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Boundless bandwidth will create massive opportunities for SA's online advertisers

The recent launch of the Seacom undersea telecom cable signals the start of a fundamental shift in the South African Internet market that will bring along with it a wealth of new opportunities for online advertisers and publishers.

That's according to Richard Mullins, director at Acceleration, a global provider of digital marketing consulting, services and technologies. He says that while the short-term impact of the Seacom cable launch will be limited, the arrival of true competition in the undersea cable market will eventually have a massive impact on the amount of bandwidth consumers have to burn.

"Over time, the sharp increase in the available international bandwidth and drops in prices per megabyte for bandwidth will prompt end-users to spend more and more time on the Web and to use it for more applications," says Mullins. "Advertisers and publishers should be thinking about, and preparing for, the huge opportunities that this trend will create for them."

Mullins says that Seacom is already having an effect on Internet pricing in South Africa, but even more price reductions can be expected in the future.  For now, most service providers and operators will need to buy international bandwidth from the owners of the existing Sat-3/Safe cable to ensure that their international links are redundant, meaning that the price pressure on Sat-3/Safe will grow in the years to come.

"We have seen Seacom already have an impact on the market - for example, some Internet service providers and operators, including Telkom and MWeb, have moderately increased the bandwidth caps on their broadband packages while others like Afrihost have cut prices per gigabyte of data," says Mullins. "But this is only the start of a shift in the market that will take two to three years to play out. And we can expect to see investments in national and last-mile telecom infrastructure over the next couple of years also help to bring broadband prices down."

Mullins says that international bandwidth will become affordable and abundant in South Africa once additional undersea cables such as the West Africa Cable System (WACS) and the Eastern Africa Submarine Cable System (EASSy) go live.

"In the meantime, smart online advertisers and publishers are already preparing for a world where consumers take cheap and abundant bandwidth for granted," says Mullins. "Once bandwidth is cheaper and more plentiful, the way that connected South Africans consume media will change dramatically, in line with the trends already seen in the international market."

"Some changes in behaviour that publishers and advertisers can expect to see once consumers have more generous caps and lower bandwidth costs are that they will spend more time online in an average session, that they will start to rely on television and print for less of their entertainment and information, and that they will devour more streamed and downloaded rich media," says Mullins.

"Industry leading advertisers and publishers are thinking about how they will position themselves in terms of their content production models and how they will engage with their customers in this changed market," Mullins adds.

"They are starting to experiment with technologies such as rich media that will form a key part of their futures. Advertisers and publishers should also start to thinking about allocating more budget to the online channel."

"We are entering an exciting time in South Africa where the the costs and risks of experimenting with new models in preparation for the changes in the market are relatively low. There are some great challenges for Advertisers and Publishers to overcome, which will contribute to an increasingly effective and leading industry" " he concludes.

About Acceleration
Acceleration provides unrivalled digital marketing consultation, outsourced services and technologies to over 300 distinguished clients around the world. We have more than a decade of experience creating customised solutions that optimise digital marketing, automate complex processes, harmonise technology and maximise our clients' return on digital investments.

Headquartered in London, Acceleration employs expert teams throughout North America, Europe, the Middle East and Africa, and maintains strategic partnerships with industry leaders including Omniture, DoubleClick and Epsilon.

For more information, visit www.acceleration.biz

About Richard Mullins
Richard Mullins opened Acceleration's Johannesburg office in 2000.

Richard has played an instrumental role in the growth of Acceleration in South Africa, working with clients to identify their online marketing needs and establish effective online marketing strategies that deliver superior results. This is achieved through the implementation of technology services such as Advertiser and Publisher Ad Operations, Email, Paid Search and Site Analytics.

Richard's career includes tenures at Ogilvy and Mather and Saatchi & Saatchi where he worked with clients such as Unilever, Sun International, Nedbank Guinness, Toyota and M-Net.

Richard completed an honours degree in Communications.