs.

Change presents exciting opportunities for businesses to grow by embracing the latest innovations to offer more experiences to their consumers. As we celebrate 25 years in business, with OMD Hong Kong as the first standalone full-service operation globally, we honor this milestone, reflect on our journey to become the world’s largest media network, reminisce on how the Hong Kong media landscape has evolved, and look towards the exciting possibilities of the future.