Network Insight Institute

Alex Stewart

Alex Stewart, Director, Content Business, ninemsn

A major part of [ninemsn's] success is due to the power of our local and highly respected brands. In other countries, people use Hotmail, but they do not then use the rest of the MSN network as much as they do on ninemsn in Australia. By comparison, if people use Hotmail in Australia, they also care about, and may go to, the branded web content: say from Channel Nine, through National Nine News, the Getaway travel show, Survivor, Good Medicine, Money, or any other number of brands that they associate with voices and opinions that they trust. In other words, online has become valid as a brand extension.

For example, if I am reading a magazine from the popular range of ACP magazines, it may contain an article about the impact of the GST on my tax return - and that is the total degree of my interaction with the magazine. But when reading the same magazine online, I am also provided with the ability to actually calculate what the change in tax policy means for me, by putting in my numbers and seeing how the changes personally affect my hip pocket.

My point is that, although with offline media we still form valid connections with consumers, online allows this connection to be taken further. Not only can we do things that can't be done on other media, but also we can do them at times when people aren't normally consuming other media.
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However, it is an interesting phenomenon that, already, nine per cent of people's media consumption occurs through online, yet only one per cent of advertising media spend is online. It is a little bit of a 'chicken and egg' phenomenon: advertisers won't go there until there is an audience; the audience won't go there until there is content. We are really at the point, in narrowband, where we do have the audience and the fight now is proving the commercial viability of that for advertisers.

ninemsn's primary revenue stream is very much reliant on an advertiser-pays business model. We are confident in our business strategy and know that it delivers results for the advertisers who choose to advertise online with us today. The challenge now, in the post dot com economy, when a lot of the crazy money has dried up coupled with a general recession, is that there is a smaller advertising spend. Every dollar counts. Every online advertising campaign has to work for our clients.

An added component to the market perception right now is that a lot of the crazy money funded by venture capitalists, and then mandated to be put back into online advertising, is no longer there.

Today, 75 per cent of ninemsn's advertising dollars come from mainstream bricks and mortar advertisers. It was an entirely different story 18 months ago. The dot com dollars have fallen away, and now we are seeing the much more dependable, although slower, rise in advertising expenditures from traditional companies.

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