media.toolbox recently spoke with Steve Haite, the Regional Director for MSN Central Europe, Middle East and Africa, about where the South African market fits into MSN's strategy.

Q: Where does South Africa figure in the bigger picture at MSN? Is it an important market for you?

Steve Haite: MSN is a global operator with information and communication services being offered in 40 countries in more than 20 languages. All countries are important to us, but obviously depending on the development phase of the country and the internet penetration and share of online advertising, the size of the opportunity and indeed MSN's position varies from country to country.

We are delighted at the high growth of the online advertising slice of the whole advertising cake in 2004 [in South Africa], and the progress made by MSN South Africa together with our sales house, Habari Media, over the past 15 months make us very positive in our view of the coming fiscal year. We have been seeing double digit growth in the user base of both Hotmail and MSN Messenger and not only has the revenue from online advertising shown a very high increase but we are noticing continual increased interest from the major brands.

Q: What are your user statistics for South Africa? (Users from SA using MSN, Hotmail etc.)

Steve Haite: MSN has 800 000 unique users who visit our portal at least once a month. The Hotmail user base has grown to more than 300 000 accounts and our MSN Messenger user base is now at 150 000 accounts and increasing by 3-5 000 users every month. The recent product improvements which culminated in the launch of MSN Messenger 7.0 have been very favourably received by our users and we expect a sharp upturn in the growth figures over the next 12 months.

Q: What other African markets are you or do you plan to be active in?

Steve Haite: MSN has major portals and full scale operations in Egypt, Arabia in general and also Israel. These portals are run with partners in the form of Joint Ventures or franchise operations. In addition MSN has a Hotmail and MSN Messenger user base in every African country. Today we already run advertising on our Hotmail and MSN Messenger properties in several African countries and Habari Media has been actively building this business over the past months.

Q: MSN has banned pop-up advertising from its sites because users hated it

Steve Haite: MSN does regular user and advertiser satisfaction surveys. whereas the pop-ups are a popular ad format with advertisers since they attract attention and lead to an above average click-through rate, they are consistently cited by our users as being the top pain point in their online experience. Indeed the user dissatisfaction with pop-ups of all kinds was so clear, that MSN decided to ban pop-ups from their online sites.

Q: What are the other dislikes of Internet users which sites like MSN need to look out for?

Steve Haite: Users are not generally against advertising online, but they expect just as in the offline world that the advertising be relevant and limited. The potential of explicit and implicit personalisation will allow MSN to better understand user's requirements, needs and desires and ensure that they see less advertising and that this advertising is both expected and relevant. This development will not only increase user satisfaction but also mid-term all advertisers will profit from it, as the click-through rates will improve and the branding and awareness impact of online advertising will be higher and more sustainable.

Q: Is MSN involved in the interactive TV and mobile markets? What have your experience been like thus far?

Steve Haite: In the US there is a MSN TV division, however this product is not offered outside of the US. MSN offers both the Hotmail and the MSN Messenger service via mobile phones based on the use of SMS. This service is offered today via more than 35 mobile carriers, but is not yet available in South Africa. Discussions to launch the service are planned.

Q: What does online media offer marketers that they cannot find elsewhere?

Steve Haite: The proven cost efficiency of online advertising cannot be rivalled by any other media. The combination of online advertising with TV, Radio or even print advertising has consistently lead to improved results without any increase in the overall cross-media spend. As rich media ads become more popular and more and more users move from narrow band to broad band, internet offers a TV-like experience. Even today the creative potential of flash ads allows complex messages or several minor points to be successfully transferred to the user. Finally online advertising is an accountable offering very clear statistics, tracking not only of impressions and clicks but also to the extent that the cost per lead or even the cost per dollar of sales can be exactly determined.