NZ online advertising hit $923m in 2017

It seems 2017 was a year when meat-and-potatoes online ad options like search and directories prospered, while trendier new options struggled.

The New Zealand online advertising market record grew by 7% to $923 million, according to a Staples Rodway report for the IAB Interactive Advertising Bureau (scroll down for infographic).

Again, online ad revenue was dominated by search (read: "Google"), which accounted for $541 million or 59% of all ad spending, up from 55% in 2016.

Google, which has traditionally booked most of its Ad Word revenue from New Zealand customers to subsidiaries in lower-tax Ireland or Singapore, recently made a (vaguely-worded) pledge to pay more tax in New Zealand.

Cynics will see the move as a PR ploy in the face of the inevitable as legislation to crack down on profit and revenue-shifting moves through Parliament.

The dominance of Google and the rise of Facebook is another slap in the face for NZME and Stuff (formerly Fairfax) whose proposed merger was turned down by a Commerce Commission more focused on the pair's dominance in print media.

Elsewhere in the IAB survey, spending on video ads grew from $31 million in 2016 to $34 million.

Local programmatic ad sales, which were made across various platforms, where much-hyped but revenue was actually static at $24 million (see 2016 figures here). 

Mobile grew from 5% in 2016 to 6% of total online ad spending, or 7% including tablets.

Classifieds and directories, which includes the likes of Seek and Trade Me, accounted for $181 million or 20% of online ad spending in 2017, compared to $155 million (17%) in 2016.

Social media slipped from 7% ($59 million) in 2016 to 6% ($51 million).

Advertising Standards Authority figures for 2016 put the total New Zealand advertising market at $2.6 billion, with online the largest single category.

Click to zoom.

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