Ad market still below pre-crisis levels

WILLIAM MACE
Last updated 16:17 20/03/2013

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Spending on advertising in New Zealand dropped last year for the first time since the bottom fell out of the market in 2009.

Figures released by the Advertising Standards Authority today showed overall turnover in the advertising industry fell 0.7 per cent to $2.164 billion in 2012, from $2.179b in 2011.

The declines came in the newspaper, television and outdoor advertising categories which fell 7.2 per cent, 0.6 per cent and 19 per cent respectively.

Outdoor Media Association of New Zealand chairman Wayne Chapman said the 0.7 percentage point decline in market share for outdoor advertising was not unexpected.

Chapman said the sector's revenues had been bumped up during the Rugby World Cup period in 2011 but had suffered in the subsequent spending malaise after the tournament.

He said revenues had begun to recover in the final quarter of 2012 and into January this year.

Meanwhile interactive advertising, which includes internet display ads, online directories and search engine advertising, continued to grow - reaching $366m worth of spending and around 16.9 per cent of the advertising market share.

Television's share of the market was steady at 28.4 per cent while newspapers' share dropped from 26.7 per cent to 24.9 per cent.

The size of the advertising market has still not recovered to pre-global financial crisis levels of above $2.3b.

The Interactive Advertising Bureau of New Zealand said it predicted interactive advertising's share to increase to 19 per cent by the end of this calendar year.

Interactive advertising has grown at an average annual rate of over 60 per cent in the past nine years, including an 11.5 per cent increase in revenue in 2012.

IAB general manager Alisa Higgins said 2012 was a tough year for all media "with everyone feeling the pinch".

"However this shows that more and more advertisers are turning to interactive advertising as it continues to prove its effectiveness in delivering cost efficient return on investment," she said.

Radio advertising revenue increased from $247m to $248m, magazine revenue increased from $209m to $210, addressed mail rose by $8m to $58m and unaddressed mail dropped slightly to $54m.

Cinema advertising was stable on $7m, or 0.3 per cent of the market.

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- © Fairfax NZ News

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