NZ online ad spend up 22%

The Interactive Advertising Bureau says online ad spend was up sharply in the fourth quarter, and total internet spending for 2008 up a whopping 43% year-on-year to $193 million. But there’s a spike in the tail: spending in the fourth quarter was 3% down over the immediatlely proceeding period.

In PwC-audited figures released today, the IAB says “interactive” advertising (defined as display, classified, directory and search engine ads delivered over the internet) was up 22.64% in the final quarter of 2008 to $48.23 million.

For the same quarter last year, spending totalled $37.5 million.

The big “but”
If you look at fourth-quarter 2008 figures against the fourth-quarter of 2007, the picture is universally rosey, with ad spend increasing in all categories.

But stats from the more immediate past show a negative trend, with fourth-quarter 2008 figures all heading south compared to third-quarter 2008 numbers, falling 3.19% overall.

Though it may not be cratering compared to other media, online advertising is not proving immune to the recession.

IAB chief executive Greig Buckley focuses on the long trend, which paints the most positive picture.

“This is the first opportunity we have to compare two full years of spend data – 2007 and 2008. They show incredible 43% growth in interactive adspend over 2007, from $135.16m to $193.15m in 2008,” the IAB executive says.

Fastest-growing ad category
Mr Buckley says this result makes interactive advertising the fastest growing major medium in New Zealand.

With 2008’s online ad spending hitting $193 million, the internet is now ahead of outdoor, cinema and direct mail advertising, but still behind magazines ($275m), radio ($274m), TV ($654m) and newspaper ($826m) spend.

Search and directory grow fastest
In year-on-year terms, the IAB report says search and directories lead the way with growth of 75% to $59.71m from $34.15 million in 2007.

This represents 30.9% of all interactive spend, up from 25.3% in 2007, and approaching the share it has in more mature markets (such as Australia, on 47%).

Mr Buckley expects this trend to continue. It's good news for the likes of Google, Microsoft, Yahoo and Yellow.co.nz; less so for traditional publishers.

Display advertising grew 38% to $58.12 million from $42.06 million in 2007
2008.

"We expect marketers to allocate a greater share of their budgets to display, especially in rich media and video formats as technology advances make these formats more readily available and affordable," says Mr Buckley.

Classifieds grew 28% from $58.96 million in 2007 to $75.32 milllion in 2008, but the share of total spend dropped from 44% to 39% in 2008, again reflecting trends in other markets.

Mr Buckley says based on anecdotal evidence so far, he expects 2009 to be a tougher year. But the IAB executive told NBR that online is suffering less than other media, and he still expects growth "in the mid teens" for the full year.