Are NZ marketers finally starting to fish where the fish are?

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The latest digital marketing figures are out from the Interactive Advertising Bureau (IAB) and spend on digital marketing is soaring with 38% YoY growth in Q3 – but are Kiwi marketers keeping up with the Jones (AU and UK) when it comes to spending their marketing dollars on the right channels? I.e. the channels where New Zealanders are spending most of their time.


So 2014 is looking like it will be a $500m year for Digital advertising in NZ – up from $471m in 2013. But what percentage of total marketing budget is that and how does that compare with other international markets?

Total marketing spend in NZ sits at around $2.3b per year and around 22% of that is spent on digital marketing. When compared to Australia who currently spend 31% of their marketing budgets on digital we are 50% behind in online investment and even further behind the UK where digital budgets sit at 36% of total marketing spend.


New Zealand Digital Spend Q3 2014 Results



So that’s the stats – but what are the trends?

NZ is still very much in growth mode with 38% YoY growth for Q3.


Search & Directories is the overall winner (perhaps the beefing up of the Google sales team in the NZ office is paying off) increasing a massive 66% and utilising 54% of digital marketing budgets. Investment in search & directories grew from $52m in Q3 2013 to $86m in Q3 2014 – huge growth.


So what’s happening in Aussie and the UK?


Total online advertising in Australia for Q3 2014 grew 10% when compared with Q3 2013. Search and Directories have increased 9.9% and are currently at 49% of digital media spend ($580m).



Total digital advertising grew 16.6% in the UK, with 55% of the £3.5b being spent on search.



Let’s look a little closer and see if 2014 really was the year of Mobile for NZ marketers?

Spend on Mobile adverting increased 225%. Which seems like a lot – but is it?



NZ marketers spent $3.48m in Q3 2014 on mobile advertising – which is only 2.2% of total digital marketing spend ($2.59m on Smartphones and $0.9m on tablets). Compare that with the UK where mobile now accounts for 20% of all digital adspend, that’s 10 times larger than here in NZ and Australia is similar to the UK with mobile at 17.4% of total advertising spend (this is almost all mobile spend on search and display).  NZ marketers have a long way to go to catch up with mobile use and media consumption in NZ.


So are NZ Marketers starting to fish where the fish are?

The answer is yes and no.

They are starting to but they are a good 2 – 3 years behind Australia and the UK where over 50% more (as a percentage of total marketing budget) is being spent online.

Huge growth in the last quarter in NZ shows that marketers are starting to understand that digital needs to be a core part of all marketing campaigns and that their customers are spending a lot of time researching products and services and consuming media in an online environment.

Mobile  – well 2% or $1 in every $50 of digital spend isn’t exactly pushing the envelope – especially when our friends across the ditch are spending $1 in every $6 on mobile and fellow online marketers in the UK are spending $1 in every $5 on mobile. So still a huge amount of growth in this area which still remains largely untapped.


What do NZ Marketers need to do to improve their ROI game?

Search with a 66% YoY increase is starting to be better utilised – but there is still room to grow (another 50% for a start as shown by our UK and AU friends).

Marketers need to understand where their target audience is spending time and get in front of them in a contextually relevant way. Every year using the spray and prey approach by spending money on large TV and print campaigns is becoming less and less effective and the marketers that spend time understanding where their target market are spending time and reaching out to them are the ones winning the ROI game.

Brad has spent many years working on client side, developing digital strategies and managing teams to implement those strategies. He understands the challenges and priorities from an online marketer’s perspective ­ the high targets, tight budgets and the education required to gain internal buy ­in to digital strategies. He also likes riding his Mt bike and telling stories about all the mountains he has climbed before becoming a Dad.

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