Govt departments spend up on Facebook and Google

The Transport Ministry and NZTA spent almost $1 million on digital advertising last year, primarily on Facebook and Google. But spending on traditional advertising is still dominant, with the two government departments spending around six times that amount on television, radio, print and other non-digital advertising.

Information released by the Transport Ministry and NZTA under the Official Information Act found the two ministries spent nearly $6 million on traditional advertising in the last financial year, although the figure rises to $6.2 million when the digital wings of traditional outlets are included.

NZTA spent nearly $725,000 on advertising on Google and Facebook alone. The Ministry of Transport spent $99,000 on digital advertising, including on Facebook, Twitter, and LinkedIn. 

Facebook and Google have generated controversy in recent years for siphoning off advertising from traditional media including newspapers, leading to job losses in newsrooms. 

Media figures have been critical of the Government’s approach to Facebook and Google, accusing it of creating free content for American tech giants, whilst allowing domestic media to face the consequences of declining advertising revenue. 

Spinoff founder Duncan Greive has written that New Zealand governments have “actively supported the expansion and hegemony of Facebook”.

Greive noted that journalists had been trying to find how much state entities spend directly and indirectly on Facebook, but the size of government had made the investigation difficult. 

Another point of difficulty is the way different ministries record their advertising spends. Some have made it almost impossible to separate out digital advertising spending. 

An OIA given to Newsroom in May from MBIE found that the Ministry had spent $2,928,963 on advertising and public information campaigns in the 2016-17 financial year, but the super ministry did not “collate the total amount spent on publications as this expenditure is managed individually by business units across the agency". 

But information held by the Transport Ministry and NZTA is more granular.

On their figures, television still takes the lion’s share of advertising spending. NZTA spent nearly $5 million on television advertising in the 2017-18 financial year, nearly half of which was spent on alcohol and speed campaigns. 

Radio was also a big winner. NZTA spent $684,000 on radio campaigns. 

Of the traditional outlets, print is the biggest loser. In spite of having some of the largest newsrooms in the country, print media received just $298,000 in advertising from NZTA. 

The agency also spent some of its advertising budget on the digital platforms of our major print outlets, although this spend was much smaller.

NZTA spent just $50,000 in advertising on, in spite of it being the largest news site in the country with nearly two million readers, and just $14,000 in digital advertising on NZME platforms, including the New Zealand Herald’s website. 

This underlies the difficulty facing large print media organisations struggling to shift valuable advertising onto their online platforms.

By contrast, Google alone received $552,000 in advertising spend, nearly twice the amount spent on all print publications. Facebook received $174,000. 

Tim Pointer, CEO and Founder of Uprise Digital, which specialises in digital advertising, was surprised NZTA’s split between traditional and digital advertising was still skewed heavily in favour of traditional. 

“We see more moving towards 40 percent digital to 60 percent traditional,” he said.

Pointer said NZTA’s campaigns against drink-driving and speeding, which relied on big-screen emotions, played well on television and were targeted at wide swathes of the population, rather than the micro-targeting offered by Google and Facebook. 

“We’ve found digital great if you’re trying to be really hyper-targeted for your message,” he said. 

Stripping out the large television advertising spend, NZTA’s budget roughly correlates with Pointer’s 60-40 rule. 

Excluding television advertising, NZTA spent $1.2 million on traditional media, half of which was spent on radio and $830,000 on digital advertising (including digital advertising with and NZME). 

NZ Transport Agency Director Safety & Environment Harry Wilson told Newsroom NZTA’s advertising spending was based on “a very high level of research”, including targeting as a result of research into accidents.

“Crash data is analysed to identify who is crashing and where and why they’re crashing. We use this information to form the basis of each advertising brief,” he said. 

Wilson said the agency's spend was allocated “according to who we are specifically targeting and with what sort of message”.

He said marketing trends had seen an increasing spend on digital advertising. 

“While many of the campaigns still rely heavily on television advertising to reach a large audience, our use of Facebook, Google and other online channels has increased in line with the consumption habits of our target audiences,” he said.

Pointer said marketing habits had changed dramatically in the last decade. He said 10 years ago, between 5-10 percent of advertising spending would have been on digital ads. 

Now, in some cases the inverse is true. 

The Ministry of Transport's advertising spend is heavily skewed in favour of digital advertising. It spent $99,000 on digital media, including Facebook, Twitter, and LinkedIn in 2017, and just $6500 on traditional advertising, mainly radio. 

While the numbers look small on their own, multiplied out across the core public service they point towards a multi-million dollar spend on Facebook and Google. If each of the Government’s 30 or so core agencies spent as much as NZTA, the digital spend could rival RNZ’s core budget of roughly $40 million. 

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