If it's not on the web then it's out of the loop

By Simon Hendery

New Zealand businesses spent around $2 billion last year advertising in print and over the TV and radio airwaves.

When the precise ad-spend figures for 2007 are totted up, however, they are certain to show the traditional heavyweight mediums' share of advertisers' budgets slipped while an upstart alternative - online advertising - grew rapidly.

Local companies spent well over $100 million advertising their products and services online last year, a figure which excludes other internet-based promotional activity such as email marketing and website development.

Last year's feverish online ad-spend growth - of over 20 per cent per quarter - is likely to continue this year as the number of consumers with broadband connections at home continues to spike and advertisers increasingly embrace the online medium's power to target specific audiences and measure their response to ad campaigns.

Here are six ways local businesses can get the most out of online advertising and marketing:

Don't ignore the shift online

According to the Interactive Advertising Bureau (IAB), New Zealand advertisers spent $98.6 million placing ads online during the first nine months of 2007, with quarterly spend jumping 22.9 per cent to $41 million between the second and third quarters.

IAB chairman Lee Williams said: "New Zealand advertisers are clearly moving online at pace due to the targeting and campaign measuring benefits of the medium. There is no other advertising medium experiencing this level of growth."

The amount of local money ploughed into online ads last year surpassed that spent in the "out of home" sector (billboards and street furniture advertising) and there are predictions total global online ad-spend will surpass radio and magazine spend in 2010.

As consumers devote less time to watching the major TV networks and spend more hours in front of their computers, online ads - which can take the form of website "display ads", online classifieds or search engine listings - are an increasingly effective way to reach specific audiences.

Search engine optimisation

Search engines, particularly the market-dominating Google, are a vital tool for online marketers.

According to Google's own research, three-quarters of New Zealanders who shop online use a search engine to find what they are looking for.

The internet is also becoming an increasingly powerful adjunct to traditional advertising. According to the same Google research, 50 per cent of those influenced by TV, radio and print ads said they would use a search engine to follow up on products or brands they first learned about offline.

With so many potential customers typing brand and company names into search engines, effective online marketing is about ranking highly on search results lists, and this means businesses need to "optimise" their websites so they are as visible as possible to the likes of Google.

A plethora of consultancies offer search engine optimisation services. Speaking at an Auckland search engine conference in November, Jacqui Jones of North Shore online marketing agency Netconcepts said revamping and optimising the website of a client in the competitive online real estate market had helped to more than double the number of monthly visitors to its site in less than a year, propelling it from fourth to second most popular site in the sector.

Search engine marketing

Search engine optimisation is part of the wider craft of search engine marketing, which includes buying links on the "sponsored" site of a Google search result page for specific search terms.

Search marketing accounts for about a quarter of local online ad spend and is the primary way Google makes its money.

When Rabobank wanted to increase its profile among wealthy New Zealand term-deposit investors, it ran a search marketing campaign which involved buying space on Google search results for words such as "savings" and "KiwiSaver". It also bought non-financial phrases likely to snare its target demographic, including "Tour de France" and "Cognac". BUSINESS BLOGGING Increasing numbers of businesses are attempting to harness the marketing potential of blogging.

Thom James, of public relations agency Bullet PR, told November's Search Engine Room conference blogging was an efficient way for companies to reach out to their customers, disseminate information and develop a "thought-leadership" position in the market.

"A blog also provides a really good response mechanism to any negative - or positive - comments an organisation might receive," James said.

"So by instigating a conversation with people, by encouraging them to come in and take part in a conversation, you really convey that sense that the corporate culture values transparency, values authenticity and that in turn engenders customer loyalty and trust in your brand."

A business blog needed to retain the personality of the executive writing it, rather than be PR-driven, he said.

The power of YouTube

Local marketing initiatives that attempted to harness the popularity of YouTube last year ranged from a reported $4 million spend by Tourism New Zealand to place promotional videos on the video-sharing site, through to a piano accordion rendition by Telecommunications Users Association (Tuanz) boss Ernie Newman to publicise his organisation's internet awards.

Tuanz marketing manager Sarah Putt later blogged that the Government tourism agency's seven-figure spend equated to about $5 for every person who viewed the Tourism NZ video clip, whereas Tuanz's $300 production cost it 18c per viewer.

As with all marketing, it is return on investment rather than cost-per-view that is ultimately important with an online campaign. But Putt's calculations are a worthwhile reminder that internet marketing is available to organisations with budgets of all sizes. PUBLIC RELATIONS 2.0 The rise of blogging, combined with the media and public's increased reliance on internet search as an information source, is changing the way public relations firms compile and dispatch information for clients.

Media releases are now often written in language aimed at achieving a prominent placement on news aggregation websites and search result listings. At the same time, the PR industry is grappling with how best to get messages out to not just the traditional mainstream media outlets, but also the myriad of less accessible bloggers who can now also influence the public's perception of their clients.

As Bullet PR's James says: "The advent of web 2.0 has certainly created a fair share of challenges for PR practitioners to come to grips with, but at the same time, it's also opened up a new world of possibilities for us."

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