NZ online advertising expenditure up 16% in Q2, mobile ad spend increases by 156% year-on-year

Total NZ online advertising spend in Q2, 2012 was $91.42m up 16.15% from Q1, 2012, according to the latest figures from IAB New Zealand, released this morning.

All channels showed positive growth from the last quarter with Search & Directories up 14.80%; Display up 28.48% and Classifieds growing 6.87%.

Says Alisa Higgins, general manager IAB New Zealand: “Online adverting spend is well on its way to reach the $400 million mark at the end of this year. We are seeing considerable growth in mobile expenditure with the first half of 2012 delivering the total amount spent in 2011.”

Says Liz Fraser, IABNZ chair & general manager MSN New Zealand: “Growth levels for total market in Q2 2012 have slowed to 7.11% year-on-year, which is on par to Q1 and Q2 back in 2009. Search saw a decrease of 2.34%, due to the Google Display Network revenue figures moving from this category into Display, which began in Q1 of 2012. Display however, only increased 8.39% year-on-year. What we didn’t see was the usual rush from advertisers to spend marketing dollars at the end of many financial years. Leading up to the end of June, often marketers have a bit of loose change that they want to offload, however my belief is that cost savings in businesses were found well before the start of Q2. The outstanding performing category was once again Classifieds with 19.8% year-on-year growth for Q2, a total of $27.82m. This is now two consecutive quarters for the Classifieds category to see such high growth.”

Within Display spending, Travel and Accommodation bounced back from last year’s drop in Q2 to lead with 14% growth.

Says Laura Maxwell-Hansen, general manager, Yahoo!New Zealand and IABNZ vice chair: “What a turnaround in category advertising spend this quarter! The category spend is very reflective of both the macro influence of the economic climate and the micro influence of the change in consumer behaviour. Kiwis’ are becoming more comfortable with online purchasing but also very selective about where they spend their disposable income. As such, advertising spend from the Leisure and Entertainment category has dropped to just over 6% of advertising spend, compared to over 10% in Q2 2011. Government and Investment/Finance/Banking sectors both showed declines from this period last year. But the use of online to research and purchase holidays has been recognised by the Travel sector. Travel advertising spend in display inventory was the top category in Q2, with online campaigns targeting the Kiwi want for a mid-winter escape to the sun or the snow, or maybe the Olympics!”

Says Bridget Gallen, mCommerce manager, Vodafone: “This is a significant sign of growth for the Mobile Advertising Industry in NZ. While the addition of search in this first half year number has clearly provided a boost to the spend figure as well as providing a more accurate reflection of true Mobile Advertising spend, a 156.41% normalised growth figure is a considerable level of growth for the industry. It is likely this growth is contributable to the increase in specialist Mobile Media companies new to the NZ market, a rapid rise in smartphone penetration (now around 40% and expected to be over 50% by year end), and a rise in NZ based Apps and publisher sites, making mobile a more attractive media channel to marketers. While Mobile Ad spend in NZ is well below what it is in other markets, we anticipate that this recent growth should continue as it has in these other markets where mobile is now a significant proportion of the overall digital media spend. Spend in NZ has been less than 1% of Online, but in the UK and US is more than 4% and expected to rise to 15% in the next few years.”

Says Chris Perree, Partner, PwC: “New Zealand’s online advertising continues to grow with this quarter experiencing total spend exceeding $91m, the highest level of quarterly spend since we first reported online advertising expenditure back in 2007. The total Q2 spend represents a 16% increase on Q1 2012. Consecutive quarterly year-on-year increases for Display and Classified supports the continued investment, with this quarter’s growth at 8% and 20% respectively. In Australia, Display and Classified achieved year on year growth for Q2 of 15% and 11% respectively.

“Advertisers continue to follow consumers online and are experiencing the value of having an online presence in their respective channels to deliver messages to targeted audiences. Social media and mobile channels continue to attract online advertising and demonstrate the growth potential in mobile advertising.”