SYDNEY, Friday: New Zealand’s media agency market looks set to sustain the current period of higher advertising demand at least until the end of CY2019, new Standard Media Index forecasts show.
The news came as SMI released the first combined view of the Australian and NZ media agency advertising markets, revealing the value of advertising inventory sold in both countries totalled NZ$8.1 billion in 2018/19 and to have grown by 19% or NZ$1.28 billion in the past 10 years.
The figures were included in SMI’s first Trans Tasman Ad Spend report which was created to mark SMI’s 10-year anniversary this month and was launched at an industry breakfast in Auckland this morning.
SMI AU/NZ’s Sydney-based managing director Jane Ractliffe said numerous advertisers invested in media in both countries, so the report was created as a key reference tool to make it easier for agencies and their clients to understand the changes in advertising demand and media share mixes across both markets.
“Of all the countries in which we publish ad spend data the Australian and NZ media markets are the most similar, but at any time there’s never complete uniformity so this report provides a top line view of the common trends,” she said.
And so far this year both countries are also reporting lower advertising demand for the first eight months of this year, with the AU market back 4.9% and the NZ market back 0.5%. In NZ, monthly adspend fell for 12 consecutive months but has now moved back to growth in the past four months.
“It’s clear in our empirical data that extended periods of lower advertising demand are followed by strong bounces as business confidence recovers and pent up demand leads to bursts of above-average advertising expenditure,” Ractliffe said.
“If you look at SMI’s global ad spend data from 2010, in that year the US advertising market grew by 18%, the UK market by 10%, the NZ market by 11% and the Australian market by 17% as they all bounced back from periods of low demand.’’
Ractliffe said the Australian market was currently experiencing a downturn similar to that seen in NZ in the 12 months to May, but the NZ market now looks set to remain on a positive trajectory for the remainder of the year.
“In NZ, monthly adspend fell for 12 consecutive months but has now moved back to growth in the past four months.”
We’re now forecasting NZ Agency ad spend to be 1.9% above where it was in the September-December period last year which will in turn ensure the total market is back in the black this year,’’ she said.
“There’s been a very welcome increase in NZ Agency ad spend in the past four months – the market is now up 4.4% from the same four months in 2018 – and that’s mostly been due to higher spending from the Government (+30%), Banking (+27%) and Utilities (+43%) categories.’’
SMI also released its first Product Category ad spend forecasts at the event which showed that of the categories spending more than 30% of their media budgets in Q4 two of the largest – Retail and Communications – were likely to grow their Q4 ad spend against the same period last year.
SMI’s forecasts show that in the four months up to December Retail adspend will grow 1.8%, and Communications ad spend will lift an impressive 12%. Another large category – Specialty Retail – will deliver stable ad spend.
The Trans Tasman Ad Spend report, available now from SMI, shows that in the past 10 years the greatest increase in combined AU/NZ adspend has come from Retail advertisers in both countries (+$299 million) followed by Automotive (+$259 million) and then Financial Services/Insurance (+$190 million).
“The report also highlights the speed of change within the media industries of both countries over the past ten years as advertisers within those categories continue to shift their ad spend across various media,” Ractliffe said.
“But as SMI sources its data from the agency payment systems we’ve been able to keep the market fully informed as demand trends change.”
About Standard Media Index
SMI was established in 2009 in Sydney and has offices in New York, London and Madrid. SMI partners with leading global media buying agencies to provide independent, accurate and timely advertising expenditure data to its clients to facilitate informed analysis of the media sector and product category expenditure. Data is sourced directly from advertising agencies’ billing systems and then aggregated to show the combined picture of media agency adspend across all major media, media sectors, 40 product categories and 126 digital product categories. It allows subscribers to monitor and analyse key data points that can be actioned to grow share and make better investment decisions. SMI provides the only clear picture on how ad dollars are being spent. SMI works with media agencies in 15 global markets.
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