FOCUS - READER'S DIGEST SUPERBRANDS SEMINAR: Understanding far more important than speed on the 'Net

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