fbpx

Online juggernaut rolls on, gives radio and magazines the evils

PricewaterhouseCoopers and the Interactive Advertising Bureau have released the advertising spend figures for Q4 2010, and they make for pretty damn good e-reading if you’re in the digital biz, with a total of $71.11 million for the quarter, up from $67.93m in Q3 and up 26 percent year-on-year. Total spend was $257 million, up 20 percent from 2009 ($214 million) and up 33 percent on 2008 ($193 million).

Based on figures provided by 46 contributors (up from 32 when the first IAB/PwC Insight report was released in 2007), all channels showed positive growth when compared to the same quarter a year before, with search and directories increasing by close to 50 percent. This strong growth reflects a recent Wall Street Journal report that estimated Google’s revenue in Q4, 2010 would jump 20 percent. Away from the high-fives, however, search and directories’ increase of 19 percent to $93.06m was the smallest growth percentage to date.

For the first time, Facebook display figures are now included, which has helped enable more accurate reporting of the display sector. With over 1.8 million New Zealanders interacting via a social networking site, and social networks increasingly becoming the conduit for mobile communication, it’s logical that the growth in ad dollars in this area should follow suit (the largest growth percentage was from display, up 4.5 percent from Q3, 2010 compared with 4.3 percent for search and directories for the same period).

Classifieds dropped -0.79 percent from Q3, 2010, but year-on-year showed growth of 13 percent, which the report says reflects changing habits when it comes to searching for, researching and purchasing goods (often cars, insurance and finance, according to Roy Morgan) online.

“Recovery of online ad spend in 2010 was significant, with all three segments showing increases year-on-year in double digits,” says Liz Fraser, IABNZ chair and business manager at MSN. “Cracking the milestone of total online ad spend over the $250m mark puts this industry in line to surpass radio and magazines in 2010. Results are due out mid March.”

Laura Maxwell-Hansen, general manager, Yahoo!Xtra and IABNZ vice chair, was blunt about the benefits of her realm.

“Simply put, the sophistication of digital ad-targeting technology leaves broadcast media audience segmentation tools for dead and the increased media spend in these tools proves it,” she says.

In another first, display surpassed search and directories in terms of year-on-year growth and it is on course to show the strongest growth over the next few years as a result of the rise of online video and social media (ZenithOptimedia’s report on global advertising spend suggests there may be considerable under-reporting of campaign spending in these new areas).

“Who said the banner ad is dead? Display is back with double digit growth and with more sophisticated targeting, along with the rise in online video, mobile and social media, 2011 is bound to be kind once again to this channel. And let’s not forget classifieds, which recovered from negative year-on-year growth in 2009 to finish 2010 up 17 percent,” says Alisa Higgins, general manager, IAB New Zealand.

Globally, ZenithOptimedia believes the internet will surpass all other media except television by 2013 (in markets such as the UK, online ad spend already has the largest share of total ad dollars) and ad expenditure in newspapers and magazines is predicted to fall by two percent between 2010 and 2013.

“The key result of this update is the continued rise of developing markets and digital media, and their central role in driving global growth,” says Steve King, ZenithOptimedia’s worldwide chief executive. “In fact, the importance of the internet is underrepresented in these figures. Advertisers are investing a lot more in owned and earned media, where their activities do not count as ad expenditure in the traditional sense.”

As PwC partner Chris Perree says, total online spend for Q1 2007 was $25.82m. Compare this to the $26.29m reported in just the search and directories channel in Q4, 2010 and it’s a pretty phenomenal rise.

He says there were some seasonal drops encountered by several contributors but that was countered by the new contributors who joined the Insight project to provide spend on Facebook display advertising.

“The future is exciting and there is a real opportunity this year to reach out to the market and for more contributors to come on board. We know the market is bigger than this study reflects—if you are reading this report and haven’t yet joined the Insight project; it’s time to get involved.”

About Author

Comments are closed.