The latest IAB Insight Report – covering Q4 and the full 2008 year – has been released by the Interactive Advertising Bureau of New Zealand and PricewaterhouseCoopers.

It shows an incredible 43% growth in interactive adspend over 2007, up from $135.16m to $193.15m in 2008, confirming interactive as the fastest growing major medium in New Zealand.

Kevin Bowler, Chairman of IAB NZ commented “In times of economic down-turn, advertisers will shift investment to media that delivers the most accountability. In this regard, on-line has a compelling advantage which smart marketers will gravitate increasingly to in 2009 as they seek to get the most value from their avertising investments.”

All interactive expenditure types recorded strong growth.

Search and Directories lead the way growing 75% to $59.71m and represented 30.9% of all interactive spend, up from 25.3% in 2007.

Display advertising grew 38% to $58.12m accounting for 30.1% of all interactive spend in 2008. Within this strong growth were some significant changes in spend by industry category.

Growth categories were Travel and Accommodation – up to 13.76% from 10.29%, and Government Departments up to 12.27% from 10.69%, perhaps influenced by the election in 2008. Not surprisingly, Investment Finance and Banking dropped from 16.21% to 13.94% of total spend and Leisure Entertainment and Media from 11.15% to 9.81%.

“We expect marketers to allocate a greater share of their budgets to display, especially in rich media and video formats as technology advances make these formats more readily available and affordable” added Greig Buckley CEO of the IAB.

Classifieds grew 28% to $75.32m in 2008, but the share of total spend dropped from 44% to 39% in 2008, reflecting trends in other markets.

Buckley added “The year on year growth of 43% shows that the interactive media are realising their potential. And there is more growth to come as marketers recognise its power to build brands as well as generate direct responses, and agencies appreciate its creative flexibility. We expect even greater use of richer media formats lke video and mobile."

In the last quarter of 2008, despite tough business conditions, total online advertising was up 22.6% on the same quarter previous year, and all types showed double-digit growth on Q4 2007.

Search & Directories advertising increased most significantly, up 44.1% on Q4, 2007.

But Display (up 20.1%) and Classifieds (up 12.7%) also showed strong increases.

"..... we have seen considerable growth in all areas of spend year on year. At a time where cost cutting is prevalent, this is a clear testament that interactive advertising is a growing share of New Zealand marketing budgets." says Chris Perree, Partner at PricewaterhouseCoopers.

Buckley added that spending online is expected to continue growing as advertisers shift more budget online to reach the increasing number of people using the internet, for more hours every week.

Download IAB Insight Report