Online is no ‘threat’

It’s time to leave the dark ages. The traditional advertising and media industry needs to see the potential of online or get left behind. This sentiment comes from a survey conducted independently by respected technology analyst Arthur Goldstuck for the Online Publishers Association.
It finds that there is a general lack of awareness within the traditional advertising industry of the efficiency, measurability and reach that online advertising has to offer – and that this has held back growth of the medium.

Most online publishers will tell you that they do most of their business direct with clients as a result of lack of interest from traditional media agencies. That is why the online advertising industry has some of the best, brightest and most aggressive sales execs around. They fight for their living.
Goldstuck’s report underlined the potential of the online medium should advertisers and agencies become better educated about online advertising.
The lack of interest was none so evident as in Tony Koenderman’s Ad Review 2006 booklet. The booklet was about as old school as its prehistoric front cover, which sported a pair of boobs to sell itself — advertising at its least sophisticated.

There wasn’t much mention of online advertising in the review. There were largely parochial comments from the world of newspapers, with editors speaking about “warding off the threat” of online. One editor laments the fact that “we’d lie if we profess to know how to make money out of the internet. And until we succeed the future remains uncertain”.

Sorry, but last time I checked the internet was an opportunity for media houses and not a threat. In fact, these very newspapers are ironically part of media houses that take the internet very seriously, investing vast sums of money to create very successful online operations that are showing strong revenue growth.
Let’s see just how uncertain the future is then?
It is clear that the online industry has left behind the slump of the early 2000s.  SA’s online advertising market, like the US, resumed an upward path in 2003 after falling dramatically in 2000. According to Goldstuck’s report we have seen faster growth in online advertising than the US, although admittedly off a base a fraction of its size.

Goldstuck in his report says “Online advertising in South Africa has come of age”, passing the R100-million mark for the first time in 2004, growing by a further 45% in 2005, and is likely to pass the R200-million mark in 2007. The report shows that the local online advertising market is set to treble in the next three years.
And overseas? We all know that online is booming. In the UK, for example, online advertising is bigger than radio and cinema combined. It has just passed outdoor advertising.
That’s all good and well, but the South African market is different. We need to be careful about citing overseas figures to gauge trends here. Critics of online like to point out that South African internet penetration remains firmly below 10%, with a market of only about 3,5-million users at the end of 2005.
They say online advertising is still one of the smallest mediums with a mere 0,8% market share. But this does not tell the full story as there are merely 13 online publishers making up that 0,8% at the moment, whereas something like over 550 publications report on the print advertising figure.

The critics fail to see the incredible potential that awaits us with the arrival of 3G and ADSL broadband, Telkom’s competition, downward price pressures on telecoms, the convergence of devices — and, and, and, yadda, yadda, yadda.
Goldstuck says that online advertising in the “long run will become a viable alternative to traditional forms of advertising, and will become a serious part of the overall media mix in South Africa”.
Why is this a “threat”? It’s time to update stodgy old school ways of thinking and realise two things: online is here to stay and it’s going to be one of the key growth media sectors of the future.

Now that’s an opportunity. So get with the programme.

Matthew Buckland: Publisher


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