Ad spending reflects NZ online move

The Advertising Standards Authority says newspapers' share of the advertising market fell 7.3pc last year.

If measuring website traffic is an inexact science, at least it's easy to find out where New Zealand advertising spending is going.

Last year, newspaper, television, radio and magazine advertising all went down. The biggest loser was newspapers, according to data collected by the Advertising Standards Authority. Their 2008 revenue fell by $66 million and their advertising market share went from 35.4 per cent to 32.8 per cent during the year, a 7.3 per cent decline.

The combined television, radio and magazine revenue fall was a more bearable $21 million.

Where it's gone is plain to see. A surprisingly small amount, given the recession, vanished from the market - overall spending was down just $18 million on 2007, at $2.32 billion.

Almost two-thirds - $58 million - of the money given up by the print and broadcasting media has gone to the internet. Interactive media, says the authority, made $193 million from advertising in 2008, accounting for 8.3 per cent of the market. If anything, says Greig Buckley, head of the Interactive Advertising Bureau NZ, that's lower than the true figure.

"We're certainly tracking the right way. Advertisers' dollars follow where people are, and you can argue till the cows come home about how long they're there for or how many are there, but there's no doubt more of them are there and they're there more often."

Buckley thinks poor audience data quality might be holding back online advertising spending, but only slightly.

"The data is way better than other media, yet agencies are happy to spend blindly on the other media."

In the New Zealand setting, how is website traffic counted, and could it be done better?

The crudest data is collected by website publishers themselves and clearly can't be relied upon because it is not independently verified.

Nielsen//NetRatings, from Nielsen Online, provides independently collected website traffic numbers, but only for publishers who subscribe to its service. Those numbers are linked to demographic data obtained from people who fill out an online survey.

Hitwise, meanwhile, trades in raw numbers it obtains from internet service providers. Those numbers tell it how many visitors - like Nielsen, the currency is computers, not people - browsed a site, where they came from and where they went next.

Nielsen used to have a panel of New Zealand internet users whom it would pay to collect browsing data from, but it has been discontinued.

Buckley says his organisation's Australian counterpart has established a measurement council in an attempt to refine online audience measurement. Its aim is to merge browser traffic numbers from a range of reliable sources with panel data.

In the end, though, he's not sure the numbers matter all that much.

"One of my beliefs is that the demographic profile of a site is arguably less relevant than understanding the content environment.

"It's a bit like a magazine. If you're planning a magazine campaign, it's not rocket science. If you're a good media planner, you'll have a good feel for what sort of people read that magazine, just as you do with who goes to a particular site.

"You have to balance that against any demographic information you have."