According to the 2013 ad spend figures from the ASA, the money spent on advertising increased year-on-year from $2.164 billion in 2012 to $2.274 billion last year. And with this growth came a continuation of key trends that have taken shape over the last few years.
In terms of overall ad spend figures, television remained the top dog, with year-on-year figures that grew from $614 million to $634 million. But while this growth came as good news for the TV industry, it coincided with a dip (from 28.4 percent to 27.9 percent) in the channel's percentage-based contribution to the nation's ad spend.
As was the case last year, newspapers were hit hardest, this time with a year-on-year drop from $540 million to $494 million.
Despite this sharp drop, a release from the Newspaper Publishers' Association focused on the fact that "newspapers remained one of the top two choices for marketers placing advertising spend in 2013."
The release also pointed out that the ASA's figures for newspapers do not include digital platforms, which have generated "significant revenue" for newspaper brands over the last year.
“Consumers now have the choice to get their news in paper, on their PC, mobile or tablet device at home, at work or on the go, providing advertisers the opportunity to connect and engage with people in a variety of ways,” said the Newspaper Publishers' Association chairman Michael Muir.
Jeremy O’Brien, TVNZ’s head of sales and marketing, concurred with these sentiments and said that he didn't view the growth of interactive as a bad thing.
“From an ad perspective, the numbers reflect the exciting developments that have taken place in the digital area. It’s certainly been our experience that as more of us Kiwis are watching online, there’s been corresponding revenue growth,” he said.
"The ASA figures show the strong support advertisers are putting towards TV and digital, where the biggest audiences are found. It’s a vote of confidence that we gratefully acknowledge."
Given that the interactive section enjoyed the steepest year-on-year growth in terms of money spent ($366 million to $471 million) and percentage-based contribution (16.9 to 20.7 percent), it does seem to indicate that marketers are transferring their expenditure from traditional to online channels. And if the current trends are maintained through 2014, then by next year interactive should overtake newspapers and thereby become the second—or possibly first—biggest contributor to the industry.
Interestingly, the shift to digital has not impacted magazine ad spend figures in the same way. Money spent on advertising in magazines increased from $210 million to $211 million. And while this coincided with an industry contribution drop from 9.7 to 9.3 percent, Magazine Publishers' Association chair John Baker says he is satisfied with the result.
"We are very pleased with the numbers. Although market share is down, dollars are up. And this is particularly promising considering that NIMs [newspaper inserted magazines] are no longer being included in the figures for magazines," said Baker. (NIMS are now being included under the newspaper section).
These figures serve to indicate a trend of stability in terms of magazine ad spend over the last three years. Since 2011, the magazine section has grown consistently by one million dollars a year, and Baker attributes this growth to the fact that "two years ago, the MPA set out an agenda to focus on the unique benefits of magazines."
This view was recently echoed by Bauer chief executive Paul Dykzeul in his closing address at Magazine Publishers' Association Sales Conference held on 20 February.
"The magazine industry is in pretty good shape, which is a terrific thing for us going forward ... [and] what the MPA is trying to do is up the profile of what magazines do," he said.
Dykzeul explained that one of the key differences between the magazine and newspaper industries was that magazine publishers were not giving their content away for free.
"There is still an inordinate number of people who go out ever day and buy our magazines. They are prepared to pay for our content, and that's why it remains really important not to give it away. We need to hang onto that," said Dykzeul.
Baker believes that these observations when viewed in conjunction with the ad spend figures make it important not to lump together magazines and newspapers under the print category, because these two discrete industries are adopting very different strategies when it comes to integrating into an increasingly digitised world.
Apart from newspapers, the only other sector to register a decrease in ad spend figures was unaddressed mail, which dipped from $54 million to $53 million. Conversely, addressed mail continued its upward trajectory by growing from $58 million to $60 million.
The growth in the addressed mail sector over the last could be attributed to the proliferation of technology, which now makes it possible to collect vast quantities of data and then use that information to send personalised messages to the target market.
"The ASA figures report year-on-year growth in the addressed mail category. This reflects the fact that direct mail remains a core pillar in marketing strategies, due to it's ability to deliver relevant communications to well-targeted customers and prospects. With the continued growth in big data we believe that data driven communication strategies will continue to evolve, and that direct mail is a natural complement to marketing strategies utilising digital channels," said Sohail Choudhry, the executive general manager of customer sales marketing and strategy at NZ Post.
Ant Rainger, the managing partner of Rainger and Rolfe, said that this was great news for those involved with direct mail and added that this, when viewed in light of growth in the digital sector, indicates that businesses are becoming more interested in personalised forms of communication with consumers.
The remaining three categories, namely cinema, outdoor and radio, enjoyed year-on-year growth and also increased their percentage-based contributions. Radio ad spend increased from $248 million in 2012 to $267 million in 2013 (which equated to a jump from 11.5 to 11.7 percent), advertising spent in cinema increased from $7 million in 2012 to $8 million in 2013 (0.3 to 0.4 percent of total ad spend) and money spent on outdoor advertising increased from $67 million to $76 million (3.1 to 3.3 percent).
“This performance is in-line with the growth in OMANZ member revenue for 2013, released in January this year. It’s clear that outdoor is benefiting from the re-direction of advertising dollars away from TV and newspapers, as well as the continued meteoric rise of interactive," said OMANZ general manager Adam McGregor.
The release from OMANZ also said that the organsation aims to eventually attain a five percent market share in New Zealand.
Belinda Mulgrew, the chief executive of MediaWorks Radio also expressed optimism about the growth recorded in terms of radio ad spend.
“We’re very pleased with the continued aggressive growth of radio in a cluttered media environment. Being able to deliver effective integrated solutions to a loyal audience has contributed to significant growth in the branded content sector," she says.
"By continuing to develop initiatives that connect with new and existing audiences we will continue to deliver big numbers on big brands for our listeners, clients and shareholders, whether on-air, face-to-face, within apps or online”.