Studies show that 70 percent of all organisations are there be-
cause of competitive pressure. Going online for many was move out of necessity rather than desire.
“Build me site just like my competition” was catchcry for while, says website developer Paul Hashfield, chief executive of Webmasters Network.
But, thankfully, it’s changing, he says, and Kiwi companies are starting to consider the web as part of their business process.
Around 12,000 New Zealand companies now have websites for variety of reasons, most for information and education.
Hashfield believes there’s one area that we’re still lagging behind the main world players — and that’s who drives the Internet within an organisation.
“Many organisations still consider the Internet the domain of the IT department, or the new graduate from Massey or wherever.
“Not lot of companies have the Internet sitting in the marketing department. Usually we’re talking to IT people who’ve not had marketing training but they’ve been expected to somehow drive traffic to the website.
“So we know company’s really understood the power of the Internet when they get their marketing people involved.”
While that’s happening more frequently, we’re still behind other countries, he adds.
Getting FlyingPig off the ground
Hashfield worked with FlyingPig, the country’s first online retailer (clicks and mortar versus the traditional bricks and mortar retailer) when it started last year.
The name was already chosen when he became involved, but Hashfield agrees the name has been helpful to its success.
“It’s irreverent, and for new start up company there’s no baggage with name like FlyingPig. Another aspect is it doesn’t label the company in one particular area, so FlyingPig can get into all sorts of areas that may be an established brand — may be not.”
And of course, the whole idea of pigs flying suggests anything’s possible which sums up retail online.
“So there’s fresh approach, no barriers, no blinkers and that’s what we seek to do with their advertising.”
Webmasters was approached by FlyingPig firstly, to help the marketing department work through the basics of what drives online traffic; secondly, to support the marketing department in monitoring what goes on, and measuring it effectively, and thirdly, to plan and buy on other sites on their behalf.
“It was real ‘first’ for this country. You have to remember no one in New Zealand was doing this. Advertising agencies traditionally stuck with traditional media — and very few were looking at online advertising.” The three main ways of driving traffic to the site, he says are:
1. Word of mouth is very strong. Most people are introduced by friends.
2. Online advertising. The beauty here is you can control the number of people you’re reaching, and control the sites, by where you place your advertising.
3. Search engines.
Hashfield looked at overseas models when developing the online strategy. “The difference between New Zealand and other countries is in the US for instance, you have critical mass, so if you reach enough people you’ll get enough sales.
“In New Zealand we have l.l million people online. This is third of the population. While that puts us up in the top five countries in terms of web penetration, that’s still 1.1 million. So our strategy was to get in front of huge proportion of the population.”
In the first week they did that.
“We generated campaign of five million impressions. Impressions means million viewers of the website should have seen FlyingPig at least five times.
“We went right across the major sites, Xtra, Clear Net, ihug, TVNZ, and the NZ Herald site.
“Our strategy was very much online, it’s an online store of course, secondly it’s just click of the mouse — that’s line of least resistance. So that’s the first place you want to be — online.”
Another first was launching on offshore sites such as Yahoo! and Alta Vista. Hashfield explains: “We identified New Zealand viewers of offshore sites, and put the advertising in front of them also.”
Monitoring — what pulls what?
Hashfield can identify very precisely which sites send people through and which creative is pulling people.
“We analyse every week not just what sells, but which creative pulls people — some creative pulls better than others and some sites pull better than others.
“So we’re in closed loop marketing environment where the feedback is coming through quickly. Schedules are changed every week. It’s far more reactive form of marketing.
“You get burnout lot quicker. For instance, what was three month campaign in traditional media is compacted to two weeks.
“The trick is to look for the point of diminishing returns, so it’s important to monitor precisely and see where it starts to tail off.
“I watch to see two things — one is the impression level — have we reached enough people. Then the percentages. Here the number of people is percentaged out and you might say two to four percent click-through is high, so if it drops from 1.5 percent to below one percent, then it’s probably time to change the creative.
“You can do two things — change the product or change the creative.” He explains that FlyingPig had campaign around John Grisham’s latest book that began by letting people read chapter. “This probably burned out after three days.
“The second part was price offer of $19.95 versus around $49 at the bookshops. That took longer to burn out — about 14 days. lot of people were talking about it, and kept clicking-through.
“Every product burns out differently, competitions are effective, you get good response to those — with prizes like winning books or videos for year.
“The thing is it all works lot faster online — there’s lot of monitoring and you have to have creative ready to come out.”
In terms of growth, it’s predicted that by 2003 there’ll be two million New Zealanders online, two thirds of the population.
“User growth has until now been constrained by having to use PCs at around $2000. But email availability on mobiles brings internet access, so we’re no longer constrained by PCs and the web will be an everyday form of access.
“This means you can carry it around with you — check your emails, or read the web wherever you go.
“Not too long ago web users were characterised as highly educated, upmarket, and male biased, but now it’s 50:50 female to male, and no longer the high socio-economic model — it’s becoming more average.”
So what’s the role of ad agencies?
“I see the role of ad agencies as custodians of the brand. They make sure the brand attributes and personality of the brand are interpreted correctly on the web. That’s an important role.
“We work closely with them to ensure that what we interpret online is in line with those brand attributes.
“So you could say they’re focused on the look and feel and brand interpretation, and we’re focused on the usability of the site and its navigation. Ideally it works when we’re all briefed at the same time and everyone has clear view of the objective.”
Cynics will ask is this another marketing expense? “Nearly all the work we do is designed to save money. If we can’t analyse cost saving, we haven’t dug deep enough for client.”
The value of the Internet is in cutting costs of dealing with customers and improving customer service, giving them 24-hour by seven-day access. So profits should increase because you’ve reduced your costs.
But the key is measurement
For instance one of the reasons FlyingPig’s costs are so low is they have just in time method of distribution. This cuts their distribution costs, and gives them low prices.
“When you add the fact we monitor the point at which campaigns burn out, that’s also saving. There’s no wastage there. So there’s number of areas to save money.”
A website must add value
The promise of the Internet is that it brings you closer to your customers. The key is to add value to your product or service and give the user something to