In many developed markets, digital ad spend has overtaken print. But, despite consistent drops over the past few years, the local publishing sector has held firm in second place behind television, according to ASA figures. The IAB has predicted the change will happen in New Zealand next year, but, according to year-on-year SMI data, which collects ad spend from the 15 top media agencies in the country, that's already happened.
Across all categories, SMI data shows digital in second spot with $179 million for the calendar year 2014, up 16.6 percent or $25.6 million. That’s behind TV on $414 million and well ahead of newspapers in third place on $82 million, although SMI’s global director, analytics, Tristan Masters points out that some of the digital revenue generated by publishers goes into that digital pot. Also, as there are often late digital bookings, the digital ad spend number is likely to go up slightly.
In the top five verticals—retail, financial services and insurance, telecommunications, automotive and travel, tourism and hospitality—digital spend increased across the board, with the biggest rise of 40 percent to $15 million in retail (it still lags behind TV, newspapers and radio in the retail category). It was up 22 percent in the financial services and insurance sector to $26 million, up 19 percent in telecommunications to $22 million (taking the top spot ahead of television) and up 17 percent in automotive to $13 million.
Digital spend in the travel, tourism and hospitality category increased by just 1.3 percent to $24 million, but it is also the most popular channel in that sector ahead of TV.
Zenith Optimedia has also predicted that online will overtake TV by 2016 in New Zealand.
All up, SMI says total spending through agencies was $882 million, down 3.7 percent on the same time last year. And when adjusted for the top 10 categories, which make up 71 percent of total spend, it’s down by 1.3 percent.
Ad spend is often seen as a canary in the economic coalmine. If confidence is low, it’s one of the first things to drop. If it’s high, it often increases. Various soothsayers predicted rises in ad spend last year, although Zenith Optimedia downgraded its predictions for 2015, but Masters says the trends are broadly consistent with what he’s seeing in other markets and it was in line with its predictions.
“Flat is the new growth, as they say.”
SMI doesn’t collect direct ad spend data so he admits that the decrease in total spend could show a "certain element of spend migrating away" from agencies. Some media owners claim they are growing their direct business (and as the likes of Google and Facebook start bypassing agencies and go direct to clients), so the SMI figures don't match up to those provided annually by the Advertising Standards Authority. SMI is open about the fact that it only offers a slice of ad spend insight, but he says SMI does capture 95 percent of New Zealand’s media agency spend, and a lot of the digital spend is still going through the major media agencies.