Digital Overtakes TV to Become NZ’s Biggest Advertising Channel

New Zealand media history was made this month, with the release of the IAB and PwC’s, much anticipated, 2015 Interactive Advertising Spend Report.

After much speculation that the continued growth of NZ digital adspend would bring an end to TV’s long-held, reign as the biggest media channel, the question was settled with the release of the IAB/PWC report. The report released earlier this week, saw digital emerge as the new leader in the NZ adspend market, capturing over $800M spend in year. By contrast TV’s contribution was only $614M for the year ending 2014, which was down from $634M on the pervious year.

The steady march of digital adoption in NZ and the advertising dollars that have followed it, has been hard to ignore. The transition from a TV, to digitally-dominant advertising market adds New Zealand as the newest member of a fast growing list of industrialised and digitally-progressive counties that includes the US, Australia, Canada, the UK along with many other European players. It is currently estimated that digital will be the biggest ad medium in a third of global markets by 2017.

Digital Movers and Shakers

Within the digital advertising market, Search and Directories as a segment remains dominant with a 56% of the adspend and this sub-category grew at a rate of 31% in Q4 2015. Digital Display advertising account for 17% of the digital spending in Q4, with a 17% share of the digital category and growing at a rate of 7%. The remaining share was spread across Classifieds (16%), Social Media (6%), Mobile (5%) and Online Video (3%).

Mobile Adspend

In terms of growth rates, the Mobile advertising segment has seen an impressive increase. While still a relatively small segment by spend, Mobile advertising enjoyed 153% growth in Q4. New Zealand still lags behind many markets including the US, UK and Australia, in terms of the uptake on mobile advertising and the outlook for Mobile advertising growth in 2016 and 2017 looks very bright.

Social Media

While ad expenditure within the Social Media sub-category accounted for just over 5% of digital adspend in Q4 2015, the continued monetisation of many social media platforms and the growth in both the range and sophistication of social media advertising options have driven growth in the segment and this is a trend that is forecast to continue. NZ adspending in the social media category grew at a rate of 79% in Q4 2015.

Paid Search

Paid search programmes such as Google Adwords make up a largest segment of the digital adspend in NZ and the growth is set to continue a rate of 14% to 2017.

Outlook

With New Zealand advertisers looking increasingly comfortable to move their advertising budgets away from traditional media channels into digital, along with the fact that New Zealand digital adspend is forecast to grow a further 20% in 2017, it seems the gap between TV and Digital will only continue to grow.

Television will obviously continue to have a significant role to play moving forward and will continue to be a staple of media schedules for large, brand advertisers for years to come, but this ‘changing of the guard’ is a very significant waypoint and clearly signals the continued strength of digital media and marketing and its power to drive effective brand communications.

For a full presentation of the IAB/PWC Interactive Advertising Spend Report, please contact us.

Author Chethan C

More posts by Chethan C

Leave a Reply