Local AltaVista site awaits keen Kiwis

By DITA DE BONI marketing writer

The parties behind a recently launched local version of one of the world's largest internet search engines are confident New Zealanders will flock to its services, bringing advertisers along with them.

AltaVista.co.nz, the provincial offshoot of AltaVista.com - one of the world's top three internet search engines in terms of size and reach - has just turned six weeks old, and the brand's international development director is here on a flying visit from the UK to check on the latest addition to the company's localised searching clan.

Martin Keogh admits a regionalised site is a grab at the local advertising dollar. New Zealand companies are not inclined to advertise on AltaVista.com because of the huge cost in American dollars of doing so and its lack of focus for New Zealand users.

Companies like AltaVista have therefore taken their brands to a host of countries, including Australia and New Zealand.

Mr Keogh doesn't buy the argument that many local advertisers are yet to be enamoured of online advertising, and are sceptical of the medium's debatable powers.

He says that while online advertising has slowed, it is in no danger of dying anywhere. AltaVista.co.nz is already the second most popular site visited by locals, behind category leader msn.co.nz, Microsoft's local website. And he is confident Local advertisers will find value in advertising with the portal.

Of its advertising revenue so far, the company says it aims to get "out of six figures into seven within 12 months."

But undoubtedly the market overall must grow before AltaVista realises substantial profits. New Zealand still lags behind most of the internet-using world in quantity of online advertising in a market worth $US326 billion worldwide in 2000. That market, which had grown by almost 7 per cent between 1999 and 2000, is forecast to grow a further 4 per cent in 2001.

Asia Pacific represents $US60 billion of that vast total. But while almost a third of New Zealanders are connected to the internet, local advertisers have largely ignored the medium.

Online advertising represented 4 per cent of all advertising in the US in 2000, 2.5 per cent in the UK, 1.5 per cent in Australia, and a paltry 0.5 per cent - around $7.5 million - in New Zealand.



"We've been looking at what we can do to help bridge the gap between usage and advertising," says Mr Keogh, who collaborates with local site administrator Webmasters Network, owned in turn by new media shop Brave New World. The parties claim local advertisers are right behind them.

Much of the support comes because of a substantial user hit rate of around 40,000 local searches each day. But in fairness, the local site need not work hard to divert users of the dotcom site to dotco.nz - any New Zealand user is automatically diverted to the local engine.

Any argument that users generally prefer a dotcom search engine to a specific country engine is therefore moot.

"Yes, we wouldn't get there as quickly without that feature," admits Mr Keogh. "But there are other things we offer that make it worthwhile for locals. We think it is important for local advertisers to have a say in the site and also, that they can now afford to advertise on a site with such fantastic brand equity."

Also offered, according to the administers, are some tricky techniques designed to ignite interest with advertisers who may be feeling jaded about banner advertising. As the great banner advertising debate rages - with some research claiming a minuscule 1.5 per cent in click-through rates on banner ads against others who proclaim the medium's huge branding potential - AltaVista.co.nz is offering a fair swag of house specialties.

One is called an "intercept." When the user types a word into the search engine - "netball" for example - an "intercept" appears on top of the normal search results. The intercept is actually an ad, with a small logo flush left and some key words that link back to the advertiser's site.

The words look remarkably like a search result. AltaVista claims a 4 per cent click-through using this tool.

Mr Keogh admits that this type of tactic blurs the line between content and advertising. But a prominent ranking in any search engine's results is a complicated art that also "markets"sites that want publicity.

AltaVista does not accept payment for rankings but does derive a small proportion of its revenue from allowing people submitting sites to "jump the queue" by having their sites investigated quicker.

Skyscraper creatives are another offering, with banners running the length of the web page on the right hand side.

An 8 per cent click through rate is claimed with these ads, settling back considerably when the novelty effect disappears.

"Specialist search centres" are category headings which look like directories but take users through to just one branded product or service.

At AltaVista.co.nz, an "employment" heading links through to the seek.co.nz website. This space is sold at a premium and only one in each category admitted.

Mr Keogh says AltaVista is not complacent about local competition or competing major sites that may also launch local search engines.

Looksmart has a local portal, Yahoo has long had an Australia/New Zealand search section and Lycos is "coming soon," with more bound to follow the trend, Mr Keogh says.

AltaVista has pursued local search engines not only as part of a general trend but also because of recent financial problems caused by leaping out of its core, search engine service offering.

The US-based company - owned by internet holding company CMGI and Compaq - found it could not sustain itself after beefing up content on the site, spending $120 million on advertising campaigns and attempting to compete with behemoths Yahoo and Microsoft to become multi-media companies.

It ended up laying off 25 per cent of its staff, scotching a scheduled public offering of 14.8 million shares, and retrenching back into what it knew best - search engines.

Altavista.co.nz