NZ Online Advertising Growth Nudges 20 Percent

( The Interactive Advertising Bureau of New Zealand (IABNZ) and PricewaterhouseCoopers (PwC) have released online advertising expenditure figures for Q2, 2010.
The growth of New Zealand’s online advertising market continues unabated, with the most recent April-June 2010 quarter totalling to $62.58m, up $7.26m on the Q1, 2010 result.

Michael Gregg, IABNZ Chairman says, “The online sector has transitioned from an emergent advertising choice to a mandatory mainstream medium. With $62.58m of advertising spend entrusted with publishers and search companies in the April-June quarter, the industry has reached new maturity and is collectively focused on delivering strong traffic results, powerful branding opportunities and consistent measurement practices.”

For the first time ever, Display overtook Classifieds (by a sliver of $270k) with a massive 25.84% year-on-year increase. The April-June 2010 quarter has seen the highest increase in the last six months, at 19.23% year-on-year for the same quarter, proving solid growth in the total online advertising market. The average total year-on-year increase for the last four quarters is 15.06%, well over what some were predicting.

Liz Fraser, IABNZ Vice-Chairman, says the results exceed predictions. “We are all smiling. You cannot complain about growth, particularly when other media have struggled. But, frankly, for digital, anything under double digits would have been disappointing, when you consider the upswing in business confidence this year – never mind the spending flurries that often precede June end-of-year close off. So there is a lot stacked in our favour.”

The star performer was Display, which increased 38.11% from Q1 this year and 25.84% from Q2, 2009. The result deviates from international trends, where paid search advertising, social media and mobile are the catalysts of growth.

“It is great to see online ad spend growth is happening worldwide. ZenithOptimedia has revised its total ad spend forecast yet again and now say online will rise 13.1% this year. So, we are certainly doing our bit to support the prediction,” adds Alisa Higgins, IAB Marketing Manager.

Search & Directories totalled $21.65m – up 8.69% from Q1, 2010 – while over the same period Classifieds remained flat, though recording 19.18% year-on-year growth. Fraser says IABNZ expects to see an improvement next quarter, in line with the global macroeconomic recovery and renewed confidence in the employment market.

The Display category saw an interesting reverse in fortune for two of the previously leading categories showing a decrease: Travel and Accommodation and Leisure, Entertainment and Media. However, sectors, like Telecommunications bounced back showing a massive increase in proportion of spend to the Display total compared to last quarter of 32.69% and Government departments, services and communities taking the lead spot with 14.67% of the total Q2, 2010 Display spend.

PricewaterhouseCoopers partner Chris Perree says: “Online advertising spend is steaming along, picking up momentum as each quarter progresses. We continue to report positive trends in the online advertising market in New Zealand. Contrasting total spend of each category to prior year reported figures highlights greater investment in the online advertising medium, in particular Display advertising. We should keep an eye out on how the market spend in each category evolves going forward to see if New Zealand trends towards similar proportions noted in more mature jurisdictions overseas.”

Media Release 26 August 2010 from Interactive Advertising Bureau NZ.