Online advertising in New Zealand grows by 24% in 2011

Online advertising in New Zealand grows by 24% in 2011

Wednesday, 15 February 2012

Total online advertising spend in New Zealand for 2011 was $328.11 million up 24.16% [% has been normalised due to changes in contributors] from 2010 ($257.46m). This is one of the key findings from the fifth year of IABNZ/PwC Insight report today released to IABNZ members.

Display advertising increased by $1.27m (4.80%) from the previous quarter (Q3, 2011) making it the biggest quarter for Display since PwC started measuring in 2007.

Year-on-year saw double digit growth across all online channels:

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Liz Fraser, IABNZ Chair & General Manager MSN New Zealand says “The full year results are exceptional with 24.16% growth year-on-year for total online revenue. No other media will be reporting growth anywhere near this figure, which shows advertisers are shifting their marketing budgets rapidly to online. Even with a softened economy, digital advertising is making tremendous gains. Online’s share of total advertising spend is likely to be 15% in 2011 (final figures to be released on 21 March 2012), which is slowly catching up to the internet’s share of the time people spend using this medium, at 24%.”

Total Market Growth

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“IABNZ estimates that online ad spend will increase its share of the total ad spend market from its current position of 12% to 19% by the end of 2013. We were forecasting an increase of 19.8% for 2011 and I’m pleased to say we were wrong... we grew 24.16% instead.” Alisa Higgins, General Manager, IAB New Zealand.

Mobile ad spend

For the first time, IABNZ and PwC are releasing an annual figure for mobile advertising spend for 2011. While mobile advertising in NZ is very much in its infancy it has enormous potential for growth. The significant increase in smartphone penetration in recent years, now up around 30% of all handsets [Vodafone NZ and IAB Mobile Advertising Council, 2012], and the increase in mobile internet usage should see more media dollars being spent on this channel.

In 2011, mobile ad spend in NZ was $632,092.

In Australia, PwC are predicting that spend on Mobile display advertising, excluding search, apps or subscriptions, will hit A$37m in 2011, rising to A$219m in 2014 [B&T http://goo.gl/Sut7b]. Total online ad spend in Australia for 2011 was A$2,660m [IABAU, 2011 Insight Report] which would give Mobile a 1.39% share.

Quarter 4, 2011

Total online advertising spend in Q4, 2011 was $87.11m up 20.52% year on year [% has been normalised due to changes in contributors].

Display advertising in Q4, 2011 was $27.03m – its biggest quarter to date with a 4.80% increase compared to Q3, 2011.

Both Email and Online Video spend increased over the period of Q1, 2011 to Q4, 2011:

• Email advertising increased from $0.24m to $0.61m

• Online Video increased from $1.90m to $2.64m.

"Another great quarter, and the full 2011 year, with a significant set of firsts for the online industry. The biggest change being revenue in Display advertising overtaking Classifieds for the first time. This highlights online display advertising becoming a destination for brand, driven by the new innovative advertising opportunities on offer by publishers. In 2012, we expect advertisers to further utilise these options, plus add online video and mobile to the mix, especially because of the strong audience performance of these. New Zealand still lags investment in video and mobile advertising when compared to the rest of the world and we believe is set to change". Sandra King, Group Sales & Marketing Manager, Fairfax Media.

NZ Digital Media Mix 2011

“It’s remarkable to see the completion of our fifth year of the IAB/PwC Insight report. Back in 2007, the overall total spend for the year was $135m, which is the equivalent to the 2011 Search & Directories total of $135m. Compared to five years ago, total online advertising expenditure of $328m for 2011 has increased an incredible 143% in dollar value and represents the largest year-on-year growth since 2008 at 24%. Online continues to be an effective advertising medium for organisations, with all channels experiencing double digit year-on-year growth.

With this exceptional growth, the realm of internet advertising is as promising as ever. The variety of platforms and technologies available for businesses to reach out online to their customers provide organisations with strong investment strategies. The Mobile platform opens up more positive opportunities to connect with consumers “on the go”, and we believe New Zealand will follow the international trends of Mobile online advertising spend increasing as the population of smartphone and tablet users continues to grow.

As businesses increase their investments in growing markets, such as mobile advertising, social media and online video, and with the continuing sustainable growth of the online market in New Zealand, there are strong foundations for another amazing year ahead in online advertising.” Chris Perree, Partner, PwC.

ENDS >>

About IAB New Zealand:
IAB New Zealand (IABNZ – www.iab.org.nz) represents New Zealand's fast-growing, exciting and dynamic interactive advertising industry. IABNZ is an affiliate of the international network of IAB offices in 26 countries. IABNZ’s mission is to drive awareness and usage of interactive media, and to play a central advocacy role in protecting and enhancing the interests of our members and their clients.

About PwC (formerly known as PricewaterhouseCoopers)
PwC (www.pwc.com) firms help organisations and individuals create the value they’re looking for. We’re a network of firms in 158 countries with close to 169,000 people who are committed to delivering quality in assurance, tax and advisory services.

"PwC" is the brand under which member firms of PricewaterhouseCoopers International Limited (PwCIL) operate and provide services. Together, these firms form the PwC network. Each firm in the network is a separate legal entity and does not act as agent of PwCIL or any other member firm. PwCIL does not provide any services to clients. PwCIL is not responsible or liable for the acts or omissions of any of its member firms nor can it control the exercise of their professional judgment or bind them in any way.

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