Advertisers, agencies and publishers are optimistic about the role of the internet as part of the overall media mix, with the majority of agencies (90 percent) agreeing that “the Internet will be a vital component of my company’s marketing strategy over the next three years”.

This is one of the findings of a Roy Morgan Research Internet Advertising Intentions and Attitudes survey conducted in association with Auckland online media-buying shop the Internet Bureau.

All advertising agencies surveyed embraced the internet, with 100 percent of those polled having placed advertising online in the past 12 months. This is a 3 per cent increase from last year.

The latest survey found that general online advertising continues to be the dominant online advertising form. Advertising agencies surveyed allocated 15 per cent of their advertising spend to online advertising in 2006.

This is up 7 per cent from their reported allocation for the 2005/06 financial year. This strong trend is forecast to continue, with advertising agencies reporting that they will invest close to 18 per cent of their advertising dollars online during 2007.

The number of advertisers who intend to use internet advertising is also expected to grow. Fifty-four percent of advertisers surveyed used internet advertising in 2006, compared with 62% who intend to do so in 2007.

General online advertising, which incorporates banners, tiles and the like, continues to attract the lion’s share (62 per cent) of online advertising spend amongst advertising agencies.

August 2007

Forecast spending for 2007
When asked to consider how their internet advertising spend would be allocated in 2007, it was expected that a similar amount of agencies’ online advertising dollars (64 percent) would be spent on general online advertising as in previous years (down 1 per cent from the forecast for 2006/07 financial year), with advertising on search engines and directories expected to attract 28 per cent (the same as forecast for 2006/07 financial year) and spending on internet classifieds expected to attract 8 per cent of the online advertising dollars (down 1 per cent from forecast for 2006/07 financial year).

Strengths and weaknesses
Thirty-nine percent of advertisers regarded the internet’s “targeting capabilities” to be its greatest strength. A further 15 per cent of advertisers cited “cost effectiveness” as the Internet’s greatest strength as an advertising medium. Respondents were also given an opportunity to voice what they felt were other strengths or weaknesses that the internet has as an advertising medium. A great percentage of advertisers (49 per cent) cited the internet’s “high accountability” as a strength.

Both advertising agencies (24 per cent) and publishers (31 per cent) regarded the internet’s “high accountability” as its greatest strength as an advertising medium.

When looking at all of the strengths mentioned by respondents, the internet’s “high accountability” (49 percent) and “targeting capabilities” (22 percent) were the strengths mentioned most often by advertising agencies. Publishers also regarded the internet’s “cost effectiveness” and “targeting capabilities” as its key strengths.

Advertising agencies (20 percent) expressed the greatest weakness of the Internet as an advertising medium to be that “the Internet is too fragmented”. A further 17 percent of agencies cited “lack of understanding” as the Internet’s greatest weakness.

The issue of “unsolicited mail or spam” (15 percent) was the weakness mentioned most by publishers. Again, when looking at all of the weaknesses given by respondents of the Internet as an advertising medium, a large number of advertising agencies (24 percent) cited a “lack of understanding” to be a weakness of online advertising.

Evaluating the medium
A vast majority of advertising agencies (88 percent) and advertisers (69 percent) agreed that “the Internet allows me to efficiently reach my target audience”. A large majority of advertisers (77 percent) agreed that “advertising on the Internet has high accountability due to the sophisticated measurement tools available”.

All of the publishers surveyed agreed that the Internet offers advertisers “great value for money” and a vast majority (92 percent) also agreed that “advertising on the Internet is an effective way to build brand awareness”.

A large majority of advertising agencies (71 percent) and advertisers (85 percent) plan and purchase online media as part of a total media strategy. The remainder of agencies and advertisers plan to purchase online media separately from other media, with its own specific objectives.

For more information, vendors, resources and case studies visit the Internet Marketing Research Pavilion