New Zealand’s ad market has shrugged off a sharp retraction in Government category ad spend post-Covid to deliver a record level of ad spend in the past financial year 2022-23, with the total up 1.4 percent to $1.17 billion.
Standard Media Index (SMI) NZ figures show a record ad spend reported this FY, despite the market reporting another month of lower ad spend in March against the record March 2022 period, with total bookings back 8.6 percent. But that decline was again mostly due to a significant fall in ad spend from the largest category of Government (-25 percent YOY in March). When that is removed the underlying decline in New Zealand ad spend reduces to -6.2 percent.
In the March quarter, total bookings are back 7.2 percent but that’s also compared to a record level of ad spend in the March 2022 quarter.
SMI AU/NZ Managing Director Jane Ractliff says the return of Government category ad spend to pre-Covid levels has abnormally impacted the market across all time frames.
“Government ad spend necessarily increased significantly during the Covid period given the amount of specific messaging required. But as it’s no longer needed we’re seeing a super sharp decline in Government ad spend which over the course of this financial year is down by 18 percent. This represents a loss of more than $26 million in ad revenue,” she says.
April 2023 ad spend by channel
Looking at the latest ad spend figures YoY for April 2023, SMI figures show a decline across all major channels with the exception of Cinema.
Jane says that the market was most affected by a 39 percent YOY decline in Government ad spend in April as Covid messaging eases. “Excluding Government spend the decline was 10.4 percent.”
This article was originally published in the June/July 2023 issue of NZ Marketing. Click here to subscribe.