Interactive advertising sees another year of growth during a year of decline for the ad industry

Interactive advertising saw the largest dollar figure growth of all measured categories according to the Advertising Standards Authority’s 2012 annual turnover report.

Of the $2.164 billion spent on advertising last year, interactive accounted for 17 percent and totalled $366 million. Only a decade ago online advertising only accounted for 0.4 percent of ad spend, equating to $8 million.

This is the second highest percentage year-on-year growth for 2012, after addressed mail which grew by 16 percent. TV is still king in terms of overall ad spend, bringing in $614 million last year. The entire ad industry shrunk by 0.7 percent or around $15 million, according to the ASA.

Source: IABNZ

The figures for the last three years shows interactive’s growth in 2012 was significantly less than the previous two. In 2010 there was a 20.1 percent growth (to $257 million) and 2011 saw a whopping 27.6 percent growth (to $328 million). It’s likely the drop off was caused by a decreased ad spend across the board following the Rugby World Cup.

The Interactive Advertising Bureau provides the data used by the ASA in its turnover report. IABNZ says it expects interactive ads to account for 19 percent of all ad spend in 2013.

IABNZ general manager Alisa Higgins says “it was a tough year for all media with everyone feeling the pinch however this shows that more and more advertisers are turning to interactive advertising as it continues to prove its effectiveness in delivering cost efficient return on investment.”

Laura Maxwell-Hansen, general manager of Yahoo NZ says this latest result reflects recent Roy Morgan figures which show that “in total the internet accounts for 27 percent of our time spent with any media each week. This is up from 17 percent in 2007 while TV, newspapers and magazines have all declined.” 

No doubt a large chunk of interactive advertising is spent on newspaper websites (although according to Pew in the states, newspapers now lose $16 for every $1 they make in digital ad spend). Neither IABNZ nor newspaper industry body Newsworks is able to break down interactive advertising spent on newspaper sites.

“We don’t report by URL, our focus is to report interactive trends around channels like display (video, rich media), search & directories, mobile and classifieds,” says Higgins. 

“Interactive is showing a big increase and we know that newspaper brand interactive is likely to be a significant part of that. We have the two biggest news sites in the country and Trade Me for starters,” says Newsworks director Jenny Stiles. “I understand that the way the spend is reported to the IAB is by company not by activity so it would be hard to break it down in a more refined way.”

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