The numbers have been crunched by the Advertising Standards Authority and an overall advertising revenue increase of $92 million for 2010 is welcome news for an industry that has grown accustomed to big declines over the past few years. Download the pdf here. media_turnover_with_explanatory_notes_2010 final
Overall, the total advertising market was up to $2.137 billion from $2.045 billion last year. And while it's still well off the $2.3 billion recorded in 2008, it's a much-needed (and widely predicted) positive shift after 2009's $272 million overall decrease in revenue.
In terms of share, most sectors stayed more or less where they were compared to the year before, aside from television and online, which both reported big increases.
Newspapers once again retained their position as the number one advertising medium in the country, despite recording a small increase of $4 million in revenue from 2009. Total newspaper ad turnover in 2010 was $627 million, $20 million more than television. But when you consider it's down from a peak of $830 million in 2005, the industry will cherish those small increases.
Television ad spend increased by $37 million to $607 million in 2010, although it's also well off its peak of $666 million in 2005. But the gap at the top is certainly closing.
Perhaps of most interest in this round of industry figures is that interactive has moved through the pack to take third position, overtaking radio and magazines (which both lost share) for the first time. Online advertising grew by more than 26 percent last year, lifting its share of the total market to over 12 percent for 2010.
Internationally, New Zealand now sits in the same position as Australia where latest figures place online advertising third in terms of share of advertising dollars, behind newspapers and television.
Michael Gregg, managing partner of the local arm of global digital ad agency, VML Inc and the man who oversaw the IAB during the post-recessionary push, says factoring in Facebook advertising gave online display advertising a late lift in the fourth quarter of 2010, but diverting the rivers of Classified gold from Newspapers and the surge of Search advertising meant it was only a matter of time before online passed radio and magazine revenues. In fact, he predicted this change in the local advertising pecking order twelve months ago.
“During the recession, digital’s accountability put online at the top of clients’ media schedules. This didn’t change after the GFC, as ad agencies tried to prove to clients that they understand this medium and could adapt from the 30 sec TVC era. Integrated campaigns driving traffic online from offline media are now increasingly sophisticated, and the practice of segmenting by micro-markets, building multiple conversations and communities is better understood by more marketers. The challenge remains for online to prove the medium as a brand vehicle, not just a sales channel. Continued demonstration of its power to build global brands will shift more spend off print and TV.”
Liz Fraser, IABNZ chair, says reaching the number three position a year ahead of their own expectations could be considered a historic milestone for New Zealand’s digital sector.But she reckons excitement should be contained for future reports and doesn't think 25 percent growth in 2011 is out of the question.
"The vibrations in agency land are good and strong and as they continue to bring new creative approaches to what is still a nascent medium, then we can reasonably expect additional quantum growth," she says. "On other fronts we see continued growth of performance (cost-per-click) advertising. Video advertising – massive in other markets – is beginning to take a foothold, and the introduction of AdExchanges will substantially change the way our medium is transacted. Scope for innovation is endless."
With the internet soaking up around
82 22 percent of our media consumption time in New Zealand, the second highest after TV, the IAB's Alisa Higgins says Kiwis are now spending more of their waking hours interacting with media than any other activity, including eating, working and sleeping. Two thirds of total media is consumed through our monitors and screens. And this only stands to intensify as devices such as smartphones and tablets become more ubiquitous, she says.
But the looming dread of the digital world doesn't appear to be scaring the print sector too much. And because the ad revenue brought in by the online versions of newspapers is counted in the interactive department, the overall position of print media owners is probably stronger than the figures indicate. It's certainly safe to say that reports of print's death have indeed been greatly exaggerated.
“Circulation and readership is generally stable and when you add newspapers’ online audiences, the reach is greater than ever, providing compelling audiences for the promotion of goods and services," says Newspaper Publishers Association president Michael Muir. "Our newspaper brands also dominate the online space.”
Chief executive of the NPA Tim Pankhurst says the fact newspapers have been able to grow in a tough year indicates the print to online move has been successful.
“The difference is huge between newspapers today compared to 10 years ago. The quality and production is better, inserts are better, there’s continual change in everything.” Pankhurst says.
So why are the papers still holding on to top spot?
“Our reach, our circs and our readership aren’t as high as they were, but there is still really good penetration. There are 1.6 million people per day reading a daily paper, and that gives confidence to advertisers. Last year was a tough year for all sectors. It may be a surprise to a lot of people that newspapers are the number one medium in terms of ad dollars. Most papers have retained strength in national retail advertising. It changes from paper to paper and daily to community but there have been more missing out of classifieds than anything.”