"We were most successful as traditional marketers"
Martin Radelfinger on Adlink's new pole position in the Swiss online market
Martin Radelfinger on Adlink's new pole position in the Swiss online marketBy Markus KnöpfliWith the takeover of Qualiclick's activities, Adlink has become the number one Swiss online marketer. Martin Radelfinger, Managing Director of Adlink Switzerland, analyzes the new situation and shows where the online market could be heading.
How is it that the third-placed online marketer was able to take over one of the two largest?
Martin Radelfinger: We are only third in Switzerland, but thanks to the acquisition of the Doubleclick Media business, we are by far the largest in Europe. This naturally gives us a certain economy of scale in terms of ad serving, technology, research, marketing resources and so on. On the other hand, Qualiclick, which has done very well, found itself in a difficult situation due to the market situation and the planned IPO.
Do you have to be internationally networked to survive as an online marketer in Switzerland?
Radelfinger: (hesitates) I think it is a great advantage - and not primarily to capture international advertising flows, as is often said. That is also a factor. But the most important thing is the technology and ad serving contracts that can be negotiated centrally across Europe, as well as shared resources in research, marketing and advertising planning. We are always at the cutting edge of innovation (for example in multimedia advertising or new forms of advertising), have access to a creative studio and to e-mail addresses throughout Europe and, via the Doubleclick network, to Swiss users on most European and American sites. These are the main competitive advantages in an international network.
What is Adlink Switzerland taking over from Qualiclick?
Radelfinger: In this asset deal, we are taking over the customer base, ongoing campaigns, marketing contracts for the websites, the three-person sales and marketing team, 80,000 e-mail addresses and the Qualiclick name. According to reports, Adlink Switzerland generated sales of around CHF 5.5 million in 2001. There is now talk of an increase in turnover to around CHF 14 million.
Radelfinger: I can't and don't want to comment on this because we are listed on the stock exchange. I will only say that Adlink Switzerland will immediately become profitable.
What is the situation regarding market shares in online advertising?
Radelfinger: In 2001, we had a market share of around 20 percent. In the first quarter of 2002, it was around 35 percent. For the current year, we expect a market share of around 55 percent.
Is that enough to survive in Switzerland in the long term?
Radelfinger: Yes, because we have optimized invoicing, controlling and technology. As a result, we will generate the new, higher turnover with a company that, even after the integration of the three Qualiclick employees, is smaller in terms of employees and costs than Adlink Switzerland was 16 months ago. We now have twelve employees.
How many online marketers will there be in Switzerland in two years' time?
Radelfinger: Switzerland is an atypical market. We have one of the highest PC and cabling densities, rapidly growing ADSL penetration, and the Swiss are extremely willing to buy on the Internet. The situation is similar in Sweden, where 2.4 percent of the total advertising volume is spent on online advertising, compared to just 0.6 percent in Switzerland. One reason for this is the print-heavy nature of Switzerland. Nevertheless, one day we will reach 2, maybe 3 percent. This will result in a classic separation of planning and marketing in the Swiss online market, as in other European markets. It will then be worthwhile for agencies to plan online advertising themselves, as it will become an integral part of the advertising mix. Today, holistic online planning is only possible for some large traditional media agencies, such as BG Media or CIA Outrider.
Did I understand you correctly? So the prerequisite for such a split is a share of around 2 percent of total advertising sales?
Radelfinger: It is a direct function of the size of the market, yes.
In what time frame will this figure be reached?
Radelfinger: In two years at the most. By then, we will have achieved a share of around 1.5 to 2 percent of advertising sales.
Will Adlink split into a planning and a marketing company?
Radelfinger: In future, planning will take place almost exclusively centrally in the network - otherwise we will concentrate on the role of the classic marketer. That was the plan from the outset. However, due to the slowdown in growth, we were forced to offer comprehensive planning. However, this was and is a delicate matter, as transparency and the interests of the client must be guaranteed.
Will there be more than three Swiss online marketers in two years' time - or fewer?
Radelfinger: Definitely not more, but not necessarily less either. Publimedia Webadvertising consistently focuses on competent planning. We were by far the most successful with the classic marketer model and will be even more successful. Goldbach (Media Agent and Active Agent) also has a niche if it consistently implements cross-media advertising.
Qualiclick shareholders have received Adlink shares worth a maximum of 700,000 euros. Is that all, or is there more money to come?
Radelfinger: It was agreed not to disclose this information.
If no more was actually paid, the amount would be out of all proportion to the CHF 18 million or so invested in Qualiclick. Above all, this would show how small the fire is on which you are cooking and would cast your industry in a rather gloomy light.
Radelfinger: (hesitates) Working profitably in the current online advertising market is certainly a challenge. But I wouldn't measure Qualiclick's performance or value by the amount I mentioned.
How is it that the third-placed online marketer was able to take over one of the two largest?
Martin Radelfinger: We are only third in Switzerland, but thanks to the acquisition of the Doubleclick Media business, we are by far the largest in Europe. This naturally gives us a certain economy of scale in terms of ad serving, technology, research, marketing resources and so on. On the other hand, Qualiclick, which has done very well, found itself in a difficult situation due to the market situation and the planned IPO.
Do you have to be internationally networked to survive as an online marketer in Switzerland?
Radelfinger: (hesitates) I think it is a great advantage - and not primarily to capture international advertising flows, as is often said. That is also a factor. But the most important thing is the technology and ad serving contracts that can be negotiated centrally across Europe, as well as shared resources in research, marketing and advertising planning. We are always at the cutting edge of innovation (for example in multimedia advertising or new forms of advertising), have access to a creative studio and to e-mail addresses throughout Europe and, via the Doubleclick network, to Swiss users on most European and American sites. These are the main competitive advantages in an international network.
What is Adlink Switzerland taking over from Qualiclick?
Radelfinger: In this asset deal, we are taking over the customer base, ongoing campaigns, marketing contracts for the websites, the three-person sales and marketing team, 80,000 e-mail addresses and the Qualiclick name. According to reports, Adlink Switzerland generated sales of around CHF 5.5 million in 2001. There is now talk of an increase in turnover to around CHF 14 million.
Radelfinger: I can't and don't want to comment on this because we are listed on the stock exchange. I will only say that Adlink Switzerland will immediately become profitable.
What is the situation regarding market shares in online advertising?
Radelfinger: In 2001, we had a market share of around 20 percent. In the first quarter of 2002, it was around 35 percent. For the current year, we expect a market share of around 55 percent.
Is that enough to survive in Switzerland in the long term?
Radelfinger: Yes, because we have optimized invoicing, controlling and technology. As a result, we will generate the new, higher turnover with a company that, even after the integration of the three Qualiclick employees, is smaller in terms of employees and costs than Adlink Switzerland was 16 months ago. We now have twelve employees.
How many online marketers will there be in Switzerland in two years' time?
Radelfinger: Switzerland is an atypical market. We have one of the highest PC and cabling densities, rapidly growing ADSL penetration, and the Swiss are extremely willing to buy on the Internet. The situation is similar in Sweden, where 2.4 percent of the total advertising volume is spent on online advertising, compared to just 0.6 percent in Switzerland. One reason for this is the print-heavy nature of Switzerland. Nevertheless, one day we will reach 2, maybe 3 percent. This will result in a classic separation of planning and marketing in the Swiss online market, as in other European markets. It will then be worthwhile for agencies to plan online advertising themselves, as it will become an integral part of the advertising mix. Today, holistic online planning is only possible for some large traditional media agencies, such as BG Media or CIA Outrider.
Did I understand you correctly? So the prerequisite for such a split is a share of around 2 percent of total advertising sales?
Radelfinger: It is a direct function of the size of the market, yes.
In what time frame will this figure be reached?
Radelfinger: In two years at the most. By then, we will have achieved a share of around 1.5 to 2 percent of advertising sales.
Will Adlink split into a planning and a marketing company?
Radelfinger: In future, planning will take place almost exclusively centrally in the network - otherwise we will concentrate on the role of the classic marketer. That was the plan from the outset. However, due to the slowdown in growth, we were forced to offer comprehensive planning. However, this was and is a delicate matter, as transparency and the interests of the client must be guaranteed.
Will there be more than three Swiss online marketers in two years' time - or fewer?
Radelfinger: Definitely not more, but not necessarily less either. Publimedia Webadvertising consistently focuses on competent planning. We were by far the most successful with the classic marketer model and will be even more successful. Goldbach (Media Agent and Active Agent) also has a niche if it consistently implements cross-media advertising.
Qualiclick shareholders have received Adlink shares worth a maximum of 700,000 euros. Is that all, or is there more money to come?
Radelfinger: It was agreed not to disclose this information.
If no more was actually paid, the amount would be out of all proportion to the CHF 18 million or so invested in Qualiclick. Above all, this would show how small the fire is on which you are cooking and would cast your industry in a rather gloomy light.
Radelfinger: (hesitates) Working profitably in the current online advertising market is certainly a challenge. But I wouldn't measure Qualiclick's performance or value by the amount I mentioned.
