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Ad revenues under threat from foreign websites

Julian Douglas MD Entertainment.ieThe Association of Online Publishers Ireland (AOP.ie) has warned that the loss of advertising revenue to foreign websites poses a threat to the development of indigenous digital media.     Julian Douglas, MD, Entertainment.ie & Chairman AOP Ireland

By Siobhán Brett, Sunday Business Post, http://www.businesspost.ie/ Julian Douglas, AOP Ireland chairman and managing director of Entertainment.ie, said that the allocation of large portions of online ad spend to international websites and ad networks needed to be stemmed, in order for online media to be made sustainable. "The vast majority of ad spend online is going on networks abroad and on Irish eyeballs abroad, however few," he said. "This has come into focus in the last 12 to 18 months." "Affordabilty is the driving factor behind the majority of spending decisions, irrespective of loyalty or trust in the environment that couches the ad itself. We're losing out, and this needs to change." Douglas's remarks followed last week's estimation by RTE's  head of television, Glen Killane, that foreign-owned media outlets took EUR 20 million out of the Irish market in 2011. The AOP's members in Ireland include IrishTimes.com, Independent.ie, TheJournal.ie, TV3.ie and Entertainment.ie. Online, the "Irish eyeball" is troublesome, according to Douglas, because although spend is travelling far and wide as advertisers strive to obtain maximum reach, the effects of more detached advertising can be largely diminished. Last March, the AOP released findings of a study of online engagement which found that Irish internet users were more than three times as likely to trust Irish content sites compared to social networks and almost twice as likely to trust them over portal sites. "The scattergun approach is totally haphazard," Douglas said. "An Irish consumer may not even notice advertising, depending on context and on where it crops up. The eyeball is important, but you can't lose sight of the effect of engagement or affinity to a particular site or publication. Ads and their backdrop work well when in partnership with one another." Why, then, are advertisers opting to buy from foreign networks? "It's cheap. That's the main reason," Douglas said. "We know price is a big consideration -- budgets are being cut across the board. If advertisers are presented with a situation where they can buy something for less or for more, they'll buy it for less. Our point is that an unknown site or network online is unguaranteed." He pointed out that the globalisation of media-buying online was no longer restricted to digital media in the traditional sense. Thanks to a sharp increase in smartphone and tablet use, he said, TV and radio were also beginning to grapple with fragmentation of audiences and advertising. "Their target market is just as likely to be listening to Newstalk as it is to a jazz station in New Orleans online," he said. "While it's fair to acknowledge that an Irish customer can be anywhere on the web, if advertising is deemed to be out of context or if it's presumed to be irrelevant because of the medium, it simply will not work." Despite the ongoing battle for ad business, Douglas accepted that digital was growing and that digital publishers were faring reasonably well. "Even so, we have to keep watching this. If it isn't corrected, we will suffer, and Irish media will suffer as a whole," he said.

About AOP.ie

The Association of Online Publishers (IRELAND) has been established to represent Irish digital publishing companies that create local, original, branded, quality content. Media companies from diverse backgrounds such as TV, pure online, newspapers, radio and magazines form the backbone of this industry body. Current members are The Irish Times, The Irish Independent, RTÉ, TV3 and entertainment.ie. It is felt that there is an immediate requirement, not currently being addressed, to promote the particular value that our companies represent to our audience and our clients. In the UK the Association of Online Publishers research and communicate on behalf of their members. The Association of Online Publishers (IRELAND) will serve to help its members fairly compete in the marketplace and will act as a voice so that advertisers, the media and the public clearly understand the benefits that quality, local digital publishing provides. Formed in 2010, AOP Ireland publishes original research, hosts forums, awards and conferences, covering a range of topics from managing online communities and adapting content for mobile, through to optimising partnership opportunities, SEO best practice, behavioural targeting and audience measurement.