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Online ad spending up 9% to new high of $363m last year

Total internet (or "interactive" advertising spend in New Zealand for 2012 was $363.27 million up 9% from 2011 ($328.11 million).

IAB (Interactive Advertising Bureau) figures released today also show fourth quarter spendiing up 12% over the year-ago period, according to figures collected by PwC.

In 2011, internet advertisiing's $328 million haul was enough to push it ahead of radio ($247 million) and magazines ($209 million).

But internet ad spending trailled newspapers ($582 million) and TV ($618 million).

The Advertising Standards Authority is due to release its comparative figures for 2012 in the week beginning March 18.

Faster growth next year
“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%," IAB general manager Alisa Higgins says.

Online spending by category
Search and directory (including Google and Yellow) has always been dominant in IAB's figures, accounting for the largest share of NZ onine ad spending (and in Google's case seeing most of that revenue go offshore as it books most NZ ads through its Irish subsidiary to minimise tax).

Next largest is classified (including Trade Me and the likes of seek) followed by display (which takes in most traditional publishers).

The 2012 IAB report also includes a detailed breakdown of Q4 online expenditure. The biggest growth was seen by classifieds, up 22% followed by Dcisplay at 11% and search and directories up by 8%.

Year-on-year, mobile advertising saw huge growth - 155% in the fourth quarter and 176% for the full year as smartphones proliferated and mobile data plans got cheaper. However, the growth was from very low base to finish the year on $2.83 million.

Online video also grew in the fourth quarter, rising 28%, but again off a very low base.

Comments and questions

How much of total online advertising revenue is placed on traditional media websites?

Good point!

The IAB refused to break out dollar figures for each category.

In its last report that did include $ totals (for the third quarter of last year; here: http://www.nbr.co.nz/opinion/nz-online-ad-spend-increases-new-all-time-high), it had:

Search & directories (incl Google, Yellow): $37.1m
Classified (incl Trade Me classifieds, Seek etc): $29.21m
Display (most closely assoc with trad media websites): $27.63m

Within this there are shades of grey.

For example, Google and Trade Me snaffle some display revenue.

And Stuff and other Fairfax news sites now run Google Ad Words at the top of each story - which no doubt helps top up the pot, but Google ordinarily keeps the lion's share of revenue from ads that appear on partner sites.

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