NZ online ad spend rises despite challenges

A surge in mobile and online video advertising has helped grow New Zealand's total online ad spend in the face of tough market conditions, latest figures show.

The Interactive Advertising Bureau New Zealand's (IABNZ) quarterly figures show the amount spent on advertising in the third quarter of 2012 was $94.02m.

That was 3 per cent more than the second quarter and 4.76 per cent up on the same time last year.

While spending on display advertising has dropped from $29.43 million to $27.63 million quarter-on-quarter, and email expenditure by 19 per cent in the past year, other platforms are keeping things afloat.

Online video ad spending dropped slightly from the second-quarter but has grown 23 per cent over the year, said John-Paul Randall, IABNZ vice-chair and TVNZ digital media sales manager.

The increase follows a global trend, with similar results being seen in the US, UK, and Australia, Randall said.

"With growing audiences and the increased consumption of online video content, this trend is expected to continue as advertisers follow consumers.

"Additionally, advertisers are taking the opportunity to elicit audience interaction with more video advertising creativity being tailored for the online viewing experience."

Compiled by PricewaterhouseCoopers (PwC), the figures show mobile advertising remains the big grower, up 157 per cent year-on-year.

The increasing popularity of smartphones and tablets is providing advertisers' with greater opportunities to reach out to consumers, said PwC partner Chris Perree.

"The use of social media and mobile platforms to communicate and engage with consumers is a key driver of growth in the online advertising market," he said.

Mobile ad spending has grown from $0.28 million in the first quarter to $0.69 million.

New Zealand's total online advertising spend so far this year is $265 million, which represents 81 per cent of the overall spend last year. It surpasses the total amount spent in 2010 of $257 million.

Classified advertising continues to grow, having seen increases for the last five consecutive quarters.

Perree said the drop in display advertising could be attributed to factors such as the holding back of spending in the Christmas season lead-up.

IABNZ is a not-for-profit trade association representing online and mobile advertising.