“Trading targeted impressions in real-time, based on real insights and data, about individual browsers, is very powerful,” she says. “The right message to the right consumer at the right time for a market price.”

Fraser says it’s not really competing with the ad networks like AdHub, 3DI and TPN and says it’s aiming to take on Google’s Double Click Ad Exchange by selling the inventory, including display inventory across Windows Live, under the Mi9 umbrella (in addition to msn.co.nz and Windows Live Hotmail, and Messenger, it comprises more than 40 brands including Bing, Skype, Xbox, MSDR performance advertising network, and large third-party sites, including Ticketek, Hoyts, Menumania and Everybody).

She says the inventory pool will grow to include msn.co.nz, msn network partners, and other premium local online publishers.

“Third-party premium inventory is a key part of the Microsoft Advertising Exchange strategy. The bigger the premium inventory pool the greater the opportunity for advertisers to reach their desired audience and drive better ROI … Our aim is to be the largest local source of premium inventory in the RTB landscape. Besides our own publishing properties, we will partner other high quality inventory sources. But we have to offer brand safety, so publisher inclusion isn’t automatic.”

There is some contention over the auction process and what that means for publishers. Some industry pundits believe ad exchanges reduce CPM rates and online inventory yields, but Fraser says overseas experience shows publishers achieving higher yields on their inventory and agencies and advertisers recording improved return-on-investment on their campaigns.

“It’s important to understand yield management in the context of Ad Exchanges,” she says. “RTB is designed to elicit the highest bid on an impression-by-impression basis. Views about downward price pressure stem from earlier incarnations of exchanges that lacked RTB. We also layer intelligent price flooring and yield management features, using insights from our network and other advertising assets to drive higher yield for publishers.”

Given New Zealand’s relatively smaller percentage of ad expenditure online compared to US and European markets, Fraser expected relatively slower uptake of RTB.

“New Zealand has over 2 million online users and today generates approximately $300 million online ad revenue. In terms of the revenue to audience ratio, New Zealand lags behind other global markets. We think Microsoft Advertising Exchange [which was rolled out in the UK, the Netherlands, and Australia earlier this year] will be a catalyst for rapid growth.”

MSN is also set to launch its Microsoft Media Network (MMN), a new advertising platform offering 16,000 behavioural targeting segments. MMN will sell inventory (both from MSN sites and third party publishers, including competitors) to advertisers, who can buy online advertising based on past audience behaviour.

“The right content pulls a crowd, but publishers want data that offers a more vivid picture of target audiences. More than knowing the kind of people they’re talking to, advertisers want a current picture showing what people are doing online, so they can target more receptive eyeballs and improve performance. Behavioural targeting is the way to do it.”

There’s been a bit of controversy over behavioural targeting and the use of cookies recently, mostly, Fraser says, from publishers. She says the new age of data centric advertising adds new gravity to transparency and provisions for visitors to opt in or out of having their information collected for the purpose of behavioural targeting. But, as long the data isn’t personally identifiable and doesn’t jeopardise consumer privacy, she says consumers aren’t opting out because it presents more relevant advertising.

The other big shift for MSN is in the fight for eyeballs, with MSN adding new partners and local production to its news offering.

If you listen to Nielsen’s market intelligence figures, the top five sites in terms of average daily UBs for domestic audience are TradeMe, Yahoo, Stuff, MSN and nzherald.co.nz (unlike Yahoo, Fraser says MSN’s figures don’t include email). But according to Comscore, MSN New Zealand reaches a unique audience of 2.5 million (or 85 per cent) of New Zealand’s total online audience (Fraser says the fact that Internet Explorer users have msn.co.nz as their homepage doesn’t make much of a difference).

The news portal, which launches in December, will include an expanded team of eight MSN news producers and a freshly minted partnership with Australia’s news service AAP, which set up a NZ outpost when NZPA departed. This relationship effectively replaces its relationship with nzherald.co.nz (nzherald links took MSN news visitors—approximately 200,000 UBs per month—to a MSN/nzherald co-branded website).

Fraser says there will also be a broader cross section of international news from MSN New Zealand partners ninemsn and MSN worldwide and a partnership with TVNZ for video news continues.

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.”

Nielsen’s Warren Gilmer said the comparison was made to September last year when the All Blacks would have been playing to account for any seasonal differences with March.

The top three websites in the sport category for domestic traffic in September continued to be stuff.co.nz/sport, nzherald.co.nz/sport and yahoo.co.nz/sport. And Gillmer says all three sites, along with tvnz.co.nz/sport and allblacks.com showed exceptional growth compared with the last sports category release six months ago.

Traffic on nzherald.co.nz across the website, mobile sites and apps increased by 28 percent overall and the time spent on site lifted by 7.4 percent for the tournament.

Visual and interactive content played a massive part in the event coverage. Time spent watching and video consumption increased 22 percent and 114 percent respectively, with 3.7 million video views throughout the 47 day period. Video highlights from every single game were popular, as was some of the more light hearted content like Sonny Bill’s wardrobe malfunction or the Lego re-enactments of key All Black moments.

Photos were also very popular with 2.6 million gallery views throughout the Cup, an increase of 107 percent. Unsurprisingly, the most popular images of the tournament on nzherald.co.nz were of the All Blacks celebrating the win.

Fairfax had not responded to requests for information before posting.

InGame director and NZ Game Developers Association chair Stephen Knightly, who spoke at a gamification event organised by the Social Media Club Auckland this week, says “shallow” gamification has become popular, with points, badges and leaderboards being added aimlessly onto all kinds of campaigns.

There’s plenty of “detailed, intelligent” IP behind game designers, but he says too many marketers are simplistically copying elements of gamification and doing a poor job of it.

“One of the traps that I see gamification people falling into is that they forget the audience,” he says. ”Different people play games for different reasons and in lots of different ways. If you put lots of points on something that’s going to be great for hyper-competitive people. If you put on sharing and gift giving that’s going to be great for social people but it’s not going to be great for someone who want to beat someone else and kill someone else.”

According to Hidden Variable Studios cofounder Charley Price, there’s a major debate on the merits of intrinsic versus extrinsic rewards.

Some believe the quality of a gaming experience is dependent upon the promise of ‘goods’ (real, virtual, or otherwise) provided to the player as a reward while others argue the focus should be on making high quality games first, with tangible rewards secondary.

“To properly ‘gamify’ something, the process should ideally have something inherently compelling about it to begin with, and then your gamification layer should amplify and celebrate that facet of the experience. Too often, I think gamification is executed by slapping points onto a process and expecting people to engage,” he says. ”Making a compelling, large-scale, asynchronous multiplayer game is hard, but if you don’t approach it with that challenge in mind, you run the risk of making an experience so shallow, unfocused, or – even worse – commonplace, that no one will really invest.”

Mitch Olson, co-founder of social game SmallWorlds, says there is an inherent element of psychology at work.

Gamification is ultimately about using game concepts to build engagement with an audience and reward them for certain behaviours, he says. And while UX designers might be more inclined to remove elements from a screen, Knightly says game developers are just as likely to add more buttons and gizmos.

These give users more reason to engage and to spend more time on a game, he says.

“Complexity can be your friend.”

This post originally appeared on idealog.co.nz.

There are a number of reasons why finding something on a page can be hard work: navigation options might be buried in complicated menus, the information can be hard to understand, or the design of the page can be visually noisy.

Conducting user testing helps us understand what the problems are. But while watching people interact with a website can tell that something is not working, we can’t always tell why. Every now and again we’ll report that participants didn’t “see” something. But how do we know whether users literally didn’t see a button or a link? Could it be they saw it and ignored it because they didn’t know what it would do? The answer is that we don’t always know.

This is where eye tracking comes in. Tracking eye movements using sophisticated sensors allow us to tell exactly what people are looking at.

For example, if I am looking at a Where’s Wally picture, researchers can follow my gaze as I go hunting for him. After I find him, they can analyse my eye tracking data to reveal which paths I used to track him down and in which sequence. They can also see which faces and objects in the crowd catch my attention and where I centre my search. Then, after watching more people look for Wally in the same picture, they can analyse the patterns and understand how people generally view the image.

These eye tracking patterns can tell you a lot about the state of your page design. Here are the gaze paths of two users looking at the xero.co.nz homepage for 25 seconds. Each dot on this screen represents a step on the visual journey across the page:

The users gaze moves systematically from element to element. Both users start their exploration on the logo and the key message, before their attention is drawn to the large image on the right. Then they see the elements further down the page, maybe looking for keywords of personal relevance.

This design works well. The important stuff looks more important, and things that are related logically are also related visually (we call this having a clear visual hierarchy). In other words, the design leads the user’s eye through the page.

Compare this result to the gaze plot of two users on telstraclear.co.nz:

The plot is less systematic. Like on the Xero homepage, users start looking at the large picture at the top, but then their gaze scatters, moving back and forth between various elements. Perhaps most disturbingly, their attention is drawn to an orange banner that implies that they may have trouble calling TelstraClear. In 28 seconds, the main navigation (the purple box on the left) is hardly noticed at all.

This is a definite Where’s Wally scenario. Instead of quickly getting an overview of what TelstraClear offers, users have to dig through a pile of visual clutter.

Eye tracking can tell interesting and sometimes surprising stories about your users’ unconscious interaction with a website. Understanding where people look and in what order can reveal insights that no other research method can. However, the real strength lies in combining these stories with the user’s verbal and non-verbal responses, including their comments, body language and facial expressions. This combo will help ensure that your website visitors can always find Wally.

• Want to do eye tracking on your website? Email Annika.Naschitzki@optimalusability.com.

Click here to view the embedded video.

Click here to view the embedded video.

The online campaign, which was created by Air New Zealand’s international agency Albion and Flying Fish, is similar in tone and weirdness to Rico’s innuendo-filled guest spots and interviews, which were often conducted on the Economy Sky Couch. And while many struggled to understand the connection between a furry lothario with a poor grasp on English and a Kiwi airline, Rico haters—and cheeky Aussies—will no doubt be pleased to see the conjoined ovine twin spokesbeast at least has more of a connection to the country this time.

When Rico went live, there was an uproar from one side of the ledger about a brand that was ‘losing its way’ with overblown and ill-thought out marketing. And on the other side there was much clicking of YouTube links and like buttons from those who loved the humour and appreciated the fact an airline was trying something different to garner attention.

Air New Zealand’s response to the barrage was that it wasn’t targeting domestic customers. As a tiny airline without the marketing budgets of its international competitors, it needed to get noticed with earned media, which kicked off the perennial debate about whether it is worse to be noticed for the wrong reasons or not noticed at all.

No doubt the same debate about Air New Zealand jumping the shark/sheep will continue with this online campaign, but whatever you think about the creative, kudos where kudos is due: Air New Zealand and its local agency .99 are among a very elite group of Kiwi brands and agencies that know how to run a successful viral campaign.

The redesign, which was completed by its in-house interactive and graphic design team and was around one year in the making, went live yesterday and manager of global online sales Kim Walbridge says it was well overdue.

The changes will make it easier to find special offers and deals on everything from flights to campervan rentals and its global sites will be similarly refreshed in a phased programme over the coming six weeks. While user experience can be a differentiating factor for many brands, he admits customers are often willing to put up with a lesser online experience if they can save money on their flights, as evidenced by the continuing popularity of Jetstar, but he says the new website is indicative of Air New Zealand’s desire to be seen as more of a premium offering that has its customers’ interests at the centre.

“Our websites are a critical sales channel so a huge amount of thought has gone into making the planning and booking experience as seamless as possible,” Walbridge says.

45 percent of visitors to the site go straight to the booking engine, so it is still the most prominent feature on the home page, which has navigation tabs to related products and promotes the best retail deal of the day.

“We’ve done some cool stuff, such as providing a two-month calendar helper that makes it a lot easier to select the correct travel dates and much harder to enter wrong information.”

All of the tools designed to help people seek out the best deals are clustered into a ‘Finding our Lowest Fares’ page, including a new low fare alert service. This allows customers to enter a preferred origin and destination, specify the price they’re willing to pay, and receive an email alert whenever the fare price drops below their nominated threshold.

Walbridge says this initiative was especially designed to appeal to those customers who only wanted to hear about specials on select routes.

So far, he says the response has been 99 percent positive, which, as the moaning about ‘New Facebook’ shows, is quite an achievement for such a big overhaul. There are, as expected a couple of glitches, and some changes required to the MyAirNZ portal, but he says they’re easily remedied.

“Our ‘When’s a Good Deal’ function has also proven really popular with customers who have a certain destination in mind, but want to know when it’s cheapest to fly there. Type in your preferred destination and you’ll be shown a range of options for up to six months, from the cheapest weekend to the cheapest week to travel.”

The website refresh also makes it easier for customers to book non-flight related products such as accommodation, travel insurance, rental cars, taxi transfers and campervans, which is an increasingly important revenue stream for airlines in this very competitive market. Special deals for all types of travel related products are now grouped by destination so they’re easy to see on the one page. Click on Australia and you’ll see everything from accommodation and car deals to flight deals across the Tasman.

There’s also a ‘How Can We Help You’ search function on each page that customers can use to quickly locate information, an enhanced FAQ section and a travel alert bar that can be used to advise passengers immediately of travel-related issues such as expected weather disrupts.

As for the digital accolades, www.barkersonline.co.nz has worked with ecommerce specialists Solutionists since 2007 to deliver and enhance their website, and it will be up against five Australian companies, including Dick Smith, in the Best Multichannel Retailer category at the ORIAs.

“Online customers expect to interact with a physical branch and the online store in the same way,” says James Gilbert of Solutionists. “Loyalty status, promotions, stock availability all need to be integrated seamlessly across all outlets. Integrating the webstore with the retailer’s point of sale software provides the ideal customer experience with no extra work for the retailer.”

“The website has consistently performed above expectations for us at Barkers,” says Barkers online manager Duncan Greive. “We have experienced four consecutive years of sales growth, to the point where the website turns over enough to match a medium-sized retail store. On our periodic VIP days, when our company can do a phenomenal amount of trade in 24 hours, the website is often the top performing store in our arsenal. Visits are up five percent over the previous year, and we have increased our average transaction value by 21 percent in a climate when many retailers are struggling to hold in this area.”

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.

• Download the full report here PwC and F&S Retail Report

Online retail now accounts for 5.1 percent of all retail sales in New Zealand, which puts us on a par with Australia. We’re still well behind markets such as the USA and UK, however, where online now accounts for 7.5 percent and nine percent respectively.

“Online shopping, both locally and offshore, is expected to show strong growth over the next four years, reaching $4.22 billion by 2015,” says Frost & Sullivan senior research manager Phil Harpur. ”This represents a compound annual growth rate (CAGR) of around 12 percent.”

82 percent of online shoppers indicated they would increase or at least maintain their current level of online expenditure in the next 12 months (compared to 86 percent in Australia) and more than a third were using smartphones or tablet devices to buy products online.

“New Zealand’s retailers are now competing on the global stage and need to embrace the fundamental shift in underlying business models caused by the digital revolution,” says PwC New Zealand retail partner Julian Prior.

“As online retailing continues to grow, some retail sectors are more at risk than others,” the report says. “Retail sectors that are non-food are more vulnerable to offshore online retailing and these include clothing, footwear, gaming, books, magazines, recreational products, cosmetics etc.”

The study showed New Zealanders have particularly high adoption rates of social media, with 81 percent of online shoppers in New Zealand using Facebook within the last year, compared to 76 percent in Australia. Added to that, more than a third of all online shoppers in New Zealand currently follow an online shopping site on Facebook, compared to 26 percent in Australia.

Group buying sites are also becoming increasingly popular in New Zealand, with nearly half of online shoppers having used a group buying site in the past year.

There’s been much wringing of hands and gnashing of teeth from aggrieved bricks and mortar retailers about the ability online retailers have to undercut their prices and the fact that many purchases don’t attract GST. The report says one third of all online sales were expected to go to offshore retailers, but ”while price and range remain the key drivers for growth in overseas online shopping, very few respondents (<1%) cited that they shopped overseas to avoid GST. Our survey findings indicate that the price differential between local and overseas retailers is far greater than the 10 percent rate of GST imposed locally”.

Of course, it’s not just about buying: 95 percent of online shoppers in Australia searched the web for product information, price comparisons and peer reviews before making a purchase online and over 65 percent of in-store purchases are initiated on the web.

In a special section in its monthly economic indicator report, the Treasury said the internet was coming of age economically and was unleashing its power at the right time during a retail downturn. Online competition is also likely to lead to lower inflation over time, it said.

“Consumers’ ability to find bargains will drive a competitive response among firms … As a result, someone, somewhere on the internet is bound to be having a sale.”

Treasury said a survey by Australia’s Macquarie Bank showed the number one reason for online shopping was price (55 percent), more than double the next reason (convenience at 25 percent). “One can assume that New Zealand online shoppers share similar preferences.”

Click here to view the embedded video.

Despite all the hype around all things digital, however, there’s still a long way to go before it infiltrates some of the the more traditional business areas, as evidenced by a recent MYOB study that showed less than a third of Kiwi businesses have a website, and the vast majority of those without had no intention of establishing one.

“The general lack of an online presence by the large retail chains in New Zealand and in Australia over the last decade has been a significant factor for a relatively poor uptake of online shopping within this region,” Prior says. “Retailers that are able to engage customers through multiple channels will build a deeper relationship than through a single traditional store channel.”

According to Statistics New Zealand, the highest percentage of online purchases are made by the 25-44 age group.

“Interestingly, the 15-24 group’s third ranking is unlikely to be due to low internet skills, but rather their lower purchasing power and also because many may not possess a credit card for online purchases,” Treasury said. “Visa debit cards may mean this last factor is less of a constraint in future surveys.”