What’s On

Online video, interactive, mobile advertising growing in NZ

With the growth of smartphones and tablets in the country, brands in New Zealand are steadily looking at other options of advertising besides the traditional formats. The gainers in this are mobile medium, online video and interactive advertising. The brands in the country today see these three as the most relevant modes of advertising to get closer to the consumers. This was recently was revealed in the IABNZ/PwC Insight report released by IAB New Zealand.

“The sixth year of the IAB/PwC Insight report confirms the on-going growth of the c market in New Zealand. Total online advertising expenditure of $363m in 2012 represents a 169 percent 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,” said Chris Perree, partner at PwC.

The growth in online advertising is because more people are spending more time online. In fact the online expenditure grew by 12 percent year on year. The biggest growth was seen by Classifieds, up 22 percent followed by Display at 11 percent and Search and Directories up by 8 percent. “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 percent 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,” informed Perree.

It shows that the businesses are embracing the ability and ease to increase exposure to their target audiences through the digital marketing channel. Today they have more options available to them. The brands are getting more innovative than ever with social media, online video and mobile devices.

With the increasing use of smartphones and tablets amongst the consumers in New Zealand, it’s no surprise that mobile advertising achieved the fastest growth in 2012. “The year-on-year growth in Q4 of 155 percent and annual growth of 176 percent 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,” explained Mark Copplestone, head of sales, InMobi and chair of IABNZ Mobile Advertising Council. This trend is expected to continue in 2013 now that smartphone penetration has reached 50 percent tipping point in New Zealand.

Online video advertising is also saw growth which was 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 percent 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,” said John-Paul Randall, digital media sales manager, TVNZ and IABNZ vice-chair.

Similarly, interactive advertising was also on the growth path, with the total spend in the country for 2012 was $363.27 million. This was up by 9 percent from $328.11m in 2011. “For 2013 we are forecasting an increase of 11 percent for the total market, erring on the conservative side compared to global predictions by ZenithOptimedia that interactive advertising will grow by 14.6 percent in 2013, while traditional media only increases by 1.7 percent,” said Alisa Higgins, General Manager, IABNZ.

Going forward, IABNZ estimates that industry growth in 2013 will come largely from Paid Search and Display, which includes rich media, online video and social media. “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,”  Perree added.