Saturday, December 20, 2008

don't bet against the Internet

Recently, I participated in a debate on how GOOGLE services the SA market. GOOGLE South Africa’s model differs from its offices in other parts of the world. They will service a number of key accounts in South Africa by working mostly with clients and a few specified agencies directly. The business mechanism  operates on a transparent commission and discount free model and this is changing the way marketers do business and challenging the quality and focus agencies are giving to local Search campaigns.  This model could be construed as dis-intermediary by agencies, although GOOGLE is clear that it does not preclude them. The system places the onus on marketers to really get to grips with this area of business.

In the past local agencies buying GOOGLE Adwords worked through GOOGLE UK/Ireland and even Indian offices would receive discounts/commissions directly. These would vary depending on the country and deal. South Africa is one of the first countries to be adopting this approach It means the whole buying practice will be more transparent and because GOOGLE works on an auction model, you bid for your words, the better you are at Search campaign management the more effective your results. Specialised online agencies would have to agree fees upfront to clients and be held more accountable for search optimisation against the budget set.

As part of tackling this challenge in SA, GOOGLE suggested it would look at establishing an accreditation system for agencies to ensure that GOOGLE best practice is followed and thereby ensuring marketers who don’t work directly with GOOGLE will get the best possible GOOGLE service and bang for their buck.

These comments were published online and a raging debate ensued. GOOGLE was accused of wanting to cut off agency livelihoods and displaying big brother behaviour. However, there was also some support for the transparent approach and a need for some formal accreditation to ensure standards in the industry, although the process needed to be fair and inclusive.   

I thought the debate was very productive because it squarely put the devil on the table and if anything highlighted the need for a better understanding of the planning and buying mechanisms for the Web.   It also revealed a lot of activity and established interest in this space and there’s no doubt its going to challenge traditional agency thinking on how to integrate digital into traditional advertising.

Now if we can achieve transparency in buying web media, why not in traditional media?  Why shouldn't media houses that sell television, print, outdoor and radio be as aggressive and bullish about getting close to marketers and being completely open about media charges? I think that just as the Web is changing consumer's behaviour, it has to change business too.

The world’s changing rapidly, where consumers are increasingly on the web and in control of the conversation. The statistical evidence is there and in SA the market is wide open with just 5% Internet penetration and the fastest growth rate in usage globally, albeit off a small base. It’s a world in which marketers must in turn be empowered with more knowledge and insight, so that they too can be part of the dialogue and act quickly and appropriately to opportunities. Their agencies also have to take a good look at what kind of services they are offering and should see the growth in web as a major business opportunity.

The Web whether delivered via PC or mobile device offers far too much potential to be entirely relegated to third parties without due consideration and oversight.  And hopefully more debates like the GOOGLE Search debate will encourage marketers to start putting it more firmly on their agendas.


1 comment:

Emily-Rose Sloane said...

your comments really worry me. Google is so pervasive as it is. This transparency thing is just an excuse by Google to undermine agencies. So what if agencies control the process? that is why they are in business and how they make their living. Clients just cant understand this stuff - they need us. Google cannot be objective or service clients, they just don't have the capacity!!