Online ad future positive despite Scoop's struggles

Wellington-based news and press release agency Scoop is reviewing the service it offers partly because online advertising is "dead", but one advertising representative says the news isn't all bad.

Wellington-based news and press release agency Scoop is reviewing the service it offers partly because online advertising is “dead” (see Scoop blames demise on lack of support), but one advertising representative says the news isn’t all bad.

Scoop editor/director Alistair Thompson is looking for a new low-cost format and blames his site’s demise partly on the fact that online advertising market is "as dead as a doorknob".

Thompson says the site had tried to be innovative with advertising but that the local advertising agency community is neglecting the online medium.

However, Auckland-based The Internet Bureau senior account manager John Schofield is positive about the future. The Internet Bureau plans and places online campaigns on behalf of advertising agencies.

Schofield says all of the major agencies have run at least one online campaign and many are now doing so regularly. “Online as an industry has been a bit impatient with advertising agencies. To see the progress we’ve already seen with ad agencies, I think that’s very promising.”

Nicky Willis, media strategist with agency, Optimedia, agrees. “A lot more of the traditional agencies now have the capability to plan and buy online. It is still relatively a new media and there’s still a bit of trial going on.”

Schofield says agencies can find online media difficult to use. “Online media can be one that’s quite hard to make money out of because it’s not only fragmented from a planning point of view, but it’s also time-consuming to run an online campaign.”

He says there is also much confusion over measurements, with Hitwise, AC Nielsen and Red Sheriff all measuring in different ways.

Schofield says it can be difficult for small sites because it is a very fragmented market compared to newspapers or television. “I think Scoop would have found it quite difficult to get capture the attention of ad agencies when it came to profiling their product.”

He says it is a difficult time for many small sites. “Even the larger sites have been finding revenues a bit tight in the last six to 12 months."

Optimedia’s Willis believes it is going to be increasingly difficult for smaller sites like Scoop to compete with bigger players who are well-staffed with sales representatives and staff at the back end who can help with content development.

She also says that ad agencies aren’t necessarily making much money out of online advertising, but that that shouldn’t stop people from getting involved.

“It’s not something that’s going to die tomorrow – it’s still in a growth stage.”

Peter Fowler, managing director of Moonbase Media, which owns 12-staff news wire and press release site Newsroom, says his company has never relied on advertising revenue, viewing the market as immature.

"Advertising revenue to us is seen as cream on the cake.”

IDG Online Network (which includes the press release website Pressroom and news website IDGNet) online campaign director Kerry Dodds says most online salespeople would sympathise with Thompson’s comments about lack of agency support.

“The sooner agencies and advertisers realise it is a viable medium and it does work the better for everyone.”

She says although some agencies are willing to give online advertising a go, many don’t want to touch it “with a 10-foot barge-pole.”

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