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Online ad spend moves ahead of radio, magazines


New media share and spending figures from the IAB and ASA show online relentelessly gaining ground.

Charlotte Woodfield
Thu, 17 Mar 2011

Thanks to consumer habits - and consumer tracking - the online advertising market share was the third largest in 2010.

Since 2009, the sector has passed radio and magazine advertising. It showed the most growith among advertising sectors – from 10.5 to 12%. Others lost market share or increased less than online.

The total advertising spend last year was $2.1 billion, up on $2.04 billion for the previous year.  Online advertising accounted for $257 million of the total spend.

Online is still significantly behind newspapers and TV, who had 29.3% and 28.4% of the market share respectively.

Internet Advertising Bureau New Zealand (IABNZ) general manager, Alisa Higgins said the Internet soaked up about 82% of New Zealander’s media consumption time – the second highest after TV. “People are now spending more of their waking days interacting with media than any other activity including eating, working and sleeping with two thirds of total media consumed through our monitors and screens.”

IABNZ chair Liz Fraser, said the online advertising sector was just warming up. “The upside is huge and many opportunities lie untapped.”

“On other fronts we see continued growth of performance (cost-per-click) advertising. Video advertising – massive in other markets – is beginning to take a foothold, and the introduction of AdExchanges will substantially change the way our medium is transacted. Scope for innovation is endless.”

Draft FCB managing director Derek Lindsay said online advertising’s advantage was it allowed for far greater tracking of success per expenditure. “[You can measure] the cost per click, per acquisition, how long people are on a page.” He said, with the right systems, advertisers could see who followed up ad clicks with physical site visits.

“It’s the first real time we can know if advertising’s working. It’s harder for radio and magazines to measure that.”

Last year, the then IAB chairman Michael Gregg predicted online advertising would soon pass radio and magazines. “During the recession, digital’s accountability put online at the top of clients’ media schedules.  This didn’t change after the global financial crisis, as ad agencies tried to prove to clients that they understand this medium and could adapt from the 30 sec TV commercial era.”

He said Facebook advertising gave online display advertising a late lift in the fourth quarter of 2010. Diverting the "rivers of classified gold" from newspapers and the surge of search advertising meant it was only a matter of time before online passed radio & magazine revenues.  Online advertising grew over 26% last year lifting its share to over 12% for the 2010 calendar year.

Trade Me head of advertising Yael Milbank said the growth was partly a natural development as consumers spent more time online and advertising dollars followed. “Demand for online video, new ad products and new targeting models have helped the market take a big step forward over the last year.”

MediaWorks’ director of interactive media Siobhan McKenna said it was definitely a case of online rising rather than radio falling.

“In radio there’s a little fluctuation, but it’s a stable medium. What I would expect is for TV to surpass print. Ultimately online has the capacity to overtake TV.” However, she said this wasn’t likely to happen for some time, a prediction seconded by Mr Lindsay. Ms McKenna estimated the overtake could be up to ten years away.

He said online advertising had a larger market share in “more mature” countries such as the UK and Australia.

Online advertising expenditure in Australia was AUS$2.265 billion in 2010. Internet Advertising Bureau Australia chief executive Paul Fisher said it was on track to reach AUS$3 billion by 2012.

Charlotte Woodfield
Thu, 17 Mar 2011
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Online ad spend moves ahead of radio, magazines
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