Online advertising to eclipse newspapers by 2016

Online advertising figures are flooding in from all directions, this time the latest quarterly online ad spend results by the Interactive Advertising Bureau New Zealand (IAB) and PwC, which shows interactive ad spend is up 26 percent to $99.2 million in the first quarter of this year.

IAB's latest quarterly figure brings on a new methodology that's been a year in the making, and now includes more information on mobile and social media ad spend. The survey includes 40 New Zealand media companies and agencies, including APN New Zealand, Fairfax Media New Zealand, TVNZ, Ogilvy, Y&R and OMD.

IAB forecasts a 12 percent growth in interactive ad revenue each year for the next two years, reaching $510 million by 2015. This is a much more aggressive position than PwC's independent research which has online ad spend reaching $543 by 2017. IAB predicts that by 2016 online ad revenue will overtake newspaper advertising revenue.

According to the survey, New Zealand's online ad spend in Q1 is still dominated by search and directories (41 percent), followed by classifieds (31 percent) and display (25 percent). The display ads are further divided into video advertising which accounts for half the revenue in that category, followed by programmatic banner displays (8.6 percent of the total online ad spend) and email (just less than one percent).

Online advertising growth year on year (Q1):

Mobile: +196 percent
Search & directories: + 38 percent
Video: + 33 percent
Classified: +18 percent

Tourism and accommodation and the finance sector are the biggest spenders on display ads, accounting for 15 percent and 12 percent respectively.

Mobile has had the strongest year-on-year growth, up 196 percent – although it's still only a sliver compared to the overall picture,  $850,000 in spend in Q1. This is further broken down to reveal an almost even split between smartphone-targeted and tablet-targeted revenue.

Social media rounds off the figures, accounting for 2 percent of total interactive spend worth $1.72 million.

Online video is predicted to double in the next four years, says the IAB.