Most will now be fairly well-accustomed to releases about rising online revenue, and Q3 2011 ticks that box again, with New Zealand experiencing one of its biggest year-on-year increases in online ad revenue since 2008, growing 27 percent year-on-year.

Total online advertising spend in Q3, 2011 was $89 million, up five percent from Q2, 2011 when it was $84 million.

Along with the rise in search and directories, classifieds were up 15 percent. But display was the odd one out with a seven percent increase year-on-year and a decrease from the last quarter for the first time since the PwC IAB report began, something attributed to the global financial situation and the Rugby World Cup effect. Still, it was just a one percent drop.

“Cross media efficiencies, online video, social media and internet access from mobile devices are some of the main factors driving this growth,” says Alisa Higgins, IABNZ general manager says.

Gazing into the crystal ball, IABNZ and PriceWaterhouse are predicting total online ad spend to grow to $398m by 2013, with online expected to increase its current market share from 12 percent to 19 percent. It expects newspapers to continue their downward slide, with expectations it will decrease to 24 percent market share in 2013, down from 35 percent in 2007 (we received a press release on the same day as the IAB results came out saying research suggested 92 percent of New Zealand business owners read a newspaper more than three times a week compared with the global average of 78.6 percent, which put New Zealand 13th out of 39 countries surveyed for newspaper readership).

Liz Fraser, IABNZ chair and general manager MSN New Zealand says the momentum is strong for annualised total online ad spend growth to reach 22 percent year-on-year.

The European financial worries impacted the largest industry category of Investment, Finance and Banking, which reduced share on display advertising by 17 percent compared to Q3 last year. The RWC brought historical Q3 spend levels forward into Q2 for some categories, such as travel and accommodation, which decreased share by 10 percent from Q3 2010 to Q3 2011.

For others, it was all about being in-market during the RWC, with Leisure, Entertainment and Media share growing 45 percent from Q3 in 2010. But the Telecommunication category dropped its share 22 percent from Q3 2010.

Search & Directories is still the channel leader with a 43 percent share of total online ad dollars, up from 41 percent last quarter.

“With the significant investment by the Government to increase access to high speed broadband across the country, the internet will be accessible to more consumers and at faster speeds, increasing the number of eyes viewing online content,” says Chris Perree, partner at PwC. “Advertisers should analyse which platforms and technologies are right for them and their target audiences; whether it be through social media pages, online video, real-time ‘geotagging’ deals, or mobile advertising within smartphone applications.”

The judges—Jon Edmonds from Touchpoint; Claire Stapleton from Y&R and Justin Jones from .99—found it a “simple idea that made them smile”. And for its efforts Special wins a crate of New Zealand wine valued at $500 including a bottle of Champagne Bollinger. Media was placed by Mediaworks TV & phdiq.

Click here to view the embedded video.

“We’ve had some notable entries this year and we’re looking forward to the last round in November,”  says IAB general manager, Alisa Higgins. ”We are currently working on putting together an annual prize and award celebration. More details along with a flash new BollyAwards site will be announced next year. In the meantime, entries close 2 November and I’m sure that box of wine will come in very handy for all those christmas parties around the corner.”

Year-on-year growth in Q2 wasn’t discriminatory with all channels experiencing surges to varying degrees. While growth in classifieds was up by 4.06 percent, display advertising notched it up slightly more with an increase of 17.30 percent. But it was search and directories that experienced the most significant growth, up 34.58 percent.

As well as experiencing the largest growth, search and directories is also the channel leader with a 41 percent share of total online ad dollars. In Q1 it had a 38 percent share of the ad dollar pie. Display has increased from 29 percent to 31 percent meanwhile classifieds was the only one to experience a decrease, dropping from a 33 percent share to 28 percent.

“With quarter-on-quarter growth of 22.94 percent, the online advertising industry is picking up pace, allowing advertisers using this channel greater opportunities for exposure. Advertisers continue to increase their focus on online technologies and re-aligning business strategies towards more innovative ways of advertising online,” says Chris Perree, Partner, PwC.

Perree ads that international events like the Rugby World Cup provide give advertisers the chance to engage with a more diverse group of viewers through multiple channels.

And don’t forget the impact mobile technology is having either.

“Mobile technology as an advertising channel has captured the attention of advertisers. People accessing the internet and social media through mobile devices could over time exceed the usual desktop access. It will be interesting to see how local advertisers capture the audience especially with the influx of overseas smartphone users attending the Rugby World Cup. Mobile social networking enables users to share, compare and contrast their experiences, views, entertainment, travel, fine dining, shopping and much more,” says Perree.

And it seems consumers are developing quiet the penchant for email and online video advertising, with both experiencing some impressive growth in the display advertising domain. Email spend rose 47 percent quarter-on-quarter while video increased by 41 percent. This is the second quarter the survey has separated out email and video spend from the total display figure.

The top display category in Q2 this year was government departments, services and communities with 15.14 percent. Investment, finance and banking followed with 12.92 percent. Leisure, entertainment and media (10.70 percent) and travel and accommodation (10.53 percent) round off the display categories.

“Online display is going from strength to strength, both globally and locally. The significant increase of brand activity we are experiencing in New Zealand is a pointer to a maturing market that is beginning to see beyond the click through rate as a measure of success,” comments APN online sales Director Donna O’Keeffe. “In the last quarter we saw a significant increase in the amount of rich media executions, particularly homepage takeovers and video formats, and a steep rise in demand for bespoke solutions and content integration.”

O’Keeffe says the emergence of new categories like Leisure & Entertainment are offering new opportunities for publishers to develop new environments and products to meet the needs of these brands.

Yahoo!New Zealand general manager and IABNZ vice chair Laura Maxwell-Hansen says two of the biggest drivers in the growth of online display advertising are an increased sophistication of display ad-servers to find consumers who show interest, and intent and advertisers realising the value of connecting with New Zealand audiences on New Zealand publications.

“Finding the cheapest possible eyeball isn’t the objective of every advertiser and every campaign, so smart marketers are also considering audience mind-set, affinity with the publisher brand and psychographic audience measurements when choosing a publisher on which to achieve their objectives,” she says.

Traditionally, Q1 is the weakest quarter and 2011 was no different. However, classifieds, normally one of the weakest channels experienced seven percent growth on Q4, 2010. There’s also some new, more specific info about display advertising in this round of numbers.

“For the first time, IABNZ requested revenue submissions to include a breakdown of video online advertising and e-mail advertising,” says Liz Fraser, IABNZ chair and general manager MSN New Zealand. ”In the past, these figures were included within the Display figure. Video online advertising came in at ten percent [or $1.9m of a total for display advertising of $19.76m] and e-mail advertising at one percent.

“Publishers know video advertising is growing, but we didn’t know how much higher the percentage would be compared to Australia and the UK, where both markets are at six percent of total display revenue. However, in the US, video online advertising is 14 percent of their display revenue. Advertisers are continuing to look for more cost-effective formats and video online advertising is one where they can enhance or replace their television schedules.”

All channels experienced year on year growth, with search and directories up 30 percent, display up 22 percent and classifieds up ten percent.

Search and directories is still the channel leader with a 38 percent share in Q1, but display advertising saw a fairly sizable drop of 19 percent from the last quarter.

“Four main industry verticals investment, finance and banking, government departments, services and communities, travel and accommodation and leisure, entertainment and media continue to represent close to 50 percent of all online display advertising spend. These industries recognised early-on that audiences had moved to online environments and now have sound campaign knowledge that they use to influence behaviour change, move brand preferences and convert sales.”

Insurance has more than doubled its growth compared to the same period in 2010, while computers, real estate and retail are all showing more than 70 percent growth year-on-year.

“So far 2011 has been a year of ups and downs for the online publishing industry. Even before the February earthquake, it was apparent that the economy was weaker in the second half of 2010 and early 2011,” says Alisa Higgins, general manager, IAB New Zealand. “On the up side, a recent IAB member survey showed most believe we will experience double digit growth with estimates ranging between 20-25 percent for the total year and between three-six percent for next quarter.”

“Online creative for brand advertising continues to develop and improve in New Zealand as marketers see the value and effectiveness with their marketing campaigns,” says Liz Fraser, IAB chair. “However, when we compare New Zealand to international markets, brands such as Lynx, Nestle and Nissan are embracing online and exploring many creative boundaries. We want to inspire local creative agencies and publishers and showcase their creative excellence, including the growing channels of online video, mobile marketing and rich media solutions.”

New Zealand is renowned as something of a creative advertising powerhouse, but digital—perhaps because of a lack of humans, a lack of budget and, up until recently, the lack of competition in the domestic telco market—isn’t such a strong point. Things are changing, however, as Kiwis fully embrace the online space and decreasing data rates make mobile internet more of a reality, but it will be interesting to see how many of the Kiwi entries can foot it with those from larger, more mature online markets.

IAB’s general manager Alisa Higgins has seen the quality of entries increase since the awards started a year ago.

“Recent IAB ad spend figures show growth of almost 20 percent for the total market year-on-year. This is a huge increase for a year that was still recovering from the recession. As more and more advertisers test the online waters, online creative is starting to be taken more seriously and not just an online execution of a print ad for example.”

The first deadline for 2011 is Friday 18 March. And it’s free to enter, so visit www.bollyawards.co.nz for an online entry form and criteria.

1) Favourite campaign that isn’t yours

Not ours, but featured on MSN.co.nz, Prime TV’s True Blood new series launch. Windows Live Messenger video sharing delivered a taste to thousands and an opt-in text reminder pinged viewers immediately prior to show time. Cheap, effective viral transmission.

2) Favourite campaign that is yours

No big, flashy campaigns over here. We already have a large captive audience (each month we are visited by 4.5 million mostly Kiwis). Nevertheless, next year we’re going to fizz up Windows Live Hotmail and Messenger. TVCs promoting new features are also in the pipeline.

3) Least favourite campaign

Perhaps I should leave this one to my more creatively-minded industry peers. As the manager of a large news and entertainment network eager to host their handiwork I’m not entirely qualified to comment. However, I might say generally that I’m no fan of campaigns that aren’t sensitive to digital environments. For example, homepage skins chockfull of text do nothing for an online audience.

4) Best brand

Ahem. You really can’t go past CAANZ Media Brand of the Year 2010. That was us. Thought I’d get that in. Though I must say Air New Zealand continues to pump out good multi-layered stuff capturing a decent share of water-cooler conversations. They seem to back it up with pretty good service delivery, too.

5) Best stoush

TVNZ and the agency commission struggle. But when are the other multi-platform media players going to follow?

6) Heroes

IAB supporters working to improve industry standards and online growth.

7) Villains

Ad networks who say they represent sites, but don’t really.

8) Most memorable marketing moment

Accidentally dropping the F-bomb on stage when I collected the Media Brand of the Year Award. Hey, I don’t get out as much as I used to.

It’s a rare and unique, beast: an entertaining banner ad. And if you didn’t see it, you can check it out here.

Judge one, James Mok, executive creative director of DraftFCB, said he saw it online and it instantly caught his eye.

“It definitely invites you to play. Good use of rich media with a clever use of technology without the technology ever getting in the way. Playful way of depicting life in business in an Orcon sort of way.”

Vaughn Davis, creative director at Y&R, said the Orcon ad started well then just got better and better. And he thought the sound was especially well done, “particularly the bloke welcoming the new receptionist.”

And John Madden, creative director of The Digital Agency and Spitfire, said it was an engaging and creative idea.

“A lot of effort has gone into it and the experience is a rewarding one. Nice to see a banner that engages and entertains.”

The BollyAwards are all about encouraging great online creative. And Alisa Higgins, IAB’s marketing manager, says there’s been a big improvement in the quality of entries since the awards were born earlier this year. Although, in saying that, no award was dished out last month as the judges didn’t think any of the entries were worthy of recognition.

“While Orcon stood out a special mention has to go to Y&R’s entry for Resene, a mobile app that caught the attention of a few of the judges,” Higgins says. “One of our judges sent me an email to let me know he was still playing with the ‘bloody Resene colour app’ and it had wrecked his afternoon due to its addictiveness.”

Y&R’s Resene app was made by Chrometoaster. And you can download the app here.

Given the recent impressive revenue numbers for online ad spend in New Zealand, it seems like a pretty good time to take the helm of an industry organisation. And it doesn’t look like slowing down in the near future. But Fraser, who has been working as head of MSN since May 2007 and held sales, marketing and programming positions at TVNZ before this, has some big plans to improve the industry and meet the IAB’s goal of making the online advertising industry the third largest medium by 2012.

“Firstly, I’m honoured. Thanks to my supporters. These are great times for digital, but they’re not without challenges. As an industry body there’s much to do. In the great scheme of marketing, digital confronts the usual way of doing things – there are fans as well as the fearful and confused. We’ve got to work harder to get more people – mostly advertisers – onboard, because so many of their customers already are. For starters, we’ll review market measurement methodologies, up the ante on communications and get behind more industry discussion.”

Fraser expressed her thanks to Trade Me’s bush-bound Gregg and also to board members Josh Borthwick (adhub) and David Barton-Ginger (NZRU).

“They and the rest of the IAB Board members have achieved a great deal over the last 12 months, in particular to help drive member value by focusing on industry events, networking and speaking opportunities, launching the creative awards (www.BollyAwards.co.nz) and continuing to provide quarterly advertising spend reports.”

Laura Maxwell-Hansen, general manager of Yahoo!Xtra, will be joining Fraser as vice chair.

“The IAB plays an important role in encouraging knowledge transfer from global and local sources, in order to better equip advertisers to run successful campaigns,” she says. “I love the pace of change and the myriad of options that drip out of the digital tap every day. It’s a great industry to support and I’m passionate about it.”

MEC worked with the publisher to create a mini-site, displaying traffic cameras in Auckland, Wellington and Christchurch for users to view traffic conditions before leaving home or work. Unlike most display advertising, the content was actually beneficial to consumers and created outstanding engagement, with an average of over seven minutes spent per unique browser.

Matt Benning from MEC says online strategy was instrumental to the overall success of the campaign as it provided a “key vehicle [badum-chish] to drive [tsk tsk] awareness and understanding of the Caltex with Techron difference”.

The DSA judges commended MEC for “excellent use of tailoring across multiple channels”. Regular judges Yahoo!Xtra’s general manager, Laura Maxwell-Hansen and Helen Baxter, managing director of Mohawk Media, are joined by a guest judge each quarter and Rachel Prince, advertising manager of the NZ Transport Agency, was enlisted this time round.

“Caltex capitalised on the ability of digital media to target key audiences when they were thinking about getting in their car,” says Baxter.

Launched in April, the awards focus on the key role media strategy plays in the success of digital campaigns.

“We were really pleased with the calibre of entries, which demonstrated clever digital thinking to address strategic issues facing each business,” said Maxwell-Hansen. “MEC, in particular, delivered outstanding campaign and business outcomes for Caltex with Techron.”

All quarterly winners are eligible for the overall Y!X DSA annual prize of $10,000 of media on Y!X plus free entry into the CAANZ Media Awards Best Use of Digital category. Entries for 2nd quarter campaigns close 16 July. And more information can be found here.

Speaking of digital competitions, entries for the Interactive Advertising Bureau’s Bolly Awards close on 3o June. And there have been a few changes made as to what can and can’t be entered.

“Bear in mind we’re looking for commercial entries here,” the IAB says. “There are other awards and opportunities for charitable work, student portfolios or great stand-alone sites or microsites, but at the IAB NZ we’re focused on growing online advertising revenue in New Zealand. We believe one of the ways to do this is to showcase great work that has been bought or sold on New Zealand websites or through New Zealand entities.”

On the same day entries for the Bolly Awards close, the IAB will be running the Automotive Online Marketing Trends in 2010 seminar. Graeme Perry, strategic & corporate affairs manager for Kia Motors New Zealand, will share the details behind Kia’s sales success in 2010 and how online has been a big part of it. And Michael Gregg will also wax lyrical about the importance of online for the automotive industry.

You can find out the wheres, whens and how muches here.

Sponsored by www.adhub.co.nz, the event features Josh Borthwick, managing director of Adhub on the online opportunities that are available and why certain brands are strong online; Ryf Quail, general manager at Carat, on why marketers should invest more in online media;  Jimmy McGee, head of commercial at Trade Me on how marketers can effectively use classifieds; and Mark Roper, marketing manager for Sanitarium, along with Alysha Buckley, general mannager of PHDIQ, Sanitarium’s digital media agency, with a case study of the brand.

Interactive ad spend share breached the 10 percent threshold for the first time last year. And, if the trends in overseas markets are to be believed, it’s only going to increase.

At present, though, the IAB says many categories in New Zealand are massively under-represented in search, display and social media advertising; many brands are tipping a much smaller percentage of their advertising spend into online than the percentage of media consumption from their customer; many brands are failing to track, revise and update their creative approaches to online advertising in a timely (daily!) manner; and many brands are failing to fund their media executions appropriately to maximise the long-tail opportunities for their brand to be at every point of customer engagement online.

So, if you’re a director, manager or professional in charge of in marketing, search engines, marketing and communications, digital marketing or online media, it obviously pays to be at the head of the pack.

The event takes place at the Juice Bar in Parnell next Wednesday 19 May. And you can buy tickets here. IAB & ANZA members pay $65 + gst ($73.13 incl gst) and non-members pay $95 + gst ($106.88 incl gst).