growth in online advertising could be stymied

Online ads frustrate marketers

GROWTH in online advertising could be stymied this year due to the lack of a standard measurement system and growing antipathy to online ads, according to accounting firm Deloitte's Media Predictions 2008 report.

Damien Tampling, head of Deloitte's Australian technology, media and telecommunications team, said the report, released today, also highlighted growing concerns over the large carbon footprint created by the increasing amount of technology found in living rooms.

But the prediction likely to resonate the most locally was the potential knock-on effect from not having a system to measure the effectiveness of online ads.

"This is beginning to cause issues as more and more organisations advertise online and want to compare the return on investment across different channels, websites, time periods and territories," Mr Tampling said.

The latest figures show that in Australia, online advertising hit $347.7 million in the three months to September last year, up 6.8 per cent on the previous quarter.

The Interactive Advertising Bureau of Australia has formed a cross-industry online advertising measurement committee and in November it announced a step towards a common system by agreeing to use a panel-based measurement system.

The IAB is now conducting a methodology audit for panel suppliers to determine the minimum size of the panels.

Mr Tampling said the Deloitte report, which is based on contributions from the firm's 6000 global managers in the media space and discussions with media executives, also warned that the internet industry might face greater regulatory scrutiny this year.

"This coming year may also see growing opposition to a key feature of online advertising - the tracking of online behaviour - whose main purpose is to enable the delivery of targeted advertising," the report said.

"In 2007, resistance was already being manifested in the form of organised lobbies and a 'do not track' campaign. Some websites decided to differentiate on the basis of privacy, with one search engine offering a non-tracking version; another started offering consumers the option of blocking ads."

The report also found that growing antipathy to online ads was a "key global trend".

"One 2007 survey of US customers found that over three-quarters of respondents considered internet ads more intrusive than those in print," the report said. "Nearly two-thirds claimed they paid more attention to print advertising than to that on the web."

Meantime, Mr Tampling said some TV networks needed to do more on the internet to help grow its original product: free-to-air TV. "Working out where internet TV fits in consumers' growing range of entertainment options should be a key objective for both traditional and new media companies in 2008."

But the Deloitte report also suggests traditional TV could be resurgent in some markets in 2008 as regulations are relaxed. For example, the European Union plans to legalise product placement. The product placement market in Europe was worth only $US31 million last year, compared with $US1.5 billion in the US.

Mr Tampling said local media companies should become more environmentally aware in 2008. "The media and consumer electronics industries will be forced to consider how the carbon footprint of the living room can be reduced," he said.