Last week, we signed a general partnership agreement with the first league football club FC Zbrojovka Brno and, to make matters worse, another agreement with another first league club – SK Dynamo České Budějovice.
We get a lot of questions about why we’re doing this. Wouldn’t it be better to try online advertising instead or maybe not invest in more hardware.
Our current situation
We are the largest hosting on the Czech market for many years. Currently, we host more .cz domains than three other competitors (in order) combined. The growth of our traditional services, of which we have the most, has been steady. Dedicated servers are still mostly sold out. In addition, we have launched new services WEDOS Cloud, WEDOS CD and others like WEDOS WebSite, WEDOS Apps are preparing. All of them are already more interested than we expected. As far as development is concerned, we have hit limits. Now we just have to finish everything calmly, gradually tweak and improve… There’s a lot of tuning, but we’re working on it.
We have hardware to spare. It’s not like we’re holding a couple dozen servers in reserve. We have literally hundreds of servers in our warehouses. For example, we have 13 fully staffed HPE Moonshots with 45 physical servers each available (and completely free). That’s 585 free powerful servers. More new HPE Moonshots are plugged into the rack and waiting for their customers when we launch our planned advertising campaigns. We’ve got plenty. We don’t need to buy more for the next six months, even if we grow steadily.
Of course, we invest in hardware beyond the plan. Just this week, a new storage device arrived in DC1 for testing, with a list price approaching CZK 8 million. We want to test it as an alternative to the current solution for NoLimit and WMS, or whether it could also serve as an additional disk for VPS ON and WEDOS Cloud. But let’s not get ahead of ourselves. It all depends on how the tests turn out and how easy it will be to integrate into the current infrastructure. Of course, if we find that it is better and fits, we will take it immediately and not one 🙂 By the way, if the tests of the new storage turn out well, we plan to have the second one in a copy in our second datacenter and the third one (for selected data) probably completely outside. All in an online synchronous copy. This is quite an extraordinary solution.
We’re doing well. Last year was a record year despite higher investments (EBITDA of CZK 8.99M, an increase of 165.19% compared to 2018). This year our accountant “dissolved” the last losses from previous years (including the DC2 construction) and we ended with a net profit of just over CZK 6 million. And we invest in development and evolution over the long term. We are investing in other services and also in the second datacentre mentioned above, which has already cost over CZK 100 million. It is so that our second datacenter DC2 is just getting started, but it is already almost completely paid for (7% missing). Now all we need to do is fill it with 10,800 servers, which thanks to oil cooling we will acquire and operate significantly cheaper.
And we already have a project and approvals for another data centre DC3, where we are waiting for the building permit. This is going to get much, much bigger. We have prepared a plot of 10.900 m2 near the future D4 motorway (Prague, Písek, České Budějovice).
We’re not throwing money out the window unnecessarily. We calculate everything in detail with a long-term return. We use branded hardware, proven energy-saving technologies and only invest where it pays off. This also applies to advertising and promotion.
In 2019, we started to gradually reduce online advertising because it was already overpriced. In 2020, only what really works and has a real benefit will work for us. And we don’t just do regular advertising, but larger advertising campaigns that are more effective as a whole.
Online advertising has been a big problem in our opinion lately and we are not afraid to say that in some cases it is a huge scam on advertisers. Most of the accesses from online advertising (sometimes up to 90%, according to our findings) are from mobile phones, where it is often just mistakes and unintentional clicks. Advertisers are paying for something they didn’t want in the first place.
So advertisers are paying and paying more and more, and yet there are more and more “click-throughs” as more and more internet traffic moves to mobile devices. We’ve even witnessed a large and expensive ad campaign where 98% of all clicks were from mobile devices and the vast majority (almost 100%) of those clicks were in error. Such a visitor immediately closes the page and never continues. How else can you explain approaches where the server generates only HTML page and the browser does not ask for other requests (CSS, JavaScript, images) or downloads only part of them. Such a visitor will not even visit any other site and will never order anything.
It’s especially sad considering that online advertising is getting more and more expensive and yet less and less effective. We have server statistics for all the sites hosted by us and that’s quite a large sample. Of course, in our BigData log analyses, occasionally an online campaign pops up and you wonder what people are paying for.
Times are changing and online advertising is… increasingly nonsense… We hear everywhere in the media that online advertising is the only thing that has a future, but our opinion and experience is quite different.
In the less than 10 years we’ve been in business, we’ve spent less and less (and yet it’s getting more and more expensive) on online advertising, and yet we’re doing better and better…
We’ll give you one piece of advice on online advertising that’s worth trying and you’ll be surprised. If you don’t have anything that really needs to be advertised online and with a focus on mobile, then don’t buy online advertising or always turn off display on mobile phones and mobile devices. Otherwise, you’re throwing money away…
We have a lot of experience with offline advertising. We tried everything possible and gradually we were paying more and more money for this kind of advertising. In the end, we found that offline advertising works better in many ways for a company that only provides online services 🙂
Why first league football
We sell quality and good service. We are not under the illusion that everything is perfect and flawless. We have set up relatively strict quality measurement processes and can thus detect very early what is not working as it should and take appropriate measures to correct it. Who can say, for example, that they monitor all the sites of all their customers to make sure they are working properly? That is, not only if they are available, but also if the response has not deteriorated. We monitor everything and any problem is immediately alerted and dealt with immediately. Some of the outputs can be viewed in real time at status.wedos.hosting. Take into account that we have over 1,500 physical servers and other elements (switches, routers) in operation.
If you sell quality services that are among the best on the market, all you need is to promote your brand. Your future customers need to see it, they need to know that we are not a garage company that will be killed by the next crisis. We have been experimenting with this for several years.
WEDOS is not really a garage company 🙂 We have 2 high-end datacenters (and they are not small). We are about to start building a third (and much, much bigger). We have various certifications including ICANN accreditation. Although WEDOS has been around since 2010, it is based on hosting experience since 1997.
Our offline promotion began with the support of the first league club HC Motor České Budějovice, where we have been a sponsor for about 5 years. It’s true that there was a lot of support for the regional dispute. In the beginning, we mainly targeted our advertising at the stadium audience. We tried different stickers, contests, spectator events, giveaways, etc.
Last year, we had the opportunity to sponsor the football team SK Dynamo České Budějovice, which was promoted to the first league. It was a big and expensive decision. We made arrangements in 2 or 3 short meetings, when we only had time to drink coffee. We knew we had to go in as a general partner to make it make sense. To be honest, we didn’t quite agree on whether to go for it, because the reach of such advertising is hard to measure. In the end, it was more or less decided that it was a problem to spend money reasonably online.
It went well, despite the 2019/2020 season being disrupted by the coronavirus. Actually, it exceeded our expectations. This has visibly strengthened WEDOS as a brand and combined with other influences, 2019 has been our most successful year yet. That is why we were looking forward to continuing our cooperation for the next season.
We have found that this is exactly what we need for further growth. And we still saw huge gaps from our side. We understand how much potential there is, we just need to learn how to work with it properly.
Why we went to Brno
Unfortunately, the negotiations in České Budějovice were complicated by the arrival of a new general partner, who initially intended to buy the club. He naturally wanted a significant part of the advertising space and promotion for himself. The situation was a bit unclear and we knew that we would no longer be the general partner of SK Dynamo ČB, so we thought of trying to inquire elsewhere.
We are the market leader and we want to be presented as the market leader. So we’re only interested in the best areas. Plus, in our experience, it’s just best to buy the best 🙂 . So we want the ad on the front of the jersey, not hidden somewhere. Three times cheaper, but the kind of advertising that no one sees.
In total, we asked 9 first league clubs about the possibility of a general partner. In 8 cases they would be happy for us even though we are quite demanding. We had practically less than 3 weeks to act. The situation is now uncertain because of the coronavirus and sponsors are cautious. Most clubs are in a very bad and precarious economic situation.
As you already know, we have finally become the general partner of FC Zbrojovka Brno. There wasn’t much time for the whole event. We had to evaluate not only the risks, but also how worthwhile the campaign is. The people who negotiated with us at FC Zbrojovka Brno were very proactive and once they understood what we were about, they showed us what other options we actually have with them. So we could start thinking about further cooperation. You can’t just put money somewhere and then watch, it doesn’t work that way 🙂
The negotiations in Brno were the best, the most acute and the most forward moving.
To a large extent, FC Zbrojovka Brno was helped by the fans. We did some research on how they support the club on their website and social networks. Whether we took it in absolute numbers, in proportion to the size of the region, population, etc., it always worked out very well. Big brands like us, they pick up on that.
If you post on social media that you’re looking forward to the game, take a picture in the stadium or are sad about the result, it all adds up to measurable metrics. We see it, we read it, we evaluate it, because it helps us plan our next campaigns. It’s very simplistic, but let’s try an example.
As part of our promotional campaign, we previously had over 230,000 cans of WEDOS Energy and WEDOS apple energy made. We give them out for free as gifts with services, but also at various events of our partners. We think of them as carriers of advertising. If we pick and choose who we support and see fans taking, say, 1,000 photos at the stadium, we can assume that if we send a few pallets there and they get them for free, some of them will take a photo with them and do some advertising for us. Well, there is a difference if a club has fans who take 1.000 photos or 20.
And this is really the simplest example.
We also consider Brno to be an IT city, which can be seen in our statistics. We have 7.7% of all our customers there and the ratio should be less than 3%. We take into account the size and the fact that some of our customers are outside the Czech Republic.
Of course, we took other aspects into consideration, but that would be a long story 🙂
So we gave each other a high five and we are very happy. We had about 4 days to arrange the details of the contract, 5 days to cover the stadium (including the measurement), several dozen hours to print the jerseys.
Finally, we made the stadium in Brno into the WEDOS Arena and we look forward to the fact that this name will be associated with football in Brno for a long time.
Brno is Brno and it is clear that Zbrojovka Brno is a team with a great history. We believe we will be part of a successful era.
When the conditions are good, we also take České Budějovice
In the meantime, SK Dynamo České Budějovice made a major breakthrough in negotiations and offered us a main partner with adequate advertising for a good price. We sat down at the table and started calculating if we could pull both 🙂
It is not only about money, but also about covering everything with appropriate promotion and further cooperation. It’s going to be a big challenge, but without a proper challenge there is no great victory 🙂
So we gave ourselves a high-five in SK Dynamo České Budějovice and now we have a lot on our plate.
Is it madness to support 2 premier league football clubs?
We’ll evaluate it at the end of the season. But we have to make our marketing a little more relevant. On the other hand, we are one of the biggest entities that support professional sports in the Czech Republic and football. We estimate that we will be among the top 100 supporters of professional sports in the country.. and in football itself we estimate that we will almost certainly be among the top 10 companies in the country that support football. We believe that sooner or later the officials in this infamous sport will take notice and that our opinion will be taken into account in negotiations and decision making.
Last year, we wanted to quit and start a revolution. In the end it didn’t happen, but maybe it will happen this year. We’re not going to put money into a sport where something very slanted is considered equal. It’s a beautiful sport, but it has to be clean. So maybe you’ll hear about us like this.
Maybe in time we will write an open letter and fight for a better future.
Why is DNSSEC on the jerseys
Another common question is why we are there with DNSSEC Secure Domains. The CZ.NIC .cz Domain Registry cooperates with registrars on some joint marketing events. They have more programs that can be promoted. It’s Good Domain, MyID and DNSSEC secure domains. We use DNSSEC Secure Domainsbecause we’re comfortable with the association with safety.
We have other partners with whom we do campaigns, but specifically for football and hockey CZ.NIC is ideal. It has a product in a similar market position to ours. The .cz domain is reliable and the best for the Czech market. They just need to push the brand like we do.
Thank you CZ.NIC for your cooperation and we believe that we are doing good advertising for you, which is visible 😉
Conclusion
Over the weekend, we held the first two contests for tickets to both teams’ games. In the end, 19 of our customers went to the football in Brno and 17 of us went to the football in České Budějovice. Other competitions will continue. We just need to fine-tune all the processes. So follow us on social media(Facebook, Twitter, LikedIn).
We plan to meet our customers all over the country, wherever one of the clubs is playing. That’s a total of 17 away games for each club, plus any cup games. So we will have at least 34 opportunities across the country where we can meet our customers in the VIP areas of individual clubs. Plus, of course, the same number of games at home stadiums.
We are currently considering other campaigns to build on our support for football clubs.
We’ve got a lot of work to do. We are thinking of expanding our team with a couple of product managers who would take charge of individual services. It would free our hands for further marketing activities.