Online ad spend feels effects of economic malaise, but continues on upward trajectory

  • Digital
  • May 17, 2011
  • Ben Fahy
Online ad spend feels effects of economic malaise, but continues on upward trajectory

The IAB and its main protagonists have become quite accustomed to putting out press releases trumpeting rising online ad spend over the past few years. And, despite an expected decrease for the first quarter of 2011 in comparison to Q4 2010 as a result of the earthquake and generally unfavourable economic conditions, the worm is still heading swiftly upwards, with a 20 percent year-on-year increase and a total haul of $68 million, up from $26 million in Q1 2007. 

Traditionally, Q1 is the weakest quarter and 2011 was no different. However, classifieds, normally one of the weakest channels experienced seven percent growth on Q4, 2010. There's also some new, more specific info about display advertising in this round of numbers.

“For the first time, IABNZ requested revenue submissions to include a breakdown of video online advertising and e-mail advertising," says Liz Fraser, IABNZ chair and general manager MSN New Zealand. "In the past, these figures were included within the Display figure. Video online advertising came in at ten percent [or $1.9m of a total for display advertising of $19.76m] and e-mail advertising at one percent.

"Publishers know video advertising is growing, but we didn’t know how much higher the percentage would be compared to Australia and the UK, where both markets are at six percent of total display revenue. However, in the US, video online advertising is 14 percent of their display revenue. Advertisers are continuing to look for more cost-effective formats and video online advertising is one where they can enhance or replace their television schedules.”

All channels experienced year on year growth, with search and directories up 30 percent, display up 22 percent and classifieds up ten percent.

Search and directories is still the channel leader with a 38 percent share in Q1, but display advertising saw a fairly sizable drop of 19 percent from the last quarter.

“Four main industry verticals investment, finance and banking, government departments, services and communities, travel and accommodation and leisure, entertainment and media continue to represent close to 50 percent of all online display advertising spend. These industries recognised early-on that audiences had moved to online environments and now have sound campaign knowledge that they use to influence behaviour change, move brand preferences and convert sales."

Insurance has more than doubled its growth compared to the same period in 2010, while computers, real estate and retail are all showing more than 70 percent growth year-on-year.

“So far 2011 has been a year of ups and downs for the online publishing industry. Even before the February earthquake, it was apparent that the economy was weaker in the second half of 2010 and early 2011," says Alisa Higgins, general manager, IAB New Zealand. "On the up side, a recent IAB member survey showed most believe we will experience double digit growth with estimates ranging between 20-25 percent for the total year and between three-six percent for next quarter."

 

 

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