IAB NZ: PwC Online Advertising Expenditure Report - Quarter ended December and full Calendar Year 2012
IAB Members can access the full report in the "Downloads" section below
Total interactive advertising spend in New Zealand for 2012 was $363.27 million up 9% from 2011 ($328.11m) and up by 12% from Q4, 2011. This is one of the key findings from the sixth year of IABNZ/PwC Insight report released to IABNZ members today.
The report was established in 2007 and is the pre-eminent source of New Zealand online advertising spend provided by advertising agencies and direct customers. In 2012, reporting of mobile, video, Facebook and email revenue was added. In 2013, the report will expand again, this time to capture spend facilitated across demand side platforms (DSPs), predominantly used by advertising agencies.
"Our new report will be the most comprehensive and accurate source of interactive advertising spend available in New Zealand. Covering all channels and including direct advertisers which is crucial in a country dominated by SME businesses. We believe it will provide the most accurate and full picture of ad spend trends in New Zealand. Look out for the new report at the end of Q1." said Laura Maxwell-Hansen, General Manager Yahoo!NZ and Chairperson IABNZ.
The 2012 report also includes a detailed breakdown of Q4 online expenditure which grew 12% year-on-year. The biggest growth was seen by Classifieds, up 22% followed by Display at 11% and Search and Directories up by 8%.
"For 2013 we are forecasting an increase of 11% for the total market, erring on the conservative side compared to global predictions by ZenithOptimedia that interactive advertising will grow by 14.6% in 2013, while traditional media only increases by 1.7% ." said Alisa Higgins, General Manager, IABNZ.
It's no surprise Mobile advertising achieved the fastest growth in 2012 and this will continue in 2013 now that smartphone penetration has reached 50% tipping point in New Zealand.
"The year-on-year growth in Q4 of 155% and annual growth of 176% demonstrates that advertisers and marketers are starting to recognise the importance of integrating mobile into their marketing strategies. With over 50% of New Zealand consumers owning a smartphone, and tablets increasingly impacting screen time, we will continue to see hockey stick growth through 2013 as New Zealand starts to fall in line with international markets." Mark Copplestone, Head of Sales, InMobi and Chair of IABNZ Mobile Advertising Council.
Online video advertising is also experiencing growth which comes as no surprise considering three out of four online users in New Zealand watch online video.
"As anticipated, Online Video revenue decreased by a small degree for Q4, 2012 on the previous quarter. We saw this same seasonal trend last year due to smaller user numbers during the holiday period. The year on year revenue growth of 28% for Q4, 2012 is not surprising with the continued audience growth reflecting similar results. 2013 will see further increases in both audiences and the consumption of online video especially via mobile and tablet devices." John-Paul Randall, Digital Media Sales Manager, TVNZ and IABNZ Vice-Chair.
IABNZ estimates that industry growth in 2013 will come largely from Paid Search and Display, which includes rich media, online video and social media.
"The sixth year of the IAB/PwC Insight report confirms the ongoing growth of the digital advertising market in New Zealand. Total online advertising expenditure of $363m in 2012 represents a 169% increase on the total spend of $135m reported back in 2007. The growth in online advertising shows no signs of stopping, with all channels in 2012 experiencing year-on-year growth. This also includes mobile advertising, with advertisers and marketers embracing mobile devices as a marketing channel.
For the first time, the annual spend for each channel exceeded $100m, with Q4 achieving the largest quarter of online spend to date. Search and Directories continues as the channel leader with a 39% share of the total online spend in 2012. Classified advertising provided the strongest annual growth, increasing by 20% on 2011. In Q4 2012, Display and Search and Directories also experienced their largest quarter of spend to date. The online market continues to grow and capture a greater share of the advertising budget.
With online advertising being an effective advertising medium and people spending more time online, businesses are embracing the ability and ease to increase exposure to their target audiences through the digital marketing channel. The options available for more creative products and functionality are being fuelled by the rising innovative use of social media, online video and mobile devices.
With the continuing sustainable growth of the online market in New Zealand, the changing dynamics of the market and the different ways in which people are interacting with their mobile devices, there are strong foundations for another amazing year ahead in online advertising." Chris Perree, Partner, PwC.