About a dozen or so years ago when John Farquhar, Alec Hogg and I launched www.marketingweb.co.za we were called in to the SABC ostensibly for John and I to write articles about how white media buyers were completely ignoring a hugely successful and far reaching TV series called Yizo Yizo. Chris Moerdyk asks the question: Will online advertising ever recover from shooting itself in the foot?
The consequent series of articles John and I posted on Marketingweb led to parliament summoning the then whiter than white advertising industry to explain its lack of transformation. Which, in turn, resulted in the industry developing a charter to ensure faster transformation.
But, when we walked into that meeting of SABC bigwigs and their ad agency, Farquhar, who had never been known to be anything other than direct, politically incorrect and decidedly undiplomatic, ignored their welcome greetings and blurted out to no one in particular, “When the f**k are you people going to start advertising on Marketingweb? ”
Needless to say all of the 15 people at the meeting were completely taken aback and probably out of sheer terror one of the SABC bosses turned to their agency people and said, “Yes, why aren’t we advertising with them?”
The agency quickly knee-jerked an answer saying they were just developing a banner ad – which they probably hadn’t.
The result was that SABC took out a contract for a landing page banner at R35 000 a month. In those days R35 000 was a massive amount of money for an online ad and was probably higher than most B2B print products.
As more online products sprang up, virtually all of them decided in their misguided wisdom to entice advertisers with rates far below equivalent print rates.
And today, most of them are still paying the price of this stupidity because right now the advertising and sponsorship rates for online products are still way lower than those of other media in spite of reaching identifiable audiences anything up to 10 times the number of those reading print, radio and even TV, business publications and programmes.
Which is the reason why South Africa is lagging far behind many countries in the rest of the world where online advertising spend is increasing by leaps and bounds.
What with newspapers adopting the idiotic strategy of giving away their content for free on their websites and with the whole online industry effectively discounting the daylights out of their rates, very few, if any, B2B online media are making any money after all these years.
This has been an exercise in the futility of discounting. While it’s fine to have seasonal special offers, bulk or volume discounts, once the media starts to discount its rates, the industry finds it almost impossible to get back to their rate cards.
In fact, rate cards have become a joke. Inconsequential.
So, online media now have to find other ways of monetising their products because as far as advertising and sponsorship are concerned, the wounds they suffered by shooting themselves in the foot a decade ago just aren’t healing. In fact, they’re becoming septic.
Of course, there are ways and means of making money out of the online business but, from my own experience, it involves not only thinking out of the box but ignoring the box altogether.
The two biggest mistakes made by online media today is not investing in quality content and forgetting completely all about their biggest asset, their subscribers who, unlike any other media, are all individually identifiable by name, location and income group.
Regrettably, most of the online media were born out of the newspaper business with the result that monetising has been restricted to out-dated newspaper models.
It is sad to see so many online media still battling on within these unworkable and unsustainable business models when the answer is actually staring them in the face.
None so deaf as those who will not hear.
