Dotcoms in fierce fight for survival in the long term

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

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