In a recent post I mentioned recent IAB figures which showed for the first half of 2009 New Zealand TV advertising revenue plummeted 13%, while, in stark contrast, online advertising grew 7% compared to last year.

This may have been a shock to some media planners & buyers.  Especially those who to date have given little, if any, attention to online. No one likes their world turned upside down, so some may even be in denial & view this as a short term aberration due to the recession.

I don’t think so!

Most people acknowledge UK is a couple of years ahead of NZ on the online curve & generally what happens there is a pretty good indicator of things to come in NZ.

Whilst things have been tough enough in NZ, the recession has been much worse in UK. As a result the UK advertising industry has really suffered, with a £1.5 billion reduction in total media spend. Despite this, online advertising has continued to grow because of its performance accountability.

The real bombshell however is that, for the first time ever, more money is being spent in UK on online advertising than on TV!

That is pretty astounding & makes UK the first major economy to see online spending overtake television.

As the above table shows, UK’s growth in online advertising has very clearly been lead by paid search.

In NZ paid search is now the biggest online advertising channel & accounts for 36.3% of all online spend. However to put this in context, according to the IAB, paid search in UK accounts for 62.6% of all online spend.

Begs the question – when will that happen here? My money’s on it being within 2 years.

Since its launch Bing has slowly been growing its market share. However according to figures released last week Bing’s global search market share faltered in September, slipping to 3.39% from 3.52% in August.

The significance of this minor fluctuation is debatable, however given the extensive marketing Microsoft has been doing to promote Bing as a “Google killer” these latest figures have prompted lots of of discussion both on & offline.

Clearly Microsoft is not everyone’s favourite corporation & so not surprisingly there have been gleeful postings by Microsoft detractors about this fall in market share signalling ‘game over’ for Bing.

Ahh, the joy of schadenfreude!

Do they have a point? After all, recent Google challengers Cuil and WolframAlpha both seem to have faded into obscurity. (When, if ever, did you last use either?). Despite promise of new ground breaking search technologies neither has made any real impression on the Google Juggernaut.

Despite this, if any search engine has a chance of challenging Google it has to be Bing.

But in my opinion it won’t be because of Bing developing better search technology than Google (unlikely as that is), or from Microsoft’s deep pocket marketing.

Think of this like a race between trains on the same track. Google is already way ahead down the track running at full steam, whilst Bing is just starting to pull out of the station.

And the only way Bing will ever overtake Google is if Google goes off the rails.

Which is exactly what happened with AltaVista. Ten years ago they were the kings of search and Google was a nobody. But then AltaVista lost their way, turned into a ‘portal’ and started producing crappy search results. Only then did people who habitually had used AltaVista look to alternative search engines. Google was in the right place at the right time, and their ground breaking technology which provided great results did the rest.

A gross simplification, admittedly. However my point is that even with their better mouse trap Google probably wouldn’t have become the top dog in search if AltaVista hadn’t dropped the ball.

Will Google eventually go off the rails & leave the open the door to another search engine? At this point I’d say that whilst possible, it’s unlikely. But if they do, Microsoft is probably the only contender who can last the distance & exploit the opportunity if it arises.

What do you think?

It looks like even the search colossus Google isn’t immune to the impact of the global recession.

Despite earning a staggering $4.2 billion on revenue of $21.8 billion last year Google is now aggressively trimming expenses to protect profits & stop its stock price from falling further.

Since January Google has eliminated outside contractors; curtailed some of the employee perks they’re famous for; & canned services that weren’t paying off, like their foray into radio advertising.

Google’s huge growth in revenues has fueled significant growth in the last couple of years with headcount jumping to almost 21,000 employees, compared to 10,674 at the end of 2006.  But now to further reduce costs Google has  started laying off staff & consolidating some offices.

Google’s announcement last week that it’s laying off 200 sales & marketing staff globally came as a surprise, given this is the part of the business responsible for generating advertising sales which reportedly account for 97% of Google’s revenue.

Disappointing is the fact that this decision has impacted on the Australian & New Zealand operations. Apparently the Melbourne office is being closed & the New Zealand office staff of 8 cut back significantly.

The Google NZ team is a great group of highly committed & talented people who’s efforts have undoubtedly played a key part in the significant growth of search marketing in New Zealand. Search has taken off since Google established a local office & the level of agency support we’ve experienced has been outstanding.

If Yahoo had a similar presence in the NZ market they’d no doubt be getting a far bigger share of the search cake.

According to the latest Hitwise figures Google has 92.52% of the total NZ search volume share whilst Yahoo has just 3.1% & Microsoft even less at 1.14%.

Sure, there’s much more to Google’s dominance than just having great people on the ground, but it’s certainly played a part.

Our best wishes & sincere thanks go to the local Google NZ team. Thanks guys, you’ve been terrific.

SureFire Search is delighted to announce the appointment of Jeremy Templer to the newly created position of client services director.

A returning Kiwi expat, Jeremy brings a vast amount of in depth search marketing knowledge gained from over 13 years  working in highly competitive offshore search markets.

His most recent role was in San Francisco as Director of Search Marketing for global interactive services company Acxiom.  Prior to this Jeremy was a senior manager at US web analytics and business optimisation company Coremetrics where he established an in-house search agency managing search campaigns for Coremetric clients.  Jeremy has also worked in a range of roles both in Australia & the USA for search advertising network LookSmart.

We’re really pleased to welcome Jeremy to the SureFire Team & know that our clients will benefit from the extensive knowledge & skills he’s gained working in highly competitive markets that are significantly further along the curve than the relatively immature NZ search market.

If you’d like to meet up with Jeremy to discuss your search marketing requirements please contact us.