OPINION: Overcharging dotcoms can only backfire

I have a bit of a thing about wooden bowls. In recent years my mother, girlfriend and several close mates have received wooden bowls as presents and they’ve all managed to look pleased. So I was rather chuffed to discover a whole shop full of the things on a recent trip to South Africa.

I have a bit of a thing about wooden bowls. In recent years my

mother, girlfriend and several close mates have received wooden bowls as

presents and they’ve all managed to look pleased. So I was rather

chuffed to discover a whole shop full of the things on a recent trip to

South Africa.



Given that a slap-up three course meal in SA rarely costs much more than

a fiver, I was sure I’d get a good deal or two in the bowl shop. Just

one problem - this was a little local shop and as I, a luminous white

boy with a funny accent, walked through the door, the shop owner’s eyes

lit up with pound signs as she mentally quadrupled the price of every

item in the shop.



Excuse the analogy, but certain TV sales houses and national press ad

teams seem to have reacted similarly to the arrival of dotcom

advertisers in the TV market. They are inflating prices, safe in the

knowledge the net companies have lots of money to spend and are

desperate for airtime.



There is an inevitability about all this. As the sales houses in

question have pointed out, this is simply a case of market forces at

work. The bowl seller said much the same thing when I attempted to

barter prices down to the levels a local might pay.



But the difference is that she did not expect me to return to her store,

whereas the ITV companies and the national papers expect the net

companies to swallow the high prices and come back for more.



This seems a mite complacent, and it is telling that Channel 5 has bent

over backwards for the dotcoms while radio and outdoor sales houses are

generally offering the same rates to dotcoms as they are offering to

traditional advertisers.



Catherine Jacobs, sales director at Virgin Radio, comments: ’I don’t

think you can raise prices. We’ve tried to treat the dotcoms just like

other companies, rather than simply lining our pockets.’



David Pugh, managing director of Maiden, echoes these sentiments and

says outdoor companies are doing everything they can to ensure the

dotcom ad boom is more than a 12-month phenomenon. Interestingly, one of

the tactics employed by Maiden is establishing good contacts with

venture capitalists. Sales people with a yen for internet pounds would

do well to follow this tip, given that it is still the venture

capitalists who call the shots and who will propel the next generation

of net stars into the media.



The ITV sales houses could learn from their less powerful rivals. In an

environment where fmcg giants are slashing their brand rosters and

complaining about ITV audiences, where there is no strong hand on the

ITV tiller, and where the f-word (fragmentation) crops up almost hourly,

now is not the time to risk alienating new customers.