Doozy of a year for the digital sector

  • Advertising
  • February 15, 2012
  • Cath Winks
Doozy of a year for the digital sector

What GFC? The beans have been counted, the results are in, and it's all good news for online. The IABNZ/PwC Insight report released today had the total online ad spend up nearly a quarter on the previous year. Display advertising has overtaken classifieds for the first time, up $1.27m (4.80 percent) on its previous quarter, making it the biggest quarter for display since PwC started measuring, back in 2007. The total online advertising spend in New Zealand for 2011 was $328.11 million, up 24.16 percent from 2010. 

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

 

 

 

Liz Fraser, IABNZ chair and general manager MSN New Zealand says “The full year results are exceptional with 24.16 percent 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 percent 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 percent.”

Total Market Growth:

 

“IABNZ estimates online ad spend will increase its share of the total ad spend market from its current position of 12 percent to 19 percent by the end of 2013. We were forecasting an increase of 19.8 percent for 2011 and I’m pleased to say we were wrong... we grew 24.16 percent instead,” says 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 still in its infancy it has enormous potential for growth. The significant increase in smartphone penetration in recent years, and the increase in mobile internet use should see more media dollars being spent on this channel. In 2011, mobile ad spend in NZ was $632,092. Across the ditch, 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 . Total online ad spend in Australia for 2011 was A$2,660m giving mobile a 1.39 percent share.

Quarter 4, 2011
Total online advertising spend in the fourth quarter of 2011 was $87.11m, up 20.52 percent year on year. Display advertising in the same quarter was $27.03m – its biggest quarter to date. Both email and online video spend increased throughout 2011:


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

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


 

 

 

 

 

 

 

 

Sandra King, group sales and marketing manager, Fairfax Media says: "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."

NZ Digital Media Mix

“It’s remarkable to see the completion of our fifth year of the report. Back in 2007, the overall total spend for the year was $135m, equivalent to the 2011 Search and Directories total of $135m. Compared to five years ago, total online advertising expenditure of $328m for 2011 has increased an incredible 143 percent in dollar value and represents the largest year-on-year growth since 2008 at 24 percent.  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,” says Chris Perree, a PwC partner.

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