TV set to topple newspapers after charting two percent ad revenue rise

If you believe the digital doomsayers, free-to-air TV is currently experiencing death by a thousand cuts. But in New Zealand, it seems as though TV is slowly clawing its way back to the good old days after data released by industry body ThinkTV showed a two percent or $11 million rise in total ad revenue to $618 million for 2011, up from $607 million in 2010 and $569 million in 2009.

The figures are based on 2011 ad revenue from TVNZ, MediaWorks TV and Sky (including Prime) and, while the increase isn’t as significant as the seven percent year on year increase seen in 2010, it is heading in the direction of 2007 levels, when total TV revenue peaked at $654 million for the year.

ThinkTV’s chief executive Rick Friesen says the industry is very happy with the results, especially considering the uncertain economic climate and the huge array of media choices now available. He says TV was almost on par with newspapers in terms of revenue last year and, although newspapers have yet to release their figures, the consistent downward trend it has seen over the past few years means he can’t see anything to suggest that would have turned around in 2011, so he’s picking TV will soon top the list as New Zealand’s most-used media channel.

“The continued growth shows the unparalleled position of free-to-air television in the advertising market,” he says  (although Sky’s very well-subscribed pay TV model that also features advertising puts New Zealand in a slightly unique position). “International research shows television is still the best and most cost effective medium for maximising an advertiser’s reach. With confidence building in the New Zealand economy and new, innovative ways to integrate television across the plethora of media platforms today, advertisers are cleverly using television to better meet their brands’ needs.”

Friesen says increased marketing investment and confidence in television by major banks, retailers and car manufacturers was a major factor in the growth. And while the outdoor sector felt the positive effects of the RWC, he says it only gave broadcasters a small boost. The election didn’t have much of an effect either: while additional political cash is spent on TV, the ledger usually balances out because brands tend to stay away until it’s all over.

Given some brands may have kept their powder dry in 2011, Friesen is confident there will be more growth this year. But it is a nervous time at the moment, with many in the business sector waiting to see what happens in Europe. In New Zealand, however, he says there are signs of slow and steady growth this year and if the consumers are spending then the advertisers are advertising, which bodes well for the broadcasters.


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