If it was possible for something to be epically depressing, it would be the advertising statistics released last week. For the first time, the annual digital-only advertising spend in New Zealand was double that of all other media combined.

The vast majority of that digital-only spend is with Facebook, Google, and TikTok. It disappears offshore with only a risible amount of taxation deducted from companies that are artful profit shifters. Worse, it has sucked the lifeblood out of our media industries along the way.

Figures released by the Advertising Standards Authority showed that the digital-only spend was $2.7 billion. All other media in New Zealand– through both their traditional outlets and their own digital platforms – attracted $1.35 billion in advertising revenue. The numbers could not have been starker.

The New Zealand Herald’s Media Insider, Shayne Currie, attempted to cast doubt on the digital spend after the ASA figures were released, noting that – unlike local media – the transnational platforms do not release actual figures. The digital-only spend is based on estimates. However, if anything, the digital-only estimates may be on the low side because the Interactive Advertising Bureau tracks only Facebook, Google and TikTok. It does not report on LinkedIn, Spotify, X and the like.

Nonetheless, the estimates released last week are not only consistent with revenue growth in other mature markets but reflect trends that have been apparent for years.

I have been tracking this country’s advertising spend since the ASA was established in 1990. For the first 12 years that it produced statistics, digital-only did not figure in the mix. In 2003 it recorded an extremely modest $8 million, not much more than one per cent of what newspapers earned from advertising that year.

By 2014, the digital-only sector had overtaken newspapers and by 2020 it had overtaken all print, broadcast and outdoor media combined. At no stage since it began to appear in the annual advertising statistics has digital-only recorded an annual decline. Over the past five years the average annual growth for digital-only has been $273 million. The annual growth 2024-5 was $310 million, which was within the range. This chart shows the inexorable trend (the 2020 dip was wholly attributable to other media).

Newspaper revenue in 2025 was less than a third of its peak of $830 million two decades earlier. Television advertising revenue peaked at the same time as newspapers, but its decline has not been as steep. It now sits at two-thirds of the $666 million it earned two decades ago, but faces strong headwinds not only from digital advertising but also digital streaming platforms that capture audience. Although they recorded a $14 million year-on-year increase (to $126 million) magazines have also shown decline over time. Radio has held its own with modest increases over the past five years but outdoor – boosted by the spread of digital billboards – has almost doubled revenue since 2020 – from $128 million to $233 million.

It is time, however, to stop looking at individual mediums and to consider the effect that transnationals are having on our media sector as a whole. The overall impact has been to rob New Zealand of the ability to report, represent and reflect the country to itself. It no longer has the revenue streams to fund the people and resources necessary to fulfil those functions. Nor does it possess alternative revenue streams that are capable of reversing their fortunes. Subscription services provide some relief but are far from being complete answers.

It has been apparent for some time that total reliance on market dynamics serves only the strongest, and that means the transnational platforms. Their algorithm-based dominance plus insulation from regulation and tariff makes their positions unassailable using commercial tools alone.

Part of what they extract from our small economy must be recouped and reinvested in the domestic industry to fulfil those obligations to report, represent and reflect the country to itself.

However, the present government has shown little desire to maintain the current state of the media industry, let alone resuscitate it. Its current term has been characterised by almost total inertia. Allowing Sunday advertising on television seems to be the peak of its achievements. That, I suggest, was about as challenging as persuading Donald Trump to use a gold-gilded frame on a self-portrait.

However, if National (and one or both of its coalition partners) is returned to office in November it will find itself running out of road in the media landscape. It will be forced to act to prevent the industry from suffering major setbacks and the creation of significant news deserts.

One way to do that will be to impose levies on the digital-only revenue that is currently flowing out of the country without surrendering the level of taxation that our domestic media pay without question. The framework for doing so exists within the OECD’s Inclusive Framework on Base Erosion and Profit Shifting. We would already have mechanisms in place to tax the transnational platforms under Treasury’s proposed Digital Services Tax but it was dropped last year in the face of Trump’s tariff threats.

It would have captured more than the likes of Facebook and Google and there are very good reasons for doing so. Newsroom reported last year that Google, Amazon, Facebook and Tesla paid just $8 million tax between them, off combined New Zealand revenues of $3 billion. Compare that to the $5.5 million that NZME alone paid on revenue last year of $345 million and profit before tax of $18.6 million.

There is no equity in such a situation and, sooner or later, a New Zealand government will have to summon up the guts to do something about it. It is vital, however that any media-linked tax revenue (and Treasury estimated the Digital Services Tax would generate more than $400 million) should flow back to support the media industries.

My former New Zealand Herald colleague Jacqueline Freeman, now communications general manager of NZ television’s industry body ThinkTV, summed up the imbalance. She told Shayne Currie: “…local media are the ones investing here, employing New Zealanders and contributing directly back into our economy.”

That imbalance can only be redressed by government (of whatever hue) recognising that it must act to create a new environment in which our media can serve the public in the ways that serve society as a whole.

Part of the solution would be for a far bigger proportion of the total advertising spend ($4.11 billion last year) to flow directly into our domestic media operations. And here I have to ponder a question that no-one has yet answered satisfactorily: Just how effective is advertising spent on platforms that are so secretive about how they do business?

Was the $2.7 billion spent advertising on those platforms last year actually effective? Did it result in more sales or other forms of transaction than would have been achieved by placing the advertising with local outlets? Where is the proof that throwing dollars into the algorithmic labyrinths operated by Google, Facebook and TikTok actually paid off?

I suspect there is something supremely seductive about the astronomical overall numbers of people using those platforms. Facebook alone has more than three billion monthly active users worldwide. However, like so much seduction, these numbers heighten emotions and diminish rationality. The platforms’ analytics that are spewed out in abundance may be telling us less than digital-native advertising sales staff might imagine.

Like many affairs, the seductive quality can diminish over time and that is certainly what is facing the relationship between media and the platforms that have been the only way they can gain click-through. Page views are plummeting as the platforms move away from their old strategies to new ones where large language model scraping sucks out information on a massive scale without the need to directly engage with those who actually produce it (unless the threat of legal action leads to easily-managed licensing deals with the biggest media companies).

Press Gazette in the UK has said AI is killing the publisher traffic model and notes that the country’s largest commercial news publisher, Reach, saw page views fall by 8 per cent in the second half of last year as Google referral traffic almost halved. New Zealand publishers will find themselves on the same sinking ship. And, for that reason, it’s times for advertisers and the agencies that advise them to rethink how they engage with audiences.

Here’s a suggestion for our domestic media if they can set aside their ill-conceived rivalries and act together. Choose a product. Then advertise it for one month in newspapers, television,  radio and their directly associated digital sites. But not on digital-only transnational paltforms. Then spend an equal amount of money advertising it for one month only on digital-only platforms and not on the traditional media. Then compare the sales figures.

Call me biased, but I have a sneaking feeling the local media will come out on top. If they do: Shout it from the rooftops.