Exposing the hypocrisy of dot-com advertising

Not only are dot-coms trying to put newspapers out of business, they are also complaining of being overcharged for placing ads in them.

Only a year ago, media pundits were predicting that the Internet was going to put newspapers out of business. Yet now dot-com advertisers are clamouring to get into the national press, and the windfall from their new ad revenue is welcome news for traditional media owners.

But the new kids on the block are not easily satisfied, and the recent furore over pricing policy has shown they also wish to rewrite the rulebook on the laws of supply and demand.

Accusations have been flying that national media owners have been unfairly “cashing in” on the boom and charging dot-com advertisers “through the nose” for their space.

What’s more they want a cheap deal – so the national press is being asked to subsidise their attempts to put us out of business.

Ironies aside, there are compelling reasons why dot-com advertisers need to advertise in the quality national press. We are keen to help them, but we’re not going to give it away.

Most dot-coms aim to encourage click-through and site traffic. Many of them launch as totally new brand names (such as Egg, Smile and Marbles), so making noise quickly in a cluttered market is critical.

The key target for most dot-coms will be high-spending ABC1s, so who better to deliver them in big numbers quickly than the broadsheets? Most of the titles, The Daily Telegraph included, carry regular online and Net supplements. This editorial attracts the sort of early adopters who have been the first customers of the dot-coms e-commerce revolution.

Everyone knows that at this early stage the sales and profits of many dot-coms are a pinprick compared with their staggering stock market valuations. In preparing for a flotation and maximising investment interests, dot-coms know that the quality end of the national press plays a vital role. As well as delivering an audience of potentially high-spending e-commerce customers, we also deliver strong penetration of the investment and City communities upon whose patronage and support the success of a Net start-up’s flotation rests. That does not come cheap.

These aren’t the musings of a disinterested observer. After all, The Telegraph Group wholly owns Hollinger Telegraph New Media, which itself has shares in the women’s site Handbag.com and operates Electronic Telegraph, the first online service launched by a UK national newspaper.

So we have experience on both sides of the media owner/Net start-up fence.

I take the recent complaints that dot-com advertisers have received rougher treatment than other sectors with a pinch of salt. If a dot-com advertiser looking to build classified ad revenue wants to build its brand or prepare for stock market valuation with ads in our pages, good luck to it.

But don’t expect us to settle for anything other than the best price we can get. Would turkeys vote for Christmas?

Chris White-Smith is display advertising director at the Telegraph Group

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