Successful online African businesses require 'big five'

Speaking at the Click to Connect 2011 conference this week in Bryanston, Johannesburg, former bidorbuy.co.za MD Nitzan Tal said any business must start with a plan, and aspire to be number one. He cited stickiness, viral marketing, monopoly, barrier of entry and globality as the 'big five' factors an online business has to take in account if it hopes to achieve its goals.

Choose media carefully

Tal described stickiness as being basically the amount of time users spend on one's website and how often they use it. "And there is nothing more powerful than viral marketing, which consists of word-of-mouth," he said.

Globality is an important factor for an internet business, he reiterated, urging businesses to enter into joint ventures as they have the potential to produce benefits for all sides.

"Choose your media very carefully, and put some thinking into your message. Don't go for a cheaper media, but go for something that will get you closer to your target," Tal urged.

Bid or Buy, which started as a modest website, has now over 700 000 registered users from a mere 140 in the late 90's. Its transactions volume now stands at just over R500 million, with R450 million of market capitalisation.

The Click to Connect 2011 conference hosted in collaboration with Digital Mark and Kagiso Media, revisited the one-year joint-venture between Kagiso Media and MSN, which paved the way to the creation of howzitmsn.co.za, a website believed to be currently South Africa's biggest home page, with 52 million page views per month.

However, as technology advances and revolutionises the internet and the way people communicate in its environment, some critics believe portals have become irrelevant and should be confined to museums. Alexandre Michelin, MSN executive producer for Europe, Middle East and Africa, refutes this criticism, saying portals remain relevant, and reports of their death are greatly exaggerated.

Overlap between content, search and social network activities

"Portals help consumers make sense of an increasingly complex world, 'multi-homing' is a common practice and information overload is a real issue for consumers, and there is now a large overlap between content, search and social network activities," Michelin said, adding that users want to aggregate multiple tasks on one page.

Furthermore, Drummond said media and experiences are more connected than ever. "In developed markets, the lines between TVs, PCs, game consoles and mobile devices are blurring. More channels are showing up in more places, and as all media become digital media, companies are gathering incredible amounts of customer data," he noted.

There is a huge shift in media buys, and a growth of emerging ads models and advertisers can expect more than a 30-second ad, according to France-born Michelin.

He said the global online video market is expected to grow by 225% to US$14 billion in 2014, citing Generator research 2010 figures, while the mobile ads market is expected to grow by 240% to US$21 billion in 2013, as forecast by Forrester in 2009.

And behaviourally-targeted advertising campaigns average 2.68 times the price of non-targeted 'run of network', according to a 2010 NAI Survey.