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Media Intelligence : July 2007
at risk, so it becomes more important to know where the market is going, what the options are and which of those options will give the best value for money. Online advertising is on the rise in Australia According to the latest "IAB Online Advertising Expenditure Report", the total amount spent in Australia on online advertising last year was AU$1 Billion, up from AU$620 million dollars the year before. More recently, in the rst quarter of 2007, advertisers spent AU$294 million advertising online, split by display advertising, classi eds and search directories. Display advertising represents 26% of this spend, or $75 million. (see chart 1) Allan Dib, managing director of Nielsen// NetRatings Australia, says: "Many people have predicted the death of display advertising online, but we are not seeing this. Rather, the ways in which online advertising is used have grown, with many advertisers beginning to use display advertising for brand campaigns and not just for its traditional use: driving call to action. We are also seeing an increase in the number of advertisers that are including display advertising in their overall media plans over the past 12 months." (see chart 2) According to Dib, the internet is making it possible for products that are in low demand or have low sales volume to collectively make up a market share that rivals or exceeds the relatively few market leaders, if the distribution channel is large enough. We are seeing this phenomenon, called the Long Tail Theory, impact advertisers decisions on where to spend their advertising dollars. A comparison of year-on-year results shows an increase in the share of online display advertising for smaller, more niche sites. "Traditionally it has been very di cult and costly for low-reach media titles to have third-party audited measurement. But this is not the case with websites. We are regularly being asked to measure internet tra c for niche websites and include these results in our ranking tool, Market Intelligence. This makes it much easier for these relatively small sites to approach advertisers and agencies for media dollars," Dib says. (refer chart 3) DIFFERENT MEASUREMENT TECHNIQUES The success of online advertising relies heavily on an advertiser s knowledge of the market, its key players and audiences, seasonal and geographical variances, and the competitive situation. There are a number of tools that will help advertisers assess the opportunities and risks in the online media space and ultimately optimise the brand s online advertising media e ciency. There are three principal ways to measure internet usage: • Marketers can monitor how visitors interact with a speci c website (site- centric) • A panel of users can be measured (consumer-centric) • Or data can be collected directly from ISP networks (ISP-centric). Like with all research, there are key bene ts, features and challenges with each of these approaches that need to be considered when using this information. Site-centric There are two main site-centric methodologies, log-based and browser- based measurement. Log-based measurement is derived 50 MediaTitles Measuring online media INCREASE IN ONLINE DISPLAY AD EXPENDITURE FROM 2002 TO 2007 Source: IAB Online Advertising Expeniture Report, May 2007 Source: Nielsen// NetRatings AdRelevance, Jan 06--May 07 Chart 1: Chart 2
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