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Advertisers not yet prepared to expand business to the internet

The winter of 1997 was a turning point in the history of Slovak media - the leading daily Pravda became the first newspaper in the country to launch an electronic version of its content on the Internet.
This event simultaneously opened new vistas for Slovak advertisers. Curiously, however, advertising interest in presenting products on the Internet is still low.
"The Internet isn't yet able to approach as large a group of people as are classical forms of media," said Eva Babitzová, executive director of the Slovak Board of Advertisers, adding that advertising agencies remain to be convinced of the benefits of Internet commercials.

The winter of 1997 was a turning point in the history of Slovak media - the leading daily Pravda became the first newspaper in the country to launch an electronic version of its content on the Internet.

This event simultaneously opened new vistas for Slovak advertisers. Curiously, however, advertising interest in presenting products on the Internet is still low.

"The Internet isn't yet able to approach as large a group of people as are classical forms of media," said Eva Babitzová, executive director of the Slovak Board of Advertisers, adding that advertising agencies remain to be convinced of the benefits of Internet commercials.

But Internet enthusiasts say that advertisers are missing the boat, and argue that the Internet provides advertisers with many more options than print media. Jozef Škvareniak, the boss of KIO.SK, a company which sells ads on the Internet and has created web sites for top Slovak newspapers like Pravda, says the main difference between classical ads and Internet ads is the size of the audience that can be reached.

"Classical printed versions of ads can be seen only locally," he said. "However, Internet versions can address anybody in the world." Despite that fact, Škvareniak continued, advertisers are proving slow converts.

The truth of Škvareniak's words is borne out by Pravda's website. The front page includes one ad - a box placed top left, leaving the box on the right side vacant and bearing the message "space for your ad." Besides this solitary front page ad, Pravda's website contains only one other paid spot.

Peter Mačinga, marketing director with Pravda, explained that Internet advertising is still in its infancy. "Firms are not yet used to it, since it's totally new territory for the advertising industry," he said, adding that because of this fact, ads on the Internet are much cheaper than those in print media.

According to the price lists of KIO.SK and Pravda, advertisers on Pravda's Internet site pay 32,500 Slovak crowns for a month-long placement in a box on top of the front page; the same kind of ad in Pravda's printed version would cost advertisers 25,000 crowns per day.

Škvareniak said it was hard to settle prices for Internet ads, since "it's difficult to secure a complex audit which would actually set borders within which prices could move." Despite that, he said, KIO.SK's turnover has been gradually climbing.

Mačinga shared Škvareniak optimism for the future of net advertising, but said that once the market took off and became a more important source of revenue for the paper, Pravda would cut out middlemen like KIO.SK and try to sell ads on its own. "At the moment it's not effective for us and we don't have that experience. However, the time will come for sure," Mačinga noted.

Technical glitches

According to experts, Internet users will not slow down to look at ads on the information highway unless advertisers figure out a quicker way to download both the site and their commercials.

Babitzová cited the words of Bob Garfield, a globally-respected advertising analyst, who said that "Internet advertising won't be effective as long as users have to wait for ads to be downloaded."

But Škvareniak said this problem had already been partially addressed by so-called 'dynamic ads,' which provide extra information without the user being required to click on the ad. "The box is activated simply by pointing an arrow on it, and de-activates when you shift the arrow somewhere else," he said.

Škvareniak added that the Internet offers advertisers a service which no other medium could supply - the exact number of visits to each web-site, as well as the exact number of clicks on each ad, giving advertisers invaluable insight into the effectiveness of money spent on Internet commercials.

For the moment, such numbers may be discouraging rather than inspiring advertisers. According to statistics supplied by KIO.SK, Pravda's website is visited 20,642 times a day. Only 0.4% to 1.6% of those visits include actual clicks on advertisements, most of which lead the user to the site of the advertiser.

Stanislav Stowasser, general director of Global Network Services, an Internet provider, thinks that the unhappy state of Internet advertising in Slovakia could be improved by an open dialogue with advertising agencies, which handle 80% of all ads in Slovakia.

"We've tried to talk to them about it; we sent 216 letters to 216 advertisement agencies, but only two of them responded," said Stowasser, adding that one of the two respondents had asked what the Internet was. "They don't recognise the Internet as a good place to advertise, but they should, and they will, because providers will be putting constant pressure on them," he said.

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