Advertising ebb and user flood
Revenues Below Expectations Force Bluewin to Restructure
Earnings below expectations force Bluewin to restructureBy Bruno AmstutzBluewin is the undisputed market leader among Swiss Internet portals. Despite a reach of over 50 percent, advertising revenues are lagging behind the success of its audience.
According to MMXI, the bluewin.ch domain reached 53% of Swiss Internet users in April. A dream figure for any advertising client. Nevertheless, the blue giant is cutting back: Around twenty jobs are being cut, channels merged and others removed from the range. In an interview with the Basler Zeitung, Bluewin CEO Christoph Brand cites the "unrealistically low prices" for internet services, which will soon no longer be free of charge, as the reason.
But where does the problem lie? With the media agencies or the advertising clients? "There is currently a noticeable skepticism towards banners," says Heinz Bischof, Managing Director of the media agency Media Planning. Andy Lehmann, Managing Director of Optimedia, makes a similar analysis: "The Internet as a medium currently has a bad reputation." This is apparently enough to put clients off. For Lehmann, it is not the portals' lack of performance that is responsible for the banner slump, but the negative publicity. However, he also does not see himself as responsible for the change in trend. "As a media agency, our job is not to push a medium, but to fulfill our clients' objectives."
Expectations 17 million francs lower
Meanwhile, Bluewin is trying to make the portal more attractive for advertisers and media agencies with new forms of advertising: pop-ups, interstitials and microsites are intended to enable larger, more eye-catching advertising. Daniel Neukom, Managing Director of the Internet media agency Euromedia Schweiz AG, describes these eye-catchers as a valuable addition to the offering, but ultimately as symptom control: "A portal alone cannot solve the problem anyway. What we need is generic marketing."
Christoph Morach, Managing Director Switzerland of Qualiclick, the marketer of Bluewin advertising space, is also calling for this kind of neutral education to improve the reputation of the Internet as a medium in the advertising industry. Qualiclick is trying to make the possibilities of web advertising palatable to advertising and media agencies through training courses. Ultimately, however, Morach sees this as a drop in the ocean. In his opinion, a strong association should do the educational work.
One reason for the cat's meow is probably the high expectations placed on the growth rate of the Internet advertising volume. After advertising expenditure of around 32 million francs in the Swiss network in 2000, the industry was expecting 57 million for 2001, according to Morach. After the first four months of the year, expectations have fallen to 40 million.
According to MMXI, the bluewin.ch domain reached 53% of Swiss Internet users in April. A dream figure for any advertising client. Nevertheless, the blue giant is cutting back: Around twenty jobs are being cut, channels merged and others removed from the range. In an interview with the Basler Zeitung, Bluewin CEO Christoph Brand cites the "unrealistically low prices" for internet services, which will soon no longer be free of charge, as the reason.
But where does the problem lie? With the media agencies or the advertising clients? "There is currently a noticeable skepticism towards banners," says Heinz Bischof, Managing Director of the media agency Media Planning. Andy Lehmann, Managing Director of Optimedia, makes a similar analysis: "The Internet as a medium currently has a bad reputation." This is apparently enough to put clients off. For Lehmann, it is not the portals' lack of performance that is responsible for the banner slump, but the negative publicity. However, he also does not see himself as responsible for the change in trend. "As a media agency, our job is not to push a medium, but to fulfill our clients' objectives."
Expectations 17 million francs lower
Meanwhile, Bluewin is trying to make the portal more attractive for advertisers and media agencies with new forms of advertising: pop-ups, interstitials and microsites are intended to enable larger, more eye-catching advertising. Daniel Neukom, Managing Director of the Internet media agency Euromedia Schweiz AG, describes these eye-catchers as a valuable addition to the offering, but ultimately as symptom control: "A portal alone cannot solve the problem anyway. What we need is generic marketing."
Christoph Morach, Managing Director Switzerland of Qualiclick, the marketer of Bluewin advertising space, is also calling for this kind of neutral education to improve the reputation of the Internet as a medium in the advertising industry. Qualiclick is trying to make the possibilities of web advertising palatable to advertising and media agencies through training courses. Ultimately, however, Morach sees this as a drop in the ocean. In his opinion, a strong association should do the educational work.
One reason for the cat's meow is probably the high expectations placed on the growth rate of the Internet advertising volume. After advertising expenditure of around 32 million francs in the Swiss network in 2000, the industry was expecting 57 million for 2001, according to Morach. After the first four months of the year, expectations have fallen to 40 million.
