Being the first - or the fastest - in the world of ecommerce is not
the most important thing, according to Ogilvy Interactive Hong Kong
business director Jeff Markley, despite popular perception.
"It is far more important to understand the change occurring all around
us," he told delegates at the recent Reader's Digest SuperBrands seminar
in Hong Kong.
An understanding of the environment and type of change is necessary; the
goal of practitioners of ebusiness should be to master change, said Mr
Markley.
"Ebusiness is an agent of change, but are the fundamentals dramatically
changing? The answer is not necessarily - there are two types of change:
revolutionary and evolutionary," he said.
"Change is constant. Adaptation is a prerequisite to survival."
There are five ebusiness issues which need to be understood and
appreciated:
- Proliferation is the norm
This is, however, an old rule of business, said Mr Markley, and not
something which has sprung up because of the Internet.
"Supply will always expand to meet demand - for example, in Taiwan in
1987, there was only one imported beer, Carlsberg. Now, there are 197
imported beers," he said.
Nonetheless, there are revolutionary forces also at work on the
Internet, leading to increased clutter - the number of brand names
registered as trademarks has doubled since 1974, to more than nine
million today.
Categories are increasingly crowded, but fall-out is inevitable.
"In several years, many of the players of today are not going to be here
anymore," Mr Markley said.
"There is only room for one or two players."
Online advertising spend has boomed in just a few years and is forecast
to hit US$33 billion by 2004, with 33 per cent of this occurring
outside the US.
There are one billion Web pages clamouring for attention; in January
this year, dotcoms account for 17 out of 38 advertisers who paid up to
US$1.4 million for a 30-second spot during the Super Bowl
television broadcast.
However, the returns have been far less spectacular than the amounts of
money spent to obtain access to the Super Bowl audiences.
"Is there an inverse proportion of the amount of money spent on
traditional media to awareness of the brand?" Mr Markley asked.
"Brands will, however, survive and endure. Scale will crush the smaller
players."
- Distinction will be difficult to maintain
It is now harder to be unique - it used to take a competitor 12-18
months to copy a product or service; today, it happens in a matter of
weeks.
"Because of the way that the Internet levels the playing field, it has
become easier to compete with some of the bigger names," Mr Markley
said.
However, proliferation and parity between competing brands has resulted
in massive consumer indifference - therefore, it is vital for marketers
to constantly seek new ways to add value and distinction to their brands
and products.
- Partnerships will be vital
In both revolution and evolution, partnering ensures survival, providing
expertise and resources - in the best case scenario, it will allow the
partners to leapfrog the competition by bringing in new customers and
extra revenue.
"But you must determine which partners are most likely to survive and
give you a strategic advantage," Mr Markley said.
- Revolutionaries will force change
Ebusiness has introduced entirely new ways to buy, sell and distribute
products - but at the same time, consumers' lives have not changed as
dramatically: "Therefore, a brand must constantly fulfill on the
consumer promise. Things are changing; brands should adjust but the core
promise should remain the same."
New business models are evolving to meet new consumer demands, and
marketers need to determine which ebusinesses are truly leading the
revolution - and to partner with these arbiters of change.
- Traditional brands are also taking part in change
Marketing is undergoing a transformation, due to the interactive nature
of the Web: "The 'brand space' has been expanded; information has now
become part of the brand," Mr Markley said, pointing to the Campbell's
soup website, which offers not only information on products available,
but also features recipes, meal suggestions and nutritional
information.
But in the excitement of the brave new world of cyberspace, traditional
bricks-and-mortar entities should not be overlooked.
"They still have the opportunity to beat their online competition," he
said.
"The key is to understand your environment, your competition and your
customers. Although the way you act or react may change, the need for
branding remains."
