Despite a significant reduction in Government category ad spending after the pandemic, the advertising market in New Zealand has managed to achieve a new milestone this financial year, reaching a record level of ad spend totaling $1.17 billion, which represents a 1.4 percent increase.
This was despite the market reporting another month of lower ad spend in March against the record March 2022 period, with total bookings back 8.6 percent. This decline was again mostly due to a significant fall in ad spend from the largest category of Government (-25 percent YOY in March) and when that is removed the underlying decline in NZ ad spend reduces to -6.2 percent.
In the March quarter, total bookings are back 7.2 percent but that’s also compared against a record level of ad spend in the March 2022 quarter.
SMI AU/NZ Managing Director Jane Ractliffe said the return of Government category ad spend to pre- Covid levels was abnormally impacting the market across all time frames.
“Government ad spend necessarily increased significantly during the Covid period given the amount of specific messaging required. But as it’s no longer needed we’re seeing a super sharp decline in Government ad spend which over the course of this financial year is down by 18 percent and that represents a loss of more than $26 million in ad revenue,” she says.
“And so when we remove Government category ad spend from the financial year total, the underlying market growth over the 12 months is actually an impressive 4.2 percent.’’
The lower March demand affected all the largest media, with linear TV ad spend back 16 percent and Outdoor revenues fell 4.7 percent but Digital did well to minimise its decline to 0.7 percent as Social Media ad spend bucked the downward trend with revenue growth of 8.7 percent.
But the smaller media of Magazines and Cinema continued to grow with their bookings up by 3 percent and 86.9 percent respectively.
For the financial year, Digital media revenues lifted 10.7 percent and Outdoor and Cinema both continued their Covid recovery, up 7 percent and 62.6 percent respectively.
And while Government reported the largest decline in demand among all the categories, across the year the Restaurant category delivered the largest growth (+25.2 percent), followed by the categories of Utilities/Fuel/ Energy (+24.2 percent), and Cosmetics/Toiletries (+17 percent).
More detail on the March ad spend trends can be found below.
