RETHINKING THE REVENUE PLAN

Roger Chua, president of Internet business solutions provider Web Philippines, Inc., said companies that use the Internet as advertising medium have to carefully evaluate how online advertising would benefit their business.

Web Philippines is the company behind online recruitment site Trabaho.com and wedding portal Kasal.com. The company also does consulting for brand management, design &development, and e-business solutions.

Mr. Chua said companies should have a holistic approach in doing online advertising.

But first, they have to be clear on what they want to achieve with their ads. Is it to attract page impressions? Increase sales? Or establish branding?

He said most companies should first focus on their own Web site and on what it could offer clients who visit their site rather than rely simply on banner advertising.

As in any traditional retail ads, he said online advertisers must ensure that they have the inventory to service their visitors based on what they had promised to deliver.

The kind of online advertising would depend largely on the type of company and the products being advertised.

Mr. Chua said online advertising is most ideal for bookstore and music sites, for example, because they could easily go into e-commerce transactions.

Other sectors such as food and garments have to explore more appropriate models for advertising and generating Internet-based revenues, he stressed.

Mr. Chua believes that online advertising in the Philippines will "start to get better this year."

He said the Internet is a viable medium for establishing Web presence in order to target international markets. As opposed to participating in an international trade show, for example, Mr. Chua said the cost of setting up an online presence is much lower. He said more local companies may opt to advertise online as a way to expand their markets in a more cost-effective way.

For content providers that rely on online advertising, Mr. Chua suggests that they should continue to evaluate their business models and explore alternative sources of revenues. He said these alternatives may include e-commerce services, domain name registration, online surveys, Web-based mail service, among others.

DOWN...BUT NOT OUT

Denise Garcia, Gartner G2 research director, said diversification is the only way for the online industry to survive.

"Due to decreased growth and market domination by the top players, online media firms must diversify their products and services to supplement the income they expected to receive from online advertising," the Gartner official said.

GartnerG2 cites five additional revenue streams for online media that could augment the lack of advertising revenue: business services, subscriptions, licensing, e-commerce and international expansion.

The research firm defined business services as customized enterprise software services, audio/video streaming, store hosting, and management and Web-site tools and services.

These revenue areas, Gartner said, "would help online media businesses solve advertising growth challenges by expanding user bases, obtaining better demographic and targeting information from user registrations, and ultimately supporting sales to advertisers."

It added that advertisers want a more integrated approach in advertising in order to get better value for their money.

For those who may still be wary towards the merits of online advertising, perhaps the accompanying chart prepared by America's Interactive Advertising Bureau may offer compelling reasons to explore the potentials of the Internet for advertising and marketing purposes.

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