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Now that's a lot of money. In fact, if you had that much cash, you could buy a brand new Koenigsegg supercar every day for almost three years, and still have some change left over for a Mars bar or two.

Now if we adjust that figure to allow for NZ's smaller population, the NZ online advertising market ought to be worth $200,000,000 a year.

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Hmmm, I don't think anywhere near that amount of money is being spent online by NZ-based advertisers -- so what's going on here?

Are we that far behind the UK that we don't understand the value of online advertising -- or could it be that we simply don't have the amount of popular web real-estate to support that many banners and placements?

Surely, if that much money were being spent on Net-based advertising here, there'd be plenty of really profitable websites that made good returns on their publishing activities.

Unfortunately the reality is far different.

I strongly suspect that the number of truly profitable solely ad-funded Kiwi websites could be counted on your fingers.

So where is the local online advertising spend going?

Well I see quite a few ads for .co.nz domains on Google and even some of the other international ad networks -- so perhaps this offers a bit of a clue.

I think the reality is that, unlike print, television or radio -- internet advertising is not a geographically constrained medium.

If you have $500 to spend on net-based advertising then sites like Google are probably a whole lot more attractive (and affordable) than the NZ Herald, Stuff, or even TradeMe.

Modern ad-server technology means that if you're chasing a solely NZ-based audience you can still place your ads on Google, Yahoo or other hi-traffic website and be sure that plenty of Kiwis will see them. What's more, your Google ad will likely be a whole lot more targeted than an ad on any of the NZ-based sites I've mentioned.

The truth is that NZ companies are spending an increasing amount on net-based advertising, it's just that they're not spending it locally with Kiwi websites -- they're going to popular overseas sites.

How can the local online publishing industry counter this? Do they really need to counter it?

The presence of Google's powerful advertising presence is a double-edged sword. Although it siphons money away from local publishers, it also provides those same sites with a valuable revenue stream through the use of the AdSense system.

The problem is that we still end up with a middle-man (or two) stripping away the returns to the publisher on such placements.

Of course I'm doing a fair bit of speculation here -- but would love to hear from anyone who's actually buying online advertising. Do you buy from local sites or agencies? Does online advertising work for you? How much do you spend?

And from a Net user's perspective, what kind of online advertising works for you? Are you more likely to respond to a well-targeted Google text ad delivered through their ad-network, or the large, intrusive graphics-heavy banner or skyscraper ads you find on many news and other sites?

Have you *ever* responded to an evil pop-up or overlaid ad?

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