NZ advertisers continue strong support of online

NZ advertisers continue strong support of online in tough times

Auckland, 11 June 2009

The latest IAB Insight Report for Q1 2009 was released by the Interactive Advertising Bureau of New Zealand and PricewaterhouseCoopers today.

The first quarter of 2009 has delivered a very strong result for interactive advertising in New Zealand with spending at $49.26m, up 7.99% on Q1, 2008’s total of $45.86m.

It is believed that interactive is the only major medium to show any positive growth in this quarter (other mediums do not release quarterly figures).

Kevin Bowler, Chairman of IAB NZ commented

“...the continued strong growth in Q1, 2009 is very satisfying in these tough market conditions.

Whilst numbers have not been published by other media, industry insiders have suggested much of the traditional media market is at least 10% down on the same period in 2008. In this challenging context, the interactive result is very pleasing.

Although the interactive classified segment is likely to continue to be adversely affected by the market in the foreseeable future, we are anticipating continued growth in the display and search segments throughout 2009.

Interactive media will continue to outperform the media market as advertisers demand more accountability and efficiency from reduced media investments in 2009.”

PricewaterhouseCoopers Partner Chris Perree commented on the findings: “Given that we are still in the grips of recession, it’s gratifying to see that the online advertising industry is still performing” he says.

“there has been strong growth in the total market year-on-year, and overall the trends highlighted in these quarterly reports show that online advertising is perceived by the market as value for money, especially when there is an anecdotal decrease in advertising spend in general.”

Search and Directories led the way with a stunning 27.00% growth over Q1 2008. Classifieds were down 8.55% over the same period last year, reflecting the challenges faced in the real estate, motoring and Jobs sectors that are significant categories in t he classifieds market.

Search and Directories is now the largest type of interactive advertising, accounting for 38.10%, moving ahead of Classifieds on 35.63%. This trend is consistent with other more developed markets where Search typically represents about half of all spend online, and the balance is fairly equally split between Display and Classifieds.

Display advertising continued its strong performance, growing 11.17%, reflecting strong support from advertisers who have made more significant cuts in spend across other media. Display advertising represented 26.27% of all spend.

“....this result also underlines the versatility of online – it is not just one medium against the other more traditional media. It is a wide range of interactive formats with varying strengths to achieve varied marketing objectives, from an engaging game to improve brand likeability, to text links to generate leads for a high value sale. added Greig Buckley, CEO of the IAB.

The trends varied across different categories. Telecommunications was down from 13.42% to 8.85% – probably in anticipation of a very active second quarter with the new mobile network launch and higher competitive activity. Government Department advertising was down from 13.37% to 10.51%, reflecting the new, tighter spending controls.

Travel and Accommodation, and Investment Finance and Banking held up surprisingly strongly and dominated with 15.39% and 14.43% shares respectively. The top five categories continue to account for about 60% of total spend.

Surprisingly, Automotive held up at 7.79%, just ahead of the growing Food and Beverage category at 6.87%. Retail dropped from 4.70% in Q4, 2008 to only 2.94%, only 2.94%, but this is an expected seasonal trend.

Buckley also noted that “We are hearing of more clients now asking their agencies to look at how interactive can fit into their marketing activities, so we anticipate this growth will continue through 2009.”

ENDS

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