Who's in the money? Comparing SMI and Nielsen's 2013 media spend data

  • Media
  • January 28, 2014
  • Ben Fahy
Who's in the money? Comparing SMI and Nielsen's 2013 media spend data

Media spend figures from Standard Media Index (SMI), which launched in the New Zealand market last year, show a five percent increase in total spend in 2013, with big increases for cinema, digital and radio. So how does that compare to Nielsen's AIS ad spend figures?  

SMI, which is based on the bookings of New Zealand's top 15 media agencies, net of commission, doesn't release its figures publicly as it operates a subscription model and obviously wants more paying customers. 

"Our data is our business," says Simon Kent, managing director for Australia/New Zealand. 

It also doesn't share any data about agency spend for individual media owners, although that data is available to subscribers. But it does share some insights with the trade press. 

So, what did the SMI numbers for calendar year 2013 show?

  • TV: $430.7m
  • Digital: $143.8m
  • Newspapers: $101.0m
  • Radio: $69.2m
  • Mags: $42.9m
  • Outdoor: $68.2m
  • Cinema: $5.8m

Total media spend for the 2013 calendar year was $865.9 million, up $43 million or 5.2 percent from $822.8 million in 2012. 

By channel, cinema topped the growth rates, up 26.8 percent YOY ​to $5.8 million, while digital was close behind with 26.1 percent growth to $143.8 million, taking second spot.   

TV topped the table, up 2.4 percent to $430.7 million; radio had a good year, up 19.3 percent to $69.2 million; and outdoor was up 12.5 percent to $68.2 million. 

Newspapers were in third spot, down 9.6 percent to $101 million, and magazines were down 8.3 percent to $42.9 million. 

From a category perspective, telcos had a big year, with spend up $9.7 million or 21.3 percent in 2013. 

SMI doesn't collect data on the money spent direct with media owners (unlike Nielsen or the Advertising Standards Authority). It also doesn't collect ad spend data on direct or unaddressed mail. But Tristan Masters, SMI's director of analytics, says it doesn't purport to show the total advertising market. It is simply a snapshot to show where the major media agencies are spending their clients' money. For example, he says SMI data showed media agency spend hit $7.5 billion in Australia in 2013, up 2.4 percent. But some believe the total market there could be worth as much as $12 billion. 

"The data is 100 percent accurate [Master says the local agencies on its books use the same booking system, Pegasus] ... but there's a huge chunk of the market that we miss," Kent admits. 

Kent says it would never say no to the idea of media owners providing their direct spend to get a more accurate view of the market "if that was something they wanted us to do". 

As SMI only launched here last year, Kent says it has gone back five years to get historical spend data from the media agencies, and that data then needed to be harmonised.

He says SMI has been received well so far, with the company largely focusing on "bedding it down with the agencies", but it plans to be back in the New Zealand market early this year to sell it to media owners (at this stage APN and Fairfax are signed up as subscribers). 

Nielsen's AIS figures, which are based on ratecard spend, vary significantly from SMI's (and from the industry-supplied ASA figures). But Nielsen is currently in discussions with a range of media owners to come up with a way to make this data more accurate and it's believed it is trying to get media owners to provide a log that it has access to—similar to SMI—so that all revenue is captured. Its AIS data for 2013 showed a total media spend of $3.3 billion (compare this to SMI's $865.9 million or the ASA figures for 2012, which showed the total was $2.2 billion). This was up slightly on the total for $3.2 million in 2012. 

In the categories, passenger vehicles were on top in terms of total spend, with $162.8 million. And radio and television had the highest growth rate, with a 19 percent increase, just ahead of cellphones/mobile phones on 17. Discounters and warehouses were also in double figures, up 13 percent, while government was down ten percent. 

Jan 2013 - Dec 2013

Jan 2012 - Dec 2012

Growth

Passenger Vehicles

1

162,800,417

143,461,495

13

Supermarkets

2

148,731,604

149,288,733

*

Fast Food Chains, Restaurants & Cafes

3

112,684,643

115,902,704

-3

Banks

4

112,544,836

107,249,141

5

Discounters and Warehouses

5

110,433,039

97,670,017

13

Department Stores

6

104,177,637

100,055,657

4

Cellphones, Mobile Phones

7

96,411,939

82,434,746

17

Radio and Television

8

90,281,147

76,181,661

19

Home Improvement Retail

9

85,665,526

86,734,374

-1

Central Government Departments, Services

10

75,030,107

83,370,027

-10

MPA chair and Tangible publisher John Baker was fairly critical of SMI when it launched, saying direct spend was the elephant in the room—and the elephant was growing quickly (CAANZ chair Paul Head followed up with a piece on why SMI would fly). 

It is true that some media enjoy a much greater proportion—and growing—of direct advertising than others. Magazines are a case in point and these relationships often centre on ‘content’ partnerships rather than display advertising. However, this is an over-simplification as marketing dollars are progressively siphoned out of traditional media agencies by a growing community of sophisticated and interventionist marketers working with a range of specialist service providers, and media owners directly.

In this regard it seems to me that SMI’s most useful service will be to measure the long-term decline of traditional media agency share of wallet and prove that they are like polar bears clinging to their melting piece of ice. To claim, as SMI has, that the expenditure of 15 media agencies in New Zealand will provide a “comprehensive view of New Zealand’s advertising market” lacks credibility.

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