/ 22 August 2007

Online ads: Don’t be chicken

Would you believe that there are still a few online media doubters left in South Africa? Most have now emigrated to Afghanistan where the pace of technological change is a bit slower. But my fellow media columnist, Harry Herber, still lives in South Africa. This is why I found his assertion — that online media here “is not going to be an advertising medium of consequence for a while yet” — surreal.

Yes, the reality is that internet penetration in this country remains below 10 percent, with a market conservatively estimated as nearing four million users. The reality is that online advertising is one of the smaller mediums here with less than one percent market share, if you believe what Adex tells us.

But that is small, you cry! Yes, but consider this: As small as it is, that figure represents the entire population of Ireland – a rather substantially developed country in world terms. In this context, four million local internet users are hardly of no consequence, unless you live the quiet life in Kabul of course.

The reality is also more complex: advertisers and media companies need to ask themselves: “What is the internet penetration of my target market?” You would bet that some premium brands and products appeal to markets with internet penetrations upwards of 90 percent. It would be crazy not to make online a critical part of their strategy.

And, oh! What an audience this is! Online users represent the very highest LSMs: An educated, technically savvy audience with disposable income and buying power. These are people who use the delete key, not Tippex. (There are people who use Tippex on their screens, but that’s another story).

Traditional media publications like Business Day and Mail & Guardian also appeal to niched, high LSM audiences much like that of the internet. But following the logic of online critics, these publications shouldn’t attract much advertising. But clearly this is not the case.

What is becoming increasingly clear is that online is emerging as the key daytime channel for reaching working professionals. You would safely guess that most professionals use the internet at work these days. What more would an advertiser want than the ability to target this hard-working, lucrative market?

It’s also clear that when it comes to online, we’re a savvy country. South Africa is now reportedly the sixth biggest country on the hit social networking site, Facebook. Surely it’s this kind of hip, happening and savvy audience that advertisers want a piece of?

I’ve many-a-time waxed lyrical about the benefits of advertising online, such as its interactivity, measurability and ability to target. Advertisers can target audiences and measure in real-time their return on investment with stunning accuracy. It’s a refreshing change from the hit-and-miss wastage scenario of some traditional mediums.

Online critics just fail to see the incredible potential that is being realised with the arrival of broadband, increased telecoms competition, downward price pressure on connectivity, and the convergence of devices. We’re seeing the arrival of rich multimedia advertising, which will ultimately see the convergence of television and online advertising. It’s a damn exciting digital world out there.

And yes, online advertising here is still small, unlike in the United Kingdom where it is bigger than both radio and cinema combined. But it’s small here because many agencies keep pointing out that online advertising is small. It’s an excuse not to dive in, simply reinforcing the Catch-22.

It’s a chicken and egg scenario, which Herber also makes reference to in his column. Personally, I think they’re just chicken.

Matthew Buckland is GM of Mail & Guardian Online. Read his blog @ www.matthewbuckland.com