Advert revenue tops $2 billion

Advertising revenue broke the $2 billion barrier for the first time last year.

Television networks, newspaper companies and radio stations were among those that divided up the spoils from an 11.7 per cent increase in revenue, to $2.08 billion in 2004 from $1.86 billion the year earlier.

Advertising Standards Authority figures showed yesterday it was the sixth consecutive year of growth, but represented an easing from the 18.7 per cent jump seen in 2003.

Analysts said last year's increase largely reflected the buoyancy of the economy. While the good times were far from over, most anticipated further easing this year.

"There was fantastic growth last year," said ABN Amro media analyst David Boyce. "We wouldn't expect it to grow as fast as that [again] but the economy is still growing at a reasonable pace and we have a fair amount of momentum going into the second half of the year ... we still see reasonable growth but not the double-digit figures we've seen in the last two years."

Alliance Capital Management analyst John Norling agreed. "If you look at the 12 months it's going to be single digits, rather than double."

Brent Impey, chief executive of TV3 and C4 owner CanWest MediaWorks, said the latest figures showed the market was as strong as had been expected. "We're not anticipating it to continue at quite that same strength," he said. Across CanWest's divisions - which include television and radio assets - growth for the first part of 2005 was averaging around 6 per cent.

Television increased advertising revenue by 8.6 per cent in 2004, but newspapers were the real growth area. They collected $101 million from the total increase in advertising revenue last year - almost as much as went to TV, radio and magazines combined.

Michael Carney, a media strategist at Mediacom, said new publications, including Herald on Sunday by the Herald's publisher APN Holdings, could to some extent have fuelled the increase. But the main reason for the gains were higher prices in a buoyant market. "In my view, most of it can be laid at the doorstep of rate increases," he said.

The fastest growth, though from a low base, was enjoyed by online advertising. It nearly doubled revenue to $15 million from $8 million in 2003.

Media money

* Newspapers took in $790 million, up 14.7 per cent.
* Television ad revenue grew 8.6 per cent to $643 million.
* Growth of 11.9 per cent took radio ad revenue to $247 million.
* Magazines managed a 14.9 per cent increase, with ad revenue totalling $223 million.