Online clicks with advertisers

THE ONLINE ADVERTISING MARKET HAS FLOURISHED OVER THE PAST 12 MONTHS.

CAN GROWTH BE SUSTAINED IN AN INDUSTRY ALREADY LADEN WITH ADVERTISING OPPORTUNITIES? DANIELLE LONG FROM ADNEWS MAGAZINE INVESTIGATES.

The Online Industry in Australia has come of age. The release of the Online Advertising Expenditure Report earlier this year con­firmed what those in the industry already knew - online ad spend is on the rise. In 2003, the category increased its share of the total ad wallet by 41% to total $236 million, putting it well and truly in amongst other major media categories. The increasing penetration of broadband and a growing Internet population that now stretches far beyond the 18 to 35-year-old mar­ket is proving an attractive offer to growing numbers of marketers. All of a sudden everyone is talk­ing online. Interactive agencies are picking up more business and tradi­tional agencies are scrambling to relaunch, revamp and beef up their online, interactive and digital offer­ings to meet demand. This month GroupM which includes MindShare, Media­edge:cia and Maxus, relaunched its digital division as mOne to expand its digital services to one-to-one communications. Wunderman also announced it had enlarged its interactive department, adding 14 staff in addition to a new interac­tive director and CD after a num­ber of new business wins. Last month BMF pitched against interactive agencies to win the Austar online business. The increased activity within agencies confirms the growing confidence in the role online advertising is tak­ing as agencies bulk up their staff to cater for the growth in business.

 

WHAT THE MEDIA THINKS

 

"I believe we have seen a pretty fundamental change in the mar­ket that can be greatly attributed to a change in marketers' attitude to online," says Stuart Simson, chief executive of online media company emitch. "We are now

seeing online advertising going to quite a new level and I see no, I repeat, no reason to believe this won't continue." In January, emitch partnered with Roy Morgan Research to fore­cast growth in the sector for 2004. The research predicted the category would increase from 4% of total ad spend in 2003 to 6% in 2004, while the number of advertisers using online was expected to grow from 57%, in 2003 to 66% in 2004. "The online market started to show quite significant increases mid-way through last year and continued through to the end of the year. In January we released a survey with Roy Morgan which predicted significant increases this calendar year in the online space. So far this year it has transpired, we have definitely not seen any less­ening of growth," says Simson, who predicts more of the same in the next fiscal year. "What we keep seeing is quite significant growth rates which, in my view, go beyond any cyclical upturn."

 

WHAT AGENCIES MAKE OF IT

 

One advertising agency that can attest to the recent growth in the online market is The White Agency. The Sydney-based online agency recently celebrated its first birthday and with it toasted a promising future.

In the agency's first year of oper­ation it has doubled in size from four to eight people and secured a number of significant accounts including Telstra BigPond, Homescreen, Seek Communi­cations, Heritage Fine Wines, ING Bank, ING Foundation and ING Direct. General manager and founder Elizabeth Joyce, who started the agency with co-founder and busi­ness director Craig Calvin, says the agency's strength has been in its independent full service offering.

"It's a big challenge being no one in the industry and getting into see people," says Joyce. "We've built a full service independent online agency with absolutely no help. We have achieved growth and picked up business on our own credentials. We've retained all of our clients and are confident we will continue to grow." Joyce says she is unsure whether the agency has succeeded due to the strength of the market or because the agency itself has been an important player in driving the market to this level. "It's hard to say," she says. "The Internet is absolutely in an upswing and we are thrilled to see it moving forward and to be moving forward with it." Joyce is thrilled that clients are no longer "shying away" from online and says people are becom­ing aware that online isn't all about "clicks and conversions" but that the medium can be used as a gen­uine brand-building tool. "There is a growing excitement in the industry again, the confi­dence is back in the market. Online is becoming more competitive as more clients get back into it and this is making the market more challenging and much more inter­esting," says Joyce.

 

WHAT AGENCIES MAKE OF IT

 

Ninemsn is well aware of the increased interest from marketers and agencies in the online market. Next month the online portal will host the first Australian Digital Marketing Summit and already the event is generating huge interest. Ninemsn director of digital sales Jason Scott says online marketing is now on the minds of most agen­cies and their clients.

"It makes my job much easier. I don't have to kick on people's doors anymore, the doors are open and people are interested in listen­ing to what we've got to say. Life in online has changed dramatically," says Scott.

Ninemsn decided to host the digital marketing summit to alert marketing directors and agencies to the opportunities in digital market­ing and online advertising.

"Online advertising has reached the point that if brands aren't including it in their mix then they are missing out on opportunities. We hope the summit will help demystify the online market for those marketers and help them understand why it is critical to use this medium and show them how to do it," says Scott.*

Republished courtesy of Adnews Magazine 16th July 2004