From The Australian, IAB Australia CEO Paul Fisher is predicting online advertising could reach almost 17% for the full 2009 year, up from 12.5% in 2008.  This is based on analysis of the first half calendar year where online grew at 12& against an 8% decline on total media spending in the Australian market.

Paul suggests that this 2% half yearly growth could continue in the first half of 2010, maintaining annual growth of 14% for the full 2010 year.  I agree with his sentiment that the migration of Australian advertising to the online medium is the most significant change to the advertising industry in many years.

In New Zealand the growth is more cautious, but equally significant in terms of the structural shift underway.   The local industry is awaiting the independent ASA media splits with great interest.

According to a media release put out by Nielsen in Aussie last week, one-third of Australian consumers exposed to an online advertisement are able to recall that advertisement when asked, and 41 percent are able to link the correct brand to an un-branded advertisement, according to new online advertising effectiveness benchmarks released today by market research company Nielsen.

The Nielsen research, developed over three years and based on more than 100,000 Australian respondents, for the first time provides Australian organisations with a set of reliable, local performance benchmarks against which to measure the effectiveness of their online advertising campaigns.

The Nielsen benchmarking research revealed that intention to purchase or use products or services increased by 4.9 percentage points following exposure to an online advertising campaign, and brand sentiment increased by 5.3 points.

Awareness also saw a jump following exposure to an online advertising campaign – top-of-mind awareness jumped 3.1 points while prompted awareness increased by 3.5 points. The likelihood of a consumer recommending a brand following exposure to an online advertising campaign increased by 4.4 percentage points.

“At a time when marketers are seeking to invest their resources where they will gain the most return on their investment, the Nielsen benchmarks provide further evidence of online advertising’s effectiveness. We look forward to even more data being made available from both Nielsen and others, demonstrating to agencies and advertisers how online can offer a significantly more targeted, measurable and effective medium than any other media to reach, engage and influence consumers,” said Paul Fisher, CEO of IAB Australia.

The PricewaterhouseCoopers IAB Insight Report for the quarter to June 2009 has been out for a little while.  Sorry for not posting some graphs earlier.

The good news is that New Zealand online advertising is up 6.56% on Q1/09 (Calendar) with total spend calculated at $52.49M.
Spend for a rolling year is at $199.8M bringing online closer to radio and magazines.

Display advertising grew 5.75% in Q2.  As a comparison to published television advertising revenue, online display adspend grew 10.5% in the six months to June 2009. This compares with TV which declined 13.3% over the same period.

Whilst all media and creative spend has taken a bit of a hammering over the past year, online is emerging relatively unscathed from the current recessionary period,  and future quarters should show a structural change to the media landscape with newspapers and television continuing to be hit particularly hard.

One of the ad team at Trade Me flicked me an interesting graph this morning. A daily breakdown of the August traffic to New Zealand’s largest home page, Trade Me, and runner up, YahooXtra as independently measured by Nielsen Online from tags placed on our pages.

Trade Me is New Zealand's favourite home page (August 2009)

I was surprised at the low weekend rating of YahooXtra; don’t people check their xtra mail accounts in the weekend? You would want a big discount if you advertised on their Saturday. Interestingly, Stuff.co.nz is now New Zealand’s third largest website and New Zealand’s most popular news and entertainment site, bigger than nzherald.co.nz.

In the mysterious world of the Internet, sometimes the most obvious statistics get hidden amongst the plentiful jargon and myriad of metrics.  NBR commentator, Chris Keall, has this week highlighted the phenomenal size of Trade Me’s membership, asserting that the answer to the question: ’How many New Zealanders use Trade Me? is simply ‘All of us’. 

His explanation of how UBs (Unique Browsers) are calculated is pretty accurate.  However the measure still to be cracked is a calculation of how many people either share the same pc/internet connection, or gather around computer screens as the auction nears closing, auto-extends with bids frantically placed by multiple parties and tension rises.   If it was a magazine or newspaper we would calculate this as ‘readership’, but for computers connected to the Internet, we assume one IP address means one computer and one person.

Perhaps counting UBs is a relatively conservative measure of how many unique viewers are spending time on websites such as Trade Me?

The New Zealand online industry is in good heart with all sectors of advertising expenditure recording YoY growth at a combined growth rate of 43%.

Display Advertising was up 38% against full year 2007, 20% up on same quarter 2007, but flat on Q3, as anticipated due to the traditional drop off in the last week of December.  All data courtesy of IAB PwC Insight Report 2007 and 2008. 

Already some trends are becoming evident. Display adspend growth slowed in 2008 compared to the rocket that was 2007 (the first year data on gross adspend received by NZ online publishers was provided to, and audited by, PwC) but continues its annual climb at the expense of other media sectors.

Quarterly analysis is useful for forward planning.  We’re starting to see that Q1 drops on previous quarter, due to light January revenues.  Q2 is the biggest growth quarter (up 30% in ‘08 and 44% in ‘07).  Q3 gives solid growth as new marketing spend is released and wisely chooses online over traditional offline media.  Q4 remains flat on Q3 due to Xmas (odd, given the growth in interactive retail advertising last year) before dropping back in Q1.

In the Oct-Dec quarter of 2008, spend from Government campaigns was up 3% (this growth is unlikely to continue in 2009) and finance sector online advertising were down by a whopping 5.8%, demonstrating the impact of finance companies going broke combined with a reluctance by trading banks to advertise mortgage rates as credit tightened.  The automotive sector drop of almost 1.8% was partly seasonal but also recession-related.

It is expected that the financial sector will bounce back to be the leading industry category in the Jan-Mar first quarter of 2009 due to increased mortgage & card activity, travel will hold up as airlines invest to move national and international seats (along with the national launch of Jetstar), government spend will decline slightly as the keys to the various coffers are progressively locked away and telecommunications sector advertising will remain steady but expect big growth in Q2 due to a lift in mobile spend and continued agressive broadband investment.

A final note, on search.  This online sector progressively declined quarter by quarter from $15.13M in Q1 down to $14.57M in Q4/08.  I wonder if this is why Google is not replacing its New Zealand Country Manager?

Hot from the desk of the IAB:

Interactive Advertising Bureau (NZ) seeks evangelist CEO
Saturday, 18 October 2008

IAB New Zealand, the industry body representing New Zealand’s dynamic and rapidly growing interactive advertising and marketing industry is looking for a new CEO.

In two years IAB New Zealand has grown from a handful of startup members to representing over 80 member companies including New Zealand’s largest and best known online media companies and leading advertising agencies. Our members include instantly recognisable brands such as Trade Me, Yellow Pages Group, Vodafone, Google, Yahoo, MSN, MySpace, APN, Fairfax, ACP, TVNZ, and many many others.

IAB New Zealand is an affiliate of a network of 26 IAB’s around the world, which together form a powerful global network focused on driving interactive advertising and marketing and represents the world’s largest media companies, advertising agencies and advertisers. IAB globally is the authoritative voice on interactive advertising – the world’s fastest growing medium.

We’re looking for a seasoned advertising and marketing professional who’s a passionate advocate of interactive media and advertising to lead us into our next phase of growth. This is an opportunity to work with the leading practitioners in new media locally and globally and to help shape the most dynamic, fast-changing industry around.

If you are an advertising/marketing professional with strong executive experience, a network of contacts to die for, and a passion for interactive this is your opportunity.

We’re prepared to be flexible for the right person, so this could be a full-time or part-time role. But we need the best. So if that’s you, we want to hear from you. Now.

Applications or enquiries via email to applications@iab.org.nz.
Applications close 31 October, 2008

I sit on the IAB Board and can recommend this role for an up & coming interactive evangelist. I reckon it’s a full time position, plus! Get the IAB Job Description if you’re interested.

Ok - here’s a thorny question for advertisers. If you are buying banner advertising on New Zealand websites, do you prefer to buy domestic or all eyeballs? All includes international traffic as well. Are you even advised of the split between local and offshore traffic on the sites your ads are running on?

I wonder if the publishing community needs to agree a compulsory standard for pre- and post-reporting of traffic used for advertising purposes? Or am I alone in thinking that offshore viewers are much less likely to buy your products and services?

It’s great to see Stuff’s new ‘no waste’ ratecard [pdf] specifying domestic eyeballs. Trade Me’s sites [pdf] only have a small percentage of offshore viewers (checking out property, jobs and cars back in NZ and hopefully coming back home soon), unlike the News Sites that have a large offshore audience. Unless you’re trying to target a global audience, offshore traffic should be factored into calculating effective CPM rates.

Many sites including Trade Me are able to offer country targeting if you do need to tap Aussies, Americans, English or others.

They let me rant in the IAB Newsletter this month …

The Australian IAB/PwC Online Ad Expenditure report for the quarter ending March ‘08 was released last week.  It shows growth in Search and Classified from the fourth quarter of 2007 but a decline in Display advertising of 9.6%.  Anecdotal feedback suggests we should expect to see a parallel result when our domestic figures are released later this month.

If the New Zealand market holds up in similar fashion, the industry should be quietly pleased with the shallow drop of the summer break and the strength of the post-January bounce back.  However we should not neglect to delve further into the display decline.

It would be easy to just put this revenue dive down to January summer holidays but this hides an issue that has held back the industry and our share of total adspend over this period.  Simply put, we have failed to convince advertisers that people still surf over summer (and not just at the beach).

The lift in Classified advertising indicates listings growth for properties, jobs, cars and dates over this period – perhaps due to the increased personal ‘on-internet’ time available to consumers or their increased buying activity during the summer months.

The Search bods know this, which is why they increased their adspend to reach these people while they’re in the mood for investigating online purchases, reviewing brands and making buying decisions.

Continuing the education theme of last month’s newsletter, I believe that the Display advertising folks can do more to prepare for the ‘09 summer season.  We need to publish traffic results to educate edgy advertisers that consumers really do continue to use the ‘net over the holidays and hold advertising rates to demonstrate our belief in this.

Research into buyer behaviour over this period will throw up online transactional behaviour that favours advertisers in seasonal categories such as travel, clothing, fast food, for instance.  We should take advantage of this before Q4 bookings start getting planned.

Now, to be clear, a decline in display advertising expenditure during this quarter should absolutely be expected, regardless of the volume of annual growth.  But we shouldn’t just wring our hands & wind back our January forecasts.

Just as advertising in a recession logically favours measurement-obsessed online media, so should advertising in times of lighter media consumption. The Search and Classified segments know this. It’s time for the Display advertising publishers to make a case and collectively pitch it.