“EXTRAORDINARY TURNAROUND” FOR AD SPEND THIS FINANCIAL YEAR

New Zealand’s ad media industry has hit the $1.1 billion mark for the first time, breaking previous ad spend records for the financial year according to the latest data from Standard Media Index (SMI).

SMI AU/NZ Managing Director Jane Ractliffe says this increase of 19.2 percent from the prior year reflects the strong level of consistency in the market following disruptions during the Covid period.

SMI has reported year-on-year growth in every one of the past 12 months with this trend continuing into March as total ad spend increased 3.5 percent – another record level for any March month – driven by stronger demand for the digital and radio media.

“To have now broken through the $1 billion market for the first time in a financial year really is an extraordinary turnaround from the dark days in mid-2020 when the impact of the Covid pandemic was at its peak. Now the ad market has followed the economy in learning to live with Covid and that ensures more certainly for all media stakeholders,” Jane says.

The government category had the largest total ad spend in March, soaring 42.5 percent year-on-year. Retail ad spend was the second largest category, up 7.6 percent.

March quarter ad spend has also broken all previous records, with the total up 6.4 percent as digital media ad spend soared 14.8 percent and radio bookings grew by 10.8 percent.

And for the financial year, the value of New Zealand’s ad spend grew 19.2 percent to $1.1 billion with digital media bookings lifting 26.1 percent, TV ad spend growing 10.9 percent and bookings to outdoor media increasing by 28.2.

NZ MARKETING: LAST YEAR BROUGHT WITH IT THE LONGEST LOCKDOWN, AT LEAST FOR AUCKLANDERS, AND A GREAT DEAL OF UNCERTAINTY. WHY WAS THIS FINANCIAL YEAR SUCH A STRONG ONE?

Jane Ractliffe: The market has rebounded strongly from the Covid period, most likely due to pent up demand and also with the return of certainty to the market. As a result, total spend jumped 19.2 percent last FY break through the $1.1 billion mark for the first time. And that total is also 5.1 percent above the pre-covid period of 2019/20 which underscores the current strength of the market.

WHICH CHANNELS EXCELLED AND WHICH ARE ONES TO BE CONCERNED ABOUT?

Given the size of the Covid downturn, this financial year we’ve seen all major media deliver strong growth in FY2020/21 with the value of digital ad spend growing by 26 percent over the previous financial year, outdoor bookings lifting 28.6 percent and TV bookings up 10.9 percent. And within the digital media most of the growth came through programmatic advertising and search advertising.

DO YOU SEE THESE TRENDS CONTINUING INTO 2022/23 AS WE MOVE INTO A NEW PHASE OF LIVING WITH COVID?

There’s certainly no sign that the current level of advertising demand is going to decline anytime soon. SMI’S forward pacings data – which tracks the level of confirmed future bookings – shows the market remains resilient and there’s nothing to suggest that will change anytime soon.

DO YOU HAVE ANY DATA/INSIGHT ON HOW MUCH SPEND BY ADVERTISERS REFLECT A MULTICHANNEL APPROACH, AS OPPOSED TO JUST FOCUSING ON OOH FOR EXAMPLE?

No we can’t see where they’re spending by individual advertiser. But what is interesting is that government ad spend has emerged as by far the largest advertiser category during the pandemic, with total government ad spend jumping 32.4 percent from the previous FY to now be at $140 million. Other categories reporting very strong growth in this period are specialty retails (mostly hardware stores) where the value of ad spend soared 35.4 percent and banking where ad spend jumped 37 percent.