Advertisers look to work the margin for every extra click
Internet advertising and media identities say the global financial crisis and ensuing economic downturn have unleashed volatility on what had been seen as a one way growth prospect. Oleg Polyakov, President of Aegis Media, says brand promotion became far tougher, just as clients became more choosy, fighting harder for end customers.
“Since 1995 up to 2007, all players in the media business had a clear understanding of what to expect from the market. Presently there is a shared opinion that stability has gone and virtually anything may happen overnight.”
With most brands having moved into the internet a decade or more ago, content has become the key driver of market differentiation and value adding. Dominic Grainger, General Director, Group M, Europe, Middle East and Africa, says that’s as true now as always, with brands looking to build complexity into customer understanding – as well as cashing in on the premium that good content provides – not just place a product at a price.
“Just recently a high end online fashion retailer was launched in the UK. If you go on that site it's not a shop online. It's actually editorial content site. It's got lifestyle content, travel content, fashion. But it is selling expensive clothes.”
But the real change in recent years has been the rise of service provision according to Ruslan Tagiev, General Director of TNS Russia. It’s now seen as a key part of profitability, with the rise of social networks now making them integral to the service provided
“Web-based companies focusing on providing service rather than content have been more successful in terms of yielding profit. Social networks and search engines are the key players here.”
But with advertisers increasingly under siege from freely available internet content, the marginal cost of providing fresh new content, which drives the premium, and drives the bottom line, is increasingly being questioned. If the content is already out there, more media players are asking if it is just enough to present it in a format their customers like. But traditionalists argue that quality content will always attract a premium, where the margin paid for yesterday’s is always diminishing.