by Martha McKenzie-Minifie, The NZ Herald

Advertising agencies will increase their spend on online advertising by 50 per cent over the next year, according to a survey showing the medium has "come of age".

A Roy Morgan poll for the Internet Bureau showed 8 per cent of advertising agencies' total ad spend in the last financial year was on online advertising.

It forecast the figure would rise to 12 per cent over the next year.

The figures laid to rest a commonly held belief that advertising agencies were lagging behind in online advertising, said the Internet Bureau general manager, John Schofield.

"Quite often the agencies have been painted as the laggards of the online world," said Schofield. "This shows they're allocating quite large chunks of their advertising budgets to online."

He said the medium had "come of age" and agencies were using it in creative ways.

Two-thirds of the spending was on general online advertising such as website banner ads and outbound, permission-based email. The rest went on search engines and directories, such as paid placement on Google or Yellow Pages online.

Respondents said the medium was an efficient way to reach a target audience and, despite troubles over click fraud - widely publicised overseas - measurement tools meant online advertising had a high degree of accountability.

Martin Gillman, chief executive of media planning and buying agency Total Media, said the medium was rising in popularity as people spent more time online.

Internet users were hunting for information and tended to be "in purchase mode".

"Every agency will be considering online as a mainstream part of their advertising campaign," said Gillman.

"Online is a very important part of the marketing mix that you just can't ignore any more."

He said online advertising was used in combination with other channels, such as TV, radio and print.

The Advertising Standards Authority reported steady growth in the medium from $8 million, or 0.4 per cent of total spend, in 2003 to $44 million, or 2 per cent of the total spend, last year.

It collects figures for online advertising using a narrower definition than the Roy Morgan poll.