Cold Truth about Cold Type

The online media industry is losing its dynamism, some might say its edge. No important content-based site has launched locally for several years, even as important mass-circulation titles and numerous independents have entered the print arena, and as local online ad revenues grow.

Original online journalism hardly features at all on the major news portals, which for the most part pull their content from wire services and print partners. Independent Online, the most popular South African online news destination, produces only 5% of its own copy and pulls 35% from wire services and 60% from its traditional media partners.

News24 does slightly better, generating 10% of its copy in-house, but it gathers 15-20% of its content from traditional partners, and pulls another 70-75% from wire services. The Mail & Guardian Online also produces 10% of its copy in-house, getting 65% from wire services and around 25% from its print partner.

This has lead some to question whether the web will ever become an economic force in journalism.

It may yet, says Bryan Porter, content manager at News24. “The first point to be made here is that the consumer does not care where their news originates, as long as they can find what they want on the media brand of their choice. There is also this perception in the market that wire copy is of lesser quality than other content. This is of course not true as the wires also have some of the best writers, editors and photographers around. Presentation of content plays a further role in defining the brand.”

Still, could anyone imagine walking past a newspaper stand where the Cape Times, Die Burger, ThisDay and all the rest feature the same headlines, pictures and copy, no matter how high the quality? In a world where Media24‘s online products can hardly be differentiated from, for example, that of the Mail & Guardian, are we winning or losing?

Right, content is expensive, and online products face sustained deadlines throughout the day. Wire copy is going to play an important role in online news sites, no question.

So maybe the challenge lies in the structuring of the sites, giving original content, for the most part opinion pieces and features, a higher profile than they currently enjoy. Because whoever manages to truly differentiate themselves first in this market stands to win reader loyalty, market share, and ultimately revenues.

Under-funding in this industry remains a major problem and ties most editors’ hands. No one would argue that simply pumping money into a website is the way to go — but a sustained investment strategy is necessary if business targets are to be achieved.

Matthew Buckland, editor and manager of the Mail & Guardian Online, agrees that the standards in online journalism are not as high as they should be.

Buckland blames small staff complements in online newsrooms, emphasising that resources are tight. “Online publications are too reliant on agency copy and shovelware [repurposed content from traditional media partners]. When an online publication in SA scoops a story, which is then picked up by traditional media, that’s when I’ll know that they have truly arrived on the journalism scene.”

It’s not all bad news, though. Research released by the Online Publishers Association (OPA) shows its members attracted more than 3,5-million unique users and 106-million page impressions in August ’04.

The formation of the OPA has often been hailed as a watershed in online publishing. According to chairperson Russell Hanly, the OPA is focusing on two areas at present: establishing Nielsen’s Site Census as the web measurement standard in SA, and encouraging members to submit their advertising and sponsorship revenues to Nielsen’s AdEx.

Unsurprisingly, the media buying community is viewing such progress in a favourable light. “The advent of industry bodies like the OPA will certainly assist overall to provide more credibility of the online media industry, and hopefully have us all speaking the same language in due course,” says Andrea Mitchell, senior media planner and buyer at Acceleration.

That said, more than one media planner has referred to the OPA as an old boys’ club. Smaller industry players also seem to feel they are being excluded from the process of setting an industry agenda. Membership fees are R20 000 a year.

These criticisms do not diminish the importance of the OPA, but they do highlight communication issues that need to be addressed. Buckland, who also manages marketing for the OPA, says the association is expanding its membership to include smaller players, and is actively engaging with its critics.

Of course, educating media planners and buyers in the opportunities online media offers is an important step towards achieving broader acceptance for the ‘net as an advertising medium.

But according to Gordon Muller, managing director at OMD, this is not yet happening. “Having said that, media owners across the board have done very little to educate their own people, let alone the media [buying and planning] industry,” says Muller. “So why pick on the web sector for this?” Muller feels the onus rests on professional media planners to constantly improve their own knowledge.

And talking of ad spend, local publishers rely heavily on gaming (read casinos) and financial services firms for revenue. Data provided by Nielsen Media Research shows that nine of the top ten online ad spenders are from these industries [see table]. The top 10 spenders for the period Jul ’03 – Jun ’04 spent more than 45%, or R32-million, of the R71-million invested in online ad spend during the period.

Says Joanne Scholtz, media director at FCB Johannesburg: “Some service, business-to-business and high-end product clients spend between 5% and 10% of their budgets online. However, most mass consumer products are limited in their online spending and unless the online universe grows substantially, I do not see this changing in the near future.”

In the online world entrepreneurs and enthusiasts continue to redefine the medium. Just look at the gusto with which the interactive nature of blogs has been embraced over the last several years. It is a mistake to see online publishing as an isolated industry, for it is part of both the broader publishing and internet communities.

Enthusiasm for this medium lies in that sense of community — and so does its opportunity for innovation and growth. Publishers will forget that at their own peril.

Herman Manson is the editor of mediatoolbox.co.za

Top online ad spenders