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New Zealand's Online Advertising Spend Disrupts Market

29 Nov 2017

In 2012, we talked about the snowballing online advertising spend as detailed in an IABNZ/PwC Insight report. It highlighted a 24.16% year-on-year increase in spend from $257.46m in 2010 to $328.11m in 2011. In Internet terms, 2011 was aeons ago and there’s no question digital is now where it’s at for modern marketing. So, care to guess how these numbers compare to the online ad spend in 2017?

Unless you’ve been hiding under a rock (where there’s no data signal), you probably guessed more modern figures would dwarf those recorded in 2011, and you’d be right. Online ad spend in the first half of 2017 alone was $431.1m, which would suggest an annual expenditure of well over double 2011.

Which devices are seeing the highest spend?

The digital marketing landscape has changed so much since the start of the decade that IABNZ have changed the format of their online ad spend report to filter revenue by device and then channel. The reworking of the quarterly report, now conducted independently by Staples Rodway, offers greater insight into where businesses are spending their online advertising dollars, and perhaps where others should look to start their digital campaigns.

Despite much of the world now performing more searches on mobile than desktop, it was still desktop that took the king share of classified, directories and display ad revenue here in NZ for the first half of 2017. The rocksteady platform accounted for 30% ($129m) of revenue across the three channels, while mobile devices took 6.5%, or $27.9m.  

Which channel should we be watching?

A summary of the 2016 Digital Mix % Share shows that Online Search (dominated in New Zealand by Google AdWords) sees the largest spend of digital channels, reinforcing what we’re seeing at the agency level. The days of an AdWords campaign being a bolt-on or ‘nice to have’ are gone. It’s quickly becoming a necessity if guaranteed visibility in search engine results is the goal.

Is television dead? Is digital marketing the be-all and end-all?

While the IABNZ report concentrates solely on interactive advertising figures, the Advertising Standards Authority (ASA) release advertising revenue figures for all outlets (including radio, TV, print etc), and they confirm that the rise in online ad spend equates to a booming market share.

Their 2016 numbers show digital indeed ahead of the pack, boasting 34.6% ($891m) of the $2.572b total annual advertising spend. This is compared to television, the closest competitor at 22.6% ($580m), showing a healthy increase on the 31.2% ($801m) share reported in 2015.

Digital marketing has become so intrinsic across all outlets that the ASA have also had to change the way they report ad revenue, with the above numbers being split into Digital Only and Digital Other categories. Digital Other represents (2016) revenue created via online properties owned by television, magazine, newspaper and radio entities (e.g. Newshub.co.nz, NZherald.co.nz, Stuff.co.nz).

Source: Advertising Standards Authority (ASA)

What does the future hold?

As the new year draws closer, IABNZ expects total annual revenue for 2017 to come to $996m. Combine this with the ASA splitting TV, newspaper and radio ad revenue into general and digital categories, and it’s clear that digital marketing is not an optional extra for modern businesses – it’s a necessity, and if you’re looking for somewhere to start a highly targeted and measurable Google AdWords campaign might well be your best bet in the current digital marketing environment.


Written by
Mark is our Digital Marketing Manager and has worked in the online marketing space since 2005. Before joining us he plied his trade in various traditional marketing roles abroad and in New Zealand, yet nowadays much prefers the highly measurable and transparent nature of online marketing.

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