Internet Marketing textbook.pdf - Vula

Introduction to internet marketingCHAPTER 1South African internet usage has more than doubled between 2000 and 2009,currently sitting at 6.8 million people (or close to 14% of the population).Accelerating growth started around 2007, when connectivity prices began todrop and service providers started competing in earnest to get a share of therelatively small market. The government’s growing appreciation for the value ofimproved IT infrastructure is leading to the gradual growth and availability of newservices at lower rates; however, this process has been slow.In addition, the advent of new undersea telecoms cables, notably SEACOM,has boosted connectivity and allowed internet service providers (ISPs) to offeraffordable and fast uncapped broadband packages. The broadband usagepenetration is sitting around 9% currently. This may seem low, but for a countrythat only had 500,000 subscribers 18 months ago, it is showing a definite upwardtrend. Mobile 2G and 3G networks are widely available throughout the country andare well used due to the wide prevalence of cellphones, over 60% of which canaccess the internet.4.2.2 Commercial forcesOver 80% of South African web users shop online, with 50% stating that this isthe main reason that they used the internet; of these, 41% spend between R800and R4,000 a year, while another 13% spend over R8,000. There were over 1,014online retailers operating in a market that was worth R929 million in 2007 (notcounting the R1.8 billion spent on online air ticket purchases). Online banking isalso an extremely popular service, though it is growing more rapidly in the mobilemarket: First National Bank alone has 2 million registered customers who usecellphone banking.Unfortunately, in comparison to worldwide trends, South African online marketingspend is very low. In 2009, online ad spend was R419 million (though this doesn’ttake into account money spent with Google, which doesn’t release its financialnumbers and which likely makes a considerable contribution to the amountthrough its AdWords program). This compares unfavourably to the estimatedR22 billion spent in the same time on TV, print and radio advertising. The mainfactors that contributes to this is the small internet population (and even lowerbroadband usage) in South Africa. However, the picture is improving: online adspend increased by 31.4% between early 2009 and early 2010 and is growingfaster than other sectors. This is in line with global trends.4.2.3 Cultural forcesOne of the most important factors in the growth of the web is the creation ofa unique South African web community. South African web users are also socialcreatures: Facebook is by far the largest service with 3.8 million profiles (and1.6 million of those are accessed from a cellphone). Around 30% of web usersaccess YouTube, use MXit and have a Twitter profile. The LinkedIn South Africancommunity is the tenth largest national community on the network.Many are also turning to local alternatives and locally relevant websites to startconversations and interact in uniquely South African ways. This is already becomingevident. One month before the start of the 2010 World Cup, the word “vuvuzela”became a trending topic on Twitter because of an impromptu vuvuzela-blowing12GetSmarter Internet Marketing textbook