Online advertising hits a chord with clients

By RICHARD WOOD

The New Zealand online advertising industry has a problem - it is growing but does not know how big it is.

A project is under way to rectify this, but estimates abound in the meantime.

Herald online sales director Michael Te Young said online advertising spending was thought to be $10 million to $12 million annually, or about $20 million when classifieds were included.

The large front-page banner on the Herald website is booked out until next year. Other major sites are also experiencing surging demand.

Te Young said the advertising growth trend was stronger for online than for other media, and the Herald was 30 per cent up on last year.

Online's market share was closing in on the outdoor advertising industry.

The introduction of large-format advertising is driving growth.

Some clients are booking "internet roadblocks" of advertising across all the main home pages in New Zealand, which would cost about $30,000 for a week.

A trend has been the shift to fixed pricing instead of the "meat market" of cost per thousand impressions. But commentators agree that the biggest boost to the industry has been the measurement system run by Red Sheriff, which provides comparable data for all the major websites, including numbers of unique users and page impressions per site, along with demographic information.

Online strategist Polly Foote, of Clemenger Group, which includes ad agency Colenso, said that by measuring leaders such as XtraMSN and Trade Me, as well as sites such as nzcity.co.nz and scoop.co.nz, Red Sheriff had enabled clients to compare online with the other media.

"When it started we were so quick to point out how different online was. Now we've back-peddled and are trying our hardest to show how similar and complementary it is."

Foote said bigger ads had gone hand-in-hand with having fewer ads on a page, which was also attractive to the advertiser.

She said some clients knew about online and dedicated a percentage of their budgets to it, while others still saw it as a tactical play for a particular campaign.

Foote bemoaned the lack of an industry total that would allow even better comparisons with media such as outdoor and cinema advertising.

Generally, the present growth was at the home pages of the big sites, which attracted thousands of visitors each month, she said. But smaller sites with as few as 5000 visitors a month also interested advertisers because of their niche markets.

Foote said varsity.co.nz and nzgirl.co.nz were good examples of sites that attracted advertising, with monthly visitors between 10,000 and 20,000 - although both probably had more hits than indicated by their ratings because of undercounting at university or school computer labs.