IABNZ’s Internet Advertising Report: new methodology, desktop leads the way and mobile remains small

Interactive advertising revenue reached $431.1 million over the first half of 2017 according to the IABNZ’s revamped internet advertising report. It shows desktop leading the way while mobile is slow and steady.

The new report comes from a survey conducted by Staples Rodway and now offers a more comprehensive look at the impact of digital advertising on the media landscape.  

The report filters revenue by device-type, including mobile, desktop and tablet, as well as an ‘other’ category that captures revenue associated with smart TV apps, gaming consoles, wearables and so on.

And while the revenues of devices such as wearables are very small, IABNZ chief executive Adrian Pickstock says he expects those revenues to grow and is pleased that the organisation now has the ability to monitor that.

Further changes have seen those device categories broken down further into channels, including general display, video, audio, sponsorship, and native.

“We have much more transparency around the whole advertising ecosystem,” says Pickstock.

Another change has seen the programmatic advertising revenue figures sourced from Standard Media Index (SMI). The reported revenue reflects the value of actual placements as reported by Agency Trading Desk bookings and bookings onto independent demand-side platforms (DSPs).

However, what will not change are the reporting methodologies used for the collection of search and social media data. These are reported separately and are not included in the device and channel analysis.

It’s also important to note that given the change in collection and formatting methodologies, the new report cannot be compared to previous releases from the IAB. 

According to the report, interactive advertising reached 431.1 million dollars over the first half of the year and driving that was desktop.

Desktop received $129 million (30 percent of total) of display, classified and directories revenue served. This is compared to the mobile devices total of $27.9 million (6.5 percent of revenue) across smartphones, tablets and other mobile devices.

Pickstock says it expected to see a bigger revenue component around mobile advertising as the new reporting mechanism provides better insight, however, that’s not the case.

“Mobile has been tracking along at five percent of total revenue for a long, long time and we expected the new reporting mechanism to give us a better insight into the value of that platform and it hasn’t really,” he says.

“It’s up to six and a half percent total revenue so we’re a bit disappointed it wasn’t higher to highlight the opportunity around mobile in New Zealand.”

Meanwhile, smartphone revenue reached $22.7 million (five percent of total revenue). Compared with Australia, New Zealand smartphone revenue significantly lags where mobile currently grabs a 17 percent share of total Interactive revenue.

Across all devices, display advertising revenue landed at $67.8 million with general display advertising hitting $44.1 million (10 percent of revenue). Video remained buoyant generating $14.8 million over the period.

For the first time, the report has been able to isolate sponsorship and native advertising with the former reaching just short of the $2.7 million mark and the latter producing $6.3 million in the first six months of 2017. Native advertising is one of the fastest growing advertising sectors overseas and IABNZ says it will be fascinating to see how the category fares in the future in New Zealand.

Also included in the report is programmatic, which accounted for $46.8 million in the first half of the year. The figure equates to 69 percent of total display advertising and it places New Zealand’s performance in this area in line with overseas markets including the US, Australia and UK.

Pickstock says it’s the first time in New Zealand that revenue from the whole of the programmatic sector has been captured and it’s a pretty significant result. 

Reported separately in the report are search and social media, with the former reaching $250 million over the period while the latter generated $24.3 million. IABNZ believes with the report providing deeper insights into the detail of how interactive revenue in New Zealand is shared across devices and channels, it will be valuable to track performance trends across the spectrum in future reports.

After the first six months, the IABNZ expects full-year revenue to reach $996m by the end of 2017. 

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