Advertising spending slumps

Advertising spending slumped to its lowest level since 2004 last year according to figures just released by the Advertising Standards Authority.

Overall ad industry turnover was down 11.8 per cent in the year to December 2009 at $2.045 billion.

The ASA, which collates the revenue figures from media organisations yearly, shows advertising turnover first broke through the two-billion-dollar mark in 2004.

Advertising revenue for media companies slowed during a recession in which many companies trimmed back on marketing departments as one of the first belt tightening measures.

Every advertising channel has experienced a drop in revenue, apart from online which increased takings by 11 per cent, from $193m to $214m.

Newspapers still rule the roost, soaking up most advertising dollars, and suffered the biggest cutback in advertising spend - down $137m to $623m, though its market share dipped only 2.3 percent from last year.

Television advertising’s fell $77 million to $570m and its share of the spending remained steady from 2008, at 27.9 per cent.

However, the Newspaper Publishers Associations' (NPA) has called for a change in the way the figures are compiled to give a fairer comparison between newspapers and their rival media.

The headline fall in advertising revenue for newspapers is 18 per cent – but that includes the lucrative classified adverts also, those traditionally in the back sections of papers and not run on television or radio.

“They [the raw figures] are just not apples with apples,” said NPA president Michael Muir.

Backing the classified ads out of the mix, the fall in dollars was halved to nine per cent.

That compares to the drop in television and radio of 12 per cent each.

Muir said the newspaper industry was talking with the ASA and reviewing what figures to release in future.

Away from the skirmish over finessing figures though, the online s advertising industry was happy.

Interactive’s share grew by 1.8 per cent in 2009 slightly down on the 2.5 per cent growth rate it enjoyed from 2007 to 2008.

Interactive Advertising Bureau New Zealand chairman Michael Gregg said  2009’s growth could be viewed as modest compared to previous years, but it had demonstrated marketers’ confidence in online as a medium that delivered results at a time when budgets were being cut in other media.

"This clear structural shift to prudent, results-based online advertising is anticipated to accelerate in 2010 with IAB and its members striving to provide return on investment driven campaigns no matter what the channel,” Gregg said.

Meanwhile, mailed advertising has showed modest growth with addressed mail in particular soaking up 2.6 per cent of spending, up from 2.4 per cent last year and 1.5 per cent in 2007.

Cinema advertising revenue has fallen 33 per cent to attract only a 0.3 per cent share of the advertising spend, or $6m in the entire year.

- © Fairfax NZ News