It found that despite a tightening economy, total online advertising was up 22.3 percent on the same quarter last year, with all categories of online ads showing double-digit growth when compared to spend levels for Q3 in 2007.

“Online advertising spend has experienced strong growth in 2008, particularly when considered in the context of recent economic conditions,” says Chris Perree, a partner at PricewaterhouseCoopers.

“This is indicative of the appeal of interactive advertising, where advertisers have the ability to quickly gauge the market response and act accordingly.”

Search & directories advertising increased most significantly, up 34.4 percent on Q3, 2007.

But online display ads (up 24.0 percent) and classifieds (up 14.0 percent) also showed strong increases.

Mark Evans, CEO of the IAB, says there is evidence to suggest that the economic downturn might actually increase interactive advertising’s share of total ad spend.

“Internationally, indications are that the economic downturn is actually resulting in the shifting of more advertising budget online,” says Evans. “Online advertising provides greater measurability for response-driven advertising, faster response, and the ability to tweak and tune campaigns easily.”

Evans says if New Zealand follows overseas trends, he expects search & directories advertising, in particular, will benefit from the economic downturn.

“When times are tough, companies are single-mindedly focused on generating sales and this tends to drive up demand for paid search campaigns that deliver leads through the door,” he says.

Locally, however, display advertising showed strong quarter-on-quarter growth in the latest IAB survey, up 5.5 percent on Q2, 2008, which Evans suggests is a sign that marketers are starting to move more of their brand advertising budgets online as well.

“Online advertising’s reach gives advertisers a cost-effective channel to deliver brand messages to their audiences in a way that is new and engaging. And advertisers are increasingly turning on to the interactive nature of online advertising,” he says.

Evans says locally, trends are mirroring those seen overseas.

“Year-on-year growth continues at pace in New Zealand,” he says. “This quarter things have slowed a little from the type of hockey-stick growth curves we’ve been seeing as people stand back and take stock of what’s happening globally, but we’re still expecting strong growth to continue into next year and beyond.”

The New Zealand IAB’s equivalent body in the US, also called the Interactive Advertising Bureau, reports internet advertising revenues in their market reached almost $5.9 billion for the third quarter of 2008, representing an 11 percent increase over the same period in 2007.

“The growth of interactive advertising that we’ve been experiencing over the past few years has stabilised due in large part to the difficult current economic climate,” says Randall Rothenberg, the US IAB’s president and CEO.

“Interactive advertising continues to be the most measurable and costeffective way to reach consumers, and we see more and more marketers seeking to harness its power,” he said.

David Silverman, a partner at PricewaterhouseCoopers in the US, added that, “a weakening economy will continue to be a challenge to all forms of advertising-supported media. However, the Internet should be better poised to withstand the storm given its ability to combine performancebased advertising along with broad-based branding.”

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