Entertainment & Media Outlook 2011-2015 - PwC

“The key question companies shouldask themselves is: are we dominatingthe word-of-mouth discussion?”Droga5’s Business Partner, Andrew StoneOnline alone records growthAdvertising revenue accounted for39 percent of the entertainment andmedia market in 2010. Advertisingspend is closely linked to economicperformance overall, and revenues fellalmost 12 percent between 2008 and2009, reflecting the weak New Zealandeconomy. Advertising spending is yetto return to pre-recession levels butrose 3.4 percent in 2010, partly due toincreased spending online.Interactive or online advertisingalone bucked the industry trend ofnegative growth between 2006 and2010, increasing threefold. It now sitsbehind newspapers and television asthe third largest earner of advertisingrevenue in New Zealand. The growthwill continue, predicts Droga5’s DigitalPartner, Jose Alomajan: “There will be ashift from online display and classifiedads to social advertising, and search willcontinue to grow in importance.” 7 In theUK, online advertising has overtakentelevision and newspaper advertisingand has the largest market share, butthere is scepticism about whether thiswill occur in New Zealand.Broadcasters and publishers arefollowing their audiences, and theadvertising dollar, online. Many aredeveloping advertising offerings thatcross media platforms, encompassingonline, print and mobile. One of themany group-buying websites thathave popped up in New Zealandis Cudo, launched by MediaWorksin March 2011 in partnership withCudo Australia, ACP Magazinesand Microsoft NZ. This servicedifferentiates itself by making useof MediaWorks’ radio stations,television channels TV3 and FOUR,MediaWorks websites, MSN NZ andACP Magazines. 8More advertisers will launchmulti-channel campaigns duringbig events such as the Rugby WorldCup, APN’s Chief Executive, BrettChenoweth predicts. 9Digital technology has had a hugeimpact and the television industry isone of the segments most affected.TelstraClear’s Head of ConsumerMarkets, Steve Jackson, points outthat, for instance, in a personal videorecorder world where ad-skippingis common, TV advertising is losingeffectiveness. 10 He foresees digitaloutdoor advertising will continue togrow in importance, and APN’s ChiefExecutive, Brett Chenoweth concurs,as digital screens replace the staticbillboard and attract new advertisers. 11Online advertising will also continue togrow, while radio will remain a robustadvertising channel because it is a costeffective way to reach a mass audience.Mobile advertising currently makesup only a small proportion of totalonline advertising but will increaseits share over time as smartphonesand tablets become more popular.Video is a significant part of the onlineadvertising mix in other countries andNew Zealand organisations are startingto embrace opportunities in this space.For example, Air New Zealand usesonline video advertising campaigns toshare messages and engage its targetaudience. Improved broadband accessand speed will support growth inonline video advertising.7 Jose Alomajan, Droga5, to PwC, 11 April 2011.8 ‘About Cudo’, www.cudo.co.nz, accessed 28 March 2011.9 Brett Chenoweth, APN, to PwC, 18 April 2011.10 Steve Jackson, TelstraClear, to PwC, 18 April 2011.11 Brett Chenoweth, APN, to PwC, 18 April 2011.New Zealand Entertainment and Media 2011-2015 | Outlook 13