Focus on the customer, a keen eye for trends and judicious growth objectives are vital to surviving business ups and downs, according to marketing specialists who recently discussed lessons learned from upheavals in the Internet industry.
The last 10 years were marked by the dot com boom and bust, the rise of e-commerce and the emergence of Web 2.0’s social networks but businesses that successfully mixed adventure with caution weathered the “roller coaster ride,” said speakers at the 10th Annual Digital Marketing Conference held in Toronto last week by the Canadian Marketing Association (CMA).
“The Internet is people,” Ken Schafer vice-president or product management and marketing for Tucows Inc. of Toronto, paraphrased a line from the 1973 sci-fi movie Soylent Green.
Schafer was among a panel of three Web promoters who recounted lessons they learned from a decade of digital marketing. The other two panelists were Ted Starkman, executive vice-president and general manager for The Shopping Channel and Adam Froman, president and CEO for Delvinia, a digital agency based in Toronto.
Some businesses make the mistake latching onto a new technology or feverishly seeking the next killer app when they should be concentrating on seeking benefits for their customers, Schafer said.
Tucows started out in 1993 as a domain name registrar. The company “reinvented” itself several times and now provides services and software for Web hosting firms and Internet service providers (ISPs).
Current cyber stars such as Facebook and Flickr operate through Web 2.0 technology but owe their popularity and success to their ability to enable “people to read about, see photos and connect with people they know,” Schafer said.
Froman of Delvinia said he now realizes that any slump or boom in an industry will eventually lead to a “correction.”
“The key is to build in a pragmatic way, recognize the trends and what’s happening in the environment, be responsive to it and deal with it accordingly.”
Businesses should always be on the lookout for the “WTF (what the f***) instances” that have the potential of defining the industry direction, Froman said.
For instance, all three executives said they were still in “awe” at the power with which the wave of social networks has lifted the Web industry in recent years.
“The phenomena indicates that the consumption of media has caught up with our vision of what Internet could be,” according to Froman. Technology such as instant messaging and rich media sharing were available sometime ago but consumers were not ready for them until recently, he explained.
While the three panelists stressed the importance of “experimenting and taking risks” as well as investing in research and development, they also recommended taking a safer path in growing the business part of a company.
Companies should build upon “sound business fundamentals,” according to Starkman of the Shopping Channel.
Rather than going on a spending spree, his company leveraged existing assets when it set out to establish its Web presence some six years ago.
The Shopping Channel’s Web team worked out of a back warehouse but also made good use of the company’s existing TV-side talent and customer database, Starkman said. The Shopping Channel has grown from annual sales of $3 million to $40 million and expected $100 million in sales this year, Starkman said.
“We built the business depending on the funding available,” he said.
Instead of spending money to create another system, The Shopping Channel integrated these valuable assets into one system so that nothing was wasted.
“It didn’t matter if the orders came from TV viewers on the phone or transacting via Website, the warehouse viewed them the same way.”
The company, however, didn’t scrimp on analytics, Starkman said.
“Some might call us cheap, but we measure everything (calls per minute, deals per minute, contribution per minute) because it tells us how our business is doing.”
Froman agrees. He said quality and validity of data is extremely important to Web marketing because the client always wants to know “where the data came from and what does it mean.”
In the near future, Schafer of Tucows sees more and more company’s moving towards a “Web first” business model where “all marketing efforts will be driven towards the company’s Internet presence.”
A good example of this, he said, is Apple’s advertising strategy. “The magazine and TV ads appeal to emotions and pull in the customer. But if you want to learn more about the product you have to go to the Website.”
He said this is largely the result of changing consumer attitudes. “People are now accustomed to researching products on the Web before they make a purchase.”
Another trend that North American marketers are closely watching is mobile marketing.
Starkman said recent estimates attribute as much as 12 per cent of Web sales in Japan to purchases made using a mobile device.
He said using cell phones to purchase products is growing in Asia and Europe but has yet to be fully exploited in the U.S. and Canada despite broadband developments in the region.