Thinking’s Internet Management Newsletter takes a look at issues that affect audiences and audience behaviour on the internet.
 
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In this issue
1. Directions
   1.1 The Old and New Economy
   1.2 Fast Company - Directions on Getting New for Old
   1.3 B2B - Where Business will be in 2000
 
2. Search Engines
   2.1 The Girl Who Married a Bear
   2.2 Thinking Results
 
3. Benchmarking
   3.1 Where are You on the Internet?
 
4. Email Marketing
   4.1 Customer Service - Where is it on the Internet?
   4.2 Has Traditional Advertising Stopped Jingling Those Bells?
 
5. Site Moves
   5.1 New Sites
   5.2 How to Achieve 80%+ Success
 
6. Risk Management
   6.1 Oops. The Perils of Not Managing Your Audience Properly
 

   

1. Directions
1.1 The Old and New Economy
The recent mergers between Time Warner/AOL plus Warner/EMI have brought to the fore the question of old and new economy businesses.
 
Most of today’s large, multinational corporations were established, and thrived under, a manufacturing economy. BHP, General Motors and Ford, Telstra (or Telecom as it was known then), Qantas, Time Warner, and a raft of others are examples. The biggest challenge for these companies is to make the transition to the information economy.
 
Their biggest risk is that they bring along all the arrogance they could afford to display in the old economy. Today’s institutions are changing too quickly to adopt this attitude. One such institution is The London Financial Times. Over 100 journalists have been hired and 35 more are being sought to work exclusively on its internet products.
 
Peter Martin, deputy editor and editorial director of the newspaper’s internet activities: “You have to be seen to be trying hard to get it broadly right on the internet in order for your core newspaper to have any credibility.” Amazing. What Peter Martin is suggesting is that if you’re not attempting to get it right in the new economy, then you’re not a credible company.
 
However, when all the roads are new and there are no road signs, whose directions do you follow? How will you plan your journey to destination-e?
 
1.2 Fast Company - Directions on Getting New for Old
Fast Company magazine put together the following seven directions in their Winter 2000 issue: Seven rules for making the move from the world of old companies to the world of Net companies.
 
Learn by doing. You can't remake your business into an online wonder overnight. So it's important to seek out a few quick hits - easy chances to improve your operation and to learn about the Web. The Internet does offer opportunities for companies to create efficiencies - with order-entry systems or inventory management - in little time, without massive investment.
 
Invent a new sandbox. Building a truly revolutionary new Net company from within is usually impossible: The human and institutional barriers are too great. To enact a transformational online strategy, you'll probably have to create a new company, with separate people, offices, and funding.
 
You have money? Good. Spend it! Big companies typically have access to more capital than startups do. That's a key competitive edge in the online world. Intelligent spending can put you in the fast lane to the Net.
 
Eat your own - or be eaten. Any new Net venture will likely cannibalise all or part of your existing business. Your choice: Stick to the old model and risk having 100% of an obsolete market, or make your own operations obsolete. It is better to eat than to be eaten - even if you're eating your own.
 
Speed rules. ( No, faster still! ) Get used to it: The Internet moves at a much faster pace than your old-line business is used to. New products appear and die in a heartbeat. Strategies collapse overnight. Be prepared to think fast, to act on little information, and to change all the time.
 
Seek out new life forms. The Net will require skills and capacities that your old company doesn't have. Be prepared to hire new people, enter into partnerships, strategic alliances, joint ventures, and investment relationships with organisations that you've never considered working with before.
 
Failure is not an option. ( But it is a distinct possibility.) The Net is a high-risk game, in large part because no one is sure what the rules are. Play to win - and be prepared to fail.
 
Thinking has put together a small booklet entitled “Road Signs to destination-e.” You will soon be able to download a pdf copy from the Thinking site or send an email to destination-e@thinking.com.au.
 
1.3 B2B - Where Business will be in 2000
According to all forecasters B2B (Business to Business) e-commerce will be the greatest growth area of the internet. There are a couple of reasons for this. First, while online consumer marketing is constrained by razor thin margins of 1-10%, business-focussed marketeers such as Dell Computer and Cisco are seeing margins of between 20-45%.
 
The second reason for B2B growth is the amount of transactions that are available. Bennetton sells an overcoat to a customer. However, the Business to Business transactions that have occurred prior to this sale are numerous: there’s the farmer who generates the wool, transport to market, distributor, designer, manufacturer, distributor and retailer.
 
According to Goldman Sachs, here’s the 2004 e-commerce forecast:

Source: Sep. 1999 Goldman Sachs
 
They predict that long-term, online transactions could account for 18% to 43% of B2B sales. No wonder there is a scramble to initiate online sales channels by B2B businesses.
 
According to the same source, 98% of all large companies will sell goods over the internet by 2000. Among those who have been online over three years, 42% are profitable. Is this just for internet companies who understand this new opportunity?
 
Take another look at the table. You would expect the computer industry to have the major share of online revenue, but look who is making the greatest inroads - it’s traditional industry categories such as agriculture, chemicals, energy/utilities and industrial equipment.
  To survive, these old economy industries have to embrace the new economy with greater verve than anyone else. To discover how your B2B business can become part of this trend email b2b@thinking.com.au.
 
2. Search Engines
2.1 The Girl who Married a Bear is not Pornography
Often the search function is a very inadequate method of having your needs fulfilled. Take this example: A destination-e affiliate runs a kids’ site called Planetozkids.com. He often takes a close look at his audience logs to see what keywords people are using to arrive at his site.
 
One such string was “nudepics/girl/animals.” Can you guess what they were looking for? What they found was the Myths & Legends section of Planetozkids and a story entitled “The Girl Who Married a Bear.” So, if people are on a search, how do you answer the search and fulfil the need in one function? Read on.
 
2.2 Thinking Results
One of the areas Thinking specialises in is Search Engine Optimisation. It’s where your audience goes to find you. If you don’t exist here, you might as well be invisible to a majority of your customers. One of Thinking’s main clients, and Australia’s largest companies, has consistently achieved No1 position in the highly competitive categories it competes in.
 
To many people, success in this area has more to do with luck and magic. At Thinking, we add a fair share of science. We have a team who does nothing else but search engine optimisation for clients. Their focus is how search engines are performing and changing and how to take advantage of those changes.
 
This was brought to the fore the other day when we witnessed one of the team listing sites into a Japanese and then a Canadian search engine for an Australian client. We could tell you the reasons for this and how the results were affected, but then the magic would wear off.
 
It’s a bit of science we don’t want to pass on to our competitors at the moment. You can start using this science today, email searchme@thinking.com.au.
 
3. Benchmarking
3.1 Where are You on the Internet?
The first phase of the internet has been to have an internet presence. However, what does that ‘presence’ represent? Are you in a well-trafficked area? Can your customers find you? What risks does the management of your website represent for your company? How do you rate against your competitors? What is your reach and share of voice on the internet?
 
Over 99% of the companies we ask these questions of don’t know the answers. The risk is that without the answers, how do you progress forward? After all, which way is forward, which way is up, or down? There is no benchmark.
 
Recently, Thinking completed such a benchmark for a large Australian corporation. Their website had thousands of pages, yet they had no answer to many of the above questions. A Thinking WebWorthy Report provided them with a number of answers and recommendations. It provided a snapshot of their online presence, a benchmark that brought to the surface alternatives forward and a definitive point from which to judge future progress.
 
Which direction are you heading in? A benchmark or WebWorthy Report like the ones we have completed for Australian Dairy Corporation and BHP will help define your internet presence right now. Start moving forward today, email webworthy@thinking.com.au.
 
4. Email Marketing
4.1 Customer Service - Where is it on the Internet?
Customer Service is best expressed by some form of interaction between customer and company that has a responsiveness and diligence from the service provider. But where is this on the internet? What technology will companies be using more of over the next two years to provide customer service?
 
Here are the five technologies that scored highest in recent research. Proactive email 72% Knowledge Base 56% Personalisation 46% Wizard 44% Autoresponse email 44% Email is by far the fastest growing form of interaction online.
 
It’s personal, it has been asked for and therefore it’s more believable than a direct mail piece that drops unsolicited into my letterbox or screams out to me from the television. For more proof see the following story.
 
4.2 Has Traditional Advertising Stopped Jingling the Christmas Bells?
With the advent of the internet, it seems traditional advertising is less of a sales driver to online purchases. Over Christmas 63% of respondents to a recent survey said they found their online retailers by responding to email promotions, while coupons achieved a 43% response.
 
Traditional advertising had only been a factor to 29% of respondents. This highlights the value of email communities and the benefit of maintaining them. Start investing in your email community now and you’ll reap the benefits well before Christmas 2000. Start your email newsletter today, email merrychristmas@thinking.com.au.
 
5. Site Moves
5.1 New Sites
There are a number of new sites and site updates Thinking is establishing for clients. Among these are:
 
Repco Auto Repair: The first stage of the site has just been launched. The site provides the company with an internet presence. It has been designed to provide customers with a rich source of information on their vehicles as well as retail offers that will drive them to one of the over 400 Repco Auto Repair Dealers around Australia.
 
Air International, a tier-one supplier to the automotive trade is updating its site to add content and further portray itself in a new light to its growing international audience.
 
Stott’s Correspondence College is a 100 year old company that is moving quickly into the information age. Thinking is developing its site to give customers access to over 350 Stott’s courses.
 
5.2 How to Achieve 80%+ Success
One of the most important lessons learnt by Thinking’s development team is in navigation. The web is still young and the object of most sites is to ensure customers feel comfortable and know where to find the information they are looking for.
 
A few sites we’ve been called in to perform major surgery on have contained navigation items such as “one level up”. We don’t know what that means or where it will take us. Like most consumers, we don’t think in terms of ‘levels’ when searching for information. Make sure your website uses the same mental models as your customers or you’ll lose them. Your navigation has an 80%+ success rate when structured to a customer’s mental model. When it’s not, the success rate falls to a paltry 9%. Is it time to update your site? Make it more customer focussed, email navigate@thinking.com.au
 
6. Risk Management
6.1 Oops. The Perils of Not Managing Your Audience Properly
As we were preparing this newsletter, Mark Bergin who is a Mercantile Mutual customer and also a financialpassages.com subscriber, received an email that contained the MercAdvisor Annuity Codes.
 
These are a series of Codes that inform financial advisers what they should charge you and where Merc sees the market heading. Mark Bergin is not an Adviser. The email must have been sent to the wrong database. This shows the perils involved in managing your different audiences and controlling the flow of information.
 
Over the years, Thinking has been heavily involved in setting up release protocols with major organisations to ensure this situation doesn’t occur. Unless the correct methods are implemented from the beginning such risks will always arise. A major risk is the question your customer is entitled to ask: “If they can make such mistakes with their own information, what mistakes are they making with mine?” For information on how to avoid such risks email minimiserisk@thinking.com.au.
 

 
THINK MAIL is Thinking Australia’s Internet Management Newsletter. It is compiled and written by Mark Bergin and Joe Di Stefano. For further information contact Thinking Australia.
 
Thinking’s mission is to help our clients establish, develop and maintain successful internet brands. We help them complete the transition from mere internet presence of their brand to the more important phase of internet - brand management which covers the management of their “voice”, “experience” and “audience”.
 
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