Dotcoms in fierce fight for survival in the long term

<p>Rampant advertising expenditure in Hong Kong's dotcom sector is no </p><p>longer succumbing to the "maximum spend for maximum share of voice" </p><p>fever of late. </p><p><BR><BR> </p><p>According to recent figures released by ACNielsen AdQuest on the SAR's </p><p>top 20 dotcom/ISP advertisers, HK$728 million was spent on </p><p>cross-media advertising efforts by the dotcoms, dwarfing ISP spend, </p><p>which lingered at HK$148 million for the first five months of </p><p>this year. </p><p><BR><BR> </p><p>Veering away from pure dotcom players, old economy companies with </p><p>hard-edged new economy offerings - largely in the financial and telecoms </p><p>domains - dominated. </p><p><BR><BR> </p><p>And online financial services provider CASH On-line came up trumps in </p><p>the above-the-line stakes on a month-on-month basis, spending a colossal </p><p>HK$42 million. </p><p><BR><BR> </p><p>Nevertheless, according to CASH deputy chief executive officer Felix </p><p>Miao, having a successful dotcom strategy was not "rocket science". </p><p><BR><BR> </p><p>"The foundations for any sort of Internet business are the branding and </p><p>the systems", he told MEDIA, adding, "We're not one of those dotcoms </p><p>which plans to come into the market a month before IPO, pour millions </p><p>into adspend and pull the plug - we're here for the long haul." </p><p><BR><BR> </p><p>Likening CASH to number two category dominator Sunday.com, Mr Miao said </p><p>that AdQuest's findings were, if anything, "a little understated". </p><p><BR><BR> </p><p>"If the market finds our investment high, frankly, they have no idea of </p><p>what running and developing a successful Internet business is all </p><p>about", he said, noting that CASH's recent foray into cyber-cafes was a </p><p>move "to grow this new pie that is electronic-based financial </p><p>services". </p><p><BR><BR> </p><p>MindShare digital associate director Ralph Szeto considered the overall </p><p>slowdown on local portal adspend a result of advertising no longer </p><p>fulfilling its role as a viable revenue source. </p><p><BR><BR> </p><p>"Dotcoms and ISPs alike are now more focused on getting revenues from </p><p>ecommerce or selling content (and) they'll keep decreasing adspend </p><p>budgets because they see their brands as already established". </p><p><BR><BR> </p><p>But as unfettered banner swapping and free banner exchanges are scrapped </p><p>by websites charging for the privilege of advertising online, the dotcom </p><p>sector is becoming increasingly segmented by those who can afford </p><p>sustained spend, and those who can't. </p><p><BR><BR> </p><p>"There's going to be more spend in the connection sector, with activity </p><p>in broadband services ramping up, boosted by the launch of new WAP </p><p>technology in Q3 and Q4," said Mr Szeto. </p><p><BR><BR> </p><p>Slugging it out in fourth and fifth position was telecoms Goliath Cable </p><p>& Wireless HKT, pouring a staggering HK$29 million worth of </p><p>adspend into its broadband Netvigator and Netvigator portals </p><p>respectively. </p><p><BR><BR> </p><p>According to Euro RSCG media director, Interactive, Ms Candida Ness, </p><p>digital agencies should be readying themselves for a backlash. </p><p><BR><BR> </p><p>"Any smart agency has always been thinking about trying to expand beyond </p><p>dotcom business, because it's not a question of 'if the adspend </p><p>trickledown is going to happen' - it's a question of 'when'." </p><p><BR><BR> </p><p>One ISP which went against the grain, brandishing HK$33 million </p><p>worth of adspend and ranking third in the top twenty was </p><p>Hongkong.com. </p><p><BR><BR> </p><p>"The ISPs are going to have to continue with some sort of sustained </p><p>advertising programme," said Ms Ness, adding. </p><p><BR><BR> </p><p>They can't just drop off the map - it's a case of the survival of the </p><p>fittest". </p><p><BR><BR> </p><p>(See also CReATION, page 13). </p><p><BR><BR> </p>