Web economy to double by 2016

A new study from Boston Consulting Group, commissioned by Google, estimates that the value of the web economy in the leading [G20] countries is set to double by 2016. The study predicts this growth, from £1.5 Trillion to £2.7 Trillion, will be driven largely by the increase in mobile phone users as the cost of smartphones continues to fall – cheaper versions now cost only $100. By 2016 it’s anticipated that 80% of all internet users will access the web using a mobile phone.

The study also estimates that by 2016 nearly 50% of the world’s population will be using the internet given that around 200 million people a year are going online for the very first time. The report outlines of the emergence of a “new internet” in which web access will not be seen as a luxury and that the majority of web users will live in emerging markets – by 2016 China is expected to be home to 800 million users which is more than the US, India, France, Germany and the UK combined although the research further underlined the UK’s position as one of the most advanced e-commerce economies.

The internet will continue its move towards social allowing customers and companies to engage with each other. The report also states that “this trend will be coupled with another huge technology shift that will fundamentally change the nature of how to run a business – the rise of the so-called “internet of things”, where all kinds of devices from sensors to cars to radiators will be connected to the web…technology giant IBM estimates that by 2015, one trillion devices will be internet-connected.”

The impact of the online world is also affecting the offline one as the research shows that every household also researches many purchases online before buying them in traditional stores. This aspect is difficult to quantify, according to David Dean,a managing director at BCG: “During the research we discovered very quickly that there is no approved way of measuring the internet economy…official statistics simply do not capture the sideways move of old technologies into the digital world, for example when a widget maker starts upgrading its devices so that they can be hooked up to the internet.”

The report concludes that businesses have to adapt to the digital economy by changing their people, processes and structures to meet its demands highlighting that entrepreneurs building a digital business are outperforming rivals who do not embrace the web economy and that referring to the “web economy” will soon sound as comical as speaking of an “electricity economy”.

“Understanding the economic potential of the web should be an urgent priority for leaders… with a powerful case for countries and companies to get online and reap the rewards of an age of data,” states Patrick Pichette, Google’s chief financial officer.

bd2012

The turn of a year always prompts some navel contemplation [‘where did that go?’], the inevitable resolutions to get fit and some crystal ball gazing. For bd2, 2011 was a great year with some exciting, ever bigger and ever more complex projects undertaken or underway for an ever growing client base. The combination of which led to business growth of 34% – which we’re quite chuffed with given all the general economic doom and gloom.

2012 promises to be equally exciting with some large scale web-projects in production  – we’re soon to launch our most ambitious integrated e-commerce site for longstanding client Ralawise and have begun to develop a major intranet based ‘vehicle’ for HP Enterprise Services.

We’re building our first mobile sites as our b2b clients look to harness the accessibility and capabilities of smartphone technologies following the b2c trend which has seen mobile and tablet use grow exponentially in 2011. This growth is set to continue as Tony Foggett, MD of Code Computer Love, commented recently: ‘If 2011 has been the year when mobile technologies emerged in earnest, 2012 will be the year when brands really start to take advantage of smartphone and tablet usage. Mobile offers an amazing marketing platform with which to innovate from.” Social media will also, undoubtedly, continue to grow in importance for b2b as it has for b2c with its unique offering of engagement and dialogue which is driving all brands to show a compassionate side aligned to a genuine corporate social responsibility strategy. With broadband speeds providing a near broadcast TV experience, the use of video will also continue to grow. But the key to success online, whatever the platform or media, is an integrated strategy – aligned with your offline marketing strategy – and quality content “As current digital platforms mature and more emerge, content will remain a key differentiator for e-commerce and brand building activities in 2012. The importance of clever creative thinking and technology remains – if not becomes more important.”

To meet this need, we’re opening a new 750sq ft photography studio at our premises to provide a resource for still photography such as product shots including all colourways, 3D rotates and zooms along with roomset, as well as video for corporate sites and e-commerce requirements such as catwalks for clothing and apparel. Having the studio on site will allow us to provide a very cost effective service and a very rapid response as we’ll be able to shoot, re-touch, colour balance and add product images to sites in a couple of hours.

March will see the launch of our ‘Creative Wigan’ online directory which we’ve developed and donated to the local creative sector to enable prospective clients from both public and private sectors to source services from creative, digital or ICT businesses on their doorstep. The launch event is penciled in for Friday 2nd March with MP Andy Burnham now confirmed it’s hoped he will be joined by other local MPs, leading public sector figures and captains of industry to help raise the profile of the local talent within the sector and, if the anticipated 100+ do turn up, it might get some media coverage too!

Brand Values

The contribution any brand makes – whether it’s business or consumer focused – in society and culture, is undoubtedly playing an increasingly important role in the decision, or otherwise, of customers and prospects to engage with it. This challenge often goes beyond the remit of the marketing department and can even lead to a complete rethink of the relationship between a brand and its target audience.

In his new book ‘Screw Business As Usual, And Make Your [Huge Piles Of] Money By Doing Good’, that well known, lime-light-loving, bearded billionaire, Richard Branson, contends that as long as entrepreneurs can make profits, or even indeed ‘huge piles of money’, while helping others, why would you do business any other way? He argues that a business with a social conscience will save resources, drive higher profits, be more satisfying than even the material wealth it creates and attract and retain employees who – motivated by their love of the company’s social mission – will work harder.

“Fuel is nearly 30% of our costs,” says Branson of his Virgin Airlines business, noting that waste is enormously expensive and reducing resources is both good for the environment and for keeping down costs. He seems to be ‘walking the talk’ by claiming that the airline will be using 100% clean-burning fuels by 2020. “The airline industry could become one of the cleanest industries, rather than one of the dirtiest industries in the world.” Branson also suggests that “…most successful people in life do not start with the money-motive whatsoever.” Whilst you could argue ‘that’s easy for him to say’ having made his billions, he points to new businesses such as Google which started out to “make a difference in people’s lives” and their financial success is a happy by-product.

Branson’s sentiments echo those in the “Creating Shared Value” paper, published in the Harvard Business Reviewby Professor Michael E. Porter, which proposes a redefinition of capitalism in order to create a value model where benefits are both financial and to society as a whole.

In order for brands to come to terms with this shift, they need to understand the changing drivers of the decision makers within their target audience, and with it, rethink the role their brand plays in society; To think about what the brand really stands for across all touchpoints; And to make sure the brand strategy delivers real and genuine tangible benefits which demonstrate a commitment for mutual benefit – whether that’s also helping the environment, donating a portion of profits, or supporting a causes.

A collaborative approach also allows brands to engage with, and enable, their staff, customers and network to produce new platforms that benefit the shared ideals of the business and society. People are usually more supportive of ideas and change that they have contributed towards themselves. By leveraging new technologies, companies are able to engender brand buy-in not only from their clients, but equally as importantly, from their staff as well.Collaborative initiatives, now readily enabled by new social media channels, focus on driving engagement by gaining support and adoption by the most motivated and influential users and providing them with a platform to develop their own ideas by enlisting the broader support of their own social groups.

“The Converged Lifestyle” report from KPMG, released today, highlights how far UK shopping habits have been transformed by technology and point to the fact that not only has e-commerce become widely adopted, it’s now the preferred method of shopping for many. In the survey, 77% of British shoppers said that they prefer to buy goods like CDs, DVDs, books and video games online which compares to 65% globally.

Whilst consumers around the world are quickly adopting new technologies, the report found that UK consumers and businesses are more advanced when it comes to adopting new technologies as online shopping and the use of social media are more widespread in the UK than in other parts of the world. This is borne out by the report’s findings which show that 88% of respondents in the UK reported downloading an app to their mobile, 74% of consumers said they were more likely to buy flights and holidays online and 60% used some form of online grocery shopping. By contrast, in the US, whilst around the same amount would book flights, only 21% said they were more likely to buy groceries online.

KPMG’s European Head of Technology comments: “The survey reveals that consumers around the globe adopt new technologies at a rapid pace and at the same time are increasingly willing to accept their data to be tracked if they get something in return. This represents a huge opportunity for all players in the digital ecosystem – retailers, advertisers, telecom operators and the financial industry. From buying goods on their mobile phones to keeping up with friends on social networks, consumers are increasingly reliant on a range of technologies that perform important – yet often overlapping – tasks. This new ‘converged lifestyle’ will have huge implications for retailers. The integration of various channels will become increasingly important as retailers begin to see many of their consumers move to online and application-based purchases. As the ubiquitous smartphones empowers the consumer retailers will need to understand the opportunities and risks that mobile devices present.”

The survey also reveals the extent to which smartphones and tablets are changing shopping behaviour, as highlighted in our blog of 18th November. 45% of UK respondents said they now use their mobile devices to locate the nearest store, 32% to research products and services, 30% for online coupons and 20% scan in barcodes to for product information. However, the report also shows that consumers’ concerns over privacy and data security have increased over the last few years and the majority of respondents said they still prefer to purchase luxury goods in store.

The report summarises that ‘we have more choice in devices than ever before and that this choice increasingly serves one purpose: to enable consumers to get what they want, when they want it and where they want it’.

buzz builds brands

The media landscape continues to evolve and the way we view media is changing just as quickly. Internet-based TV is coming of age through the growing number of smart TVs and mobile streaming, which adds to other new channels including social media which continue to grow exponentially. And the divergence of media across these many and increasing channels – online, mobile, social, viral, web – demands ever more radical thinking and fresh ideas to create or maintain visibility of a brand within the broader cultural mix, ideas which are cost effective, successful and measurable.

For consumer brands, that have historically relied heavily on TV advertising, this places an increased urgency on finding ways to maintain visibility in culture – ways that can be measured, are efficient, and reach big audiences. Some of these ideas are relevant to brands with smaller marketing budgets and in business to business marketing, as the principles are just as applicable. The focus is on creating a viral ‘buzz’ to generate interest and high cultural capital to gain high rates of media impressions.

The power of some of these channels is evident not just in marketing brands, but in causes – the Arab Spring and Occupy Wall Street movements have used them to gain literally world changing impact. Whilst the scale and driver for these issues is altogether more significant than mere marketing, there is no doubt they reflect a mood for change leading more and more organisations to become genuinely involved with corporate social reasonability issues. That’s not just publishing a bland statement on a website page, but to actively support relevant agendas be they ecological, charitable or even political. Examples include companies with a strong CSR focus at their very core such as Innocent Smoothies and The Cooperative or initiatives such Nikes’ recent auction of its ‘Back for the future’ mags on eBay raising $11.3 Million for the Michael J Fox Foundation.

Aligning a brand with a cause can create direct business benefits as building a reputation as a responsible organisation helps to differentiate a business in a competitive environment, and dealing with suppliers who take a responsible approach, is now often part of engagement criteria. Organisations naturally favour suppliers who demonstrate responsible policies, as this can have a positive impact on how they are perceived by their own customers. Increasingly they are not just preferring to deal with responsible companies, but insisting on it. There is a strong argument for brands to present themselves as socially responsible [and environmentally aware] and it’s critical that they accountable and transparent.

Sometimes, if the context of a situation is interrupted by the unexpected it can challenge our perceptions or at least attract our attention as we naturally try and understand what’s going on. Anytime an environment, be it urban, personal, retail or otherwise is affected from what we expect it to be, it can dramatically interrupt our sense of context, gaining our attention and generating that elusive ‘buzz’. Ideas that force an opinion, or divide opinions, and create debate will nearly always create a fair share of ‘buzz’. Often the conversational ‘buzz’ is a reaction of strong opinions and expressing the sentiment of the topic – be it humour, anger, sympathy, or any other potent emotion. These topics become imitated and often morphed to increase the entertainment value of the reaction, which we’ve seen recently in the press and on social media sites – from “Winning” with Charlie Sheen, to planking and tebowing. Ideas that can spark interest and prompt others to mimic and interpret an idea in their own way are growing, driven by the ease of sharing content through social media.

Marketing concepts that use supposedly leaked or risky ideas can allow brands to gain impact covertly, even if it’s only for a short while. Ideas that feel like they’re pushing the boundaries of acceptability or are apparently secret or even that might be mistakes, often spread quickly. Threshers, for example, leaked a voucher worth 40% off booze via the internet which was supposedly only intended for retail partners. The myth that Threshers had mistakenly released the voucher made the word spread faster and faster round the country via email, social networks and blogs. Threshers told the media that they were worried about losing money on the promotion but no doubt ended up making a huge profit and getting more publicity in a month than they got for the previous year. And a recent Diet Pepsi campaign used a video of David Beckham taking seemingly impossible place kicks into a rubbish bin. The clip, posted to YouTube, generated a frenzy of media interest and social media discussion over the incredible shots – were they real or computer generated.

Whilst an A-list celebrity like Beckham generally guarantees coverage, they’re beyond the reach of most businesses. However it’s possible to create that much sought after ‘buzz’ by finding innovative ways to generate new stories, which can translate buzz into real momentum and performance for the brand. ‘Buzz’ builds the awareness and recognition of brands, if it’s original and well-managed it can achieve bigger impact thought using these new media channels – way beyond the equivalent advertising spend.

iPad and tablet conversion rates are double that of desktops, and almost twice as high as other mobile devices, according to stats that show the value of tablet users for online retailers. According to stats from Affiliate Window’s M-commerce white paper  http://blog.affiliatewindow.com/wp-content/uploads/2011/11/M-Commerce-The-Complete-Picture2.pdf the average conversion rate for iPad was 3.82% in August, compared to 1.9% for desktop (i.e. non-mobile). The stats cover 81.9m visits to merchants and 1.57m sales, not including In-App purchases except in cases where the customer is taken out of the app to complete the transaction.

Stats from eBay, quoted in M-commerce’s Innovation Briefing http://econsultancy.com/uk/reports/m-commerce-innovation-briefing, echo this trend, with the company stating that tablet users spend 50% more than PC users. Conversion rates are also higher for iPads compared to the tablets, not only are average order values higher [AOV of £69.94, compared to £65 for desktops], but the iPad is converting better than desktop, as well as all other mobile devices. And by some distance too. The average iPad conversion rate for August was 3.82%, with the next best 2.58% for Android. Non-mobile was way behind on 1.9%.

These stats then, would suggest that b2c online retailers should ensure their website is optimised for tablets to take full advantage of the growing number of consumers using them – ipad sales grew 183% in the quarter to June this year. It doesn’t take too great a leap in imagination to see that this consumer trend could follow suit in the b2b arena. The portability of the tablet combined with it’s intuitive and more practical usability than mobiles, added to the ability to go online, either via wifi or 3G, makes it the most convenient way for non-desk based users to reference and potentially order products whilst out of the office.

Does Adobe’s announcement that it’s to ditch development of its Flash Player for mobile devices signal the end of Flash altogether?

The Flash plug-in enables movies, animation and games online and, when used well, can deliver enormously effective, dynamic and engaging web-based content. However, it’s always had its critics; initially because not all browsers had the plug-in and downloading it was always a hassle; then accessing the files could be very slow and it’s often used in inappropriate and even obstructive ways – remember all those sites with pointless and annoying animated intro sequences? There are still one or two around.

The death knell probably first sounded for Flash in April 2010 when Apple, or more specifically the late, great Steve Jobs, refused to support the technology under the pretext of security, reliability and battery life issues although it probably had more to do with Flash’s ability to play video and their Quicktime product.

Adobe’s reaction was to try and tough it out as Flash had become the dominant media player online. However, as the use of smart mobiles to access the internet has grown, those that use Flash found it cumbersome and a drain on battery life, plus there were those that couldn’t use it at all, namely the huge number of Apple iphones and ipads.

“Steve Jobs helped shift the whole industry to HTML 5, and 40 million iPads later it turned out that Flash wasn’t a selling point as many supposed.” said Colin Gillis, senior tech analyst at BGC Partners.

Then, on the 16th September this year, the final nail was probably hammered into Flash’s coffin when the other great operating system developers Microsoft, announced that they wouldn’t support Flash in the new web browser that works with their Metro interface on Windows 8 which is mostly likely to be used on tablets. Instead it had concentrated on the latest version of web technology HTML 5. Like Apple then.

Chris Green, technology analyst at Davies Murphy Group Europe, concludes “since so much of our internet use is now on mobile devices, it does questions the long-term viability of Flash full stop.”

Is mobile a must?

According to the latest Ofcom figures, a quarter of adults in the UK now have a smart phone and it’s reasonably logical to assume that the figure is higher amongst business users. The numbers are rising at nearly 10% a year and will no doubt increase more rapidly as cheaper devices become available. Mobiles have been part of our day to day lives for many years and, with smart phones especially, have become a vital business tool as they provide access to most of what we now need to work – phones, emails, messages, internet access, contacts and an almost overwhelming array of useful business applications.

The attraction of access to everything everywhere is immense, particularly as individuals and as consumers. Some of the most innovative social media channels and switched on brands exploit the technology brilliantly, such as Groupon which offers vouchers and discounts within retail and food outlets, based on a user’s location. And brands are increasingly using QR codes to drive the reader of an advert or promotional piece to scan it and instantly open the website, rather than try and remember the URL or Facebook page for when you get to a PC.

Businesses are also tapping into these innovations to raise profiles and awareness. But it’s all too easy to get swept along with sexy new technology. Sometimes a quick sanity check is needed to question it’s real value to business – ‘would I look at a website on my mobile if I’m sat at a desk looking at a nice big PC or even laptop screen?’ Probably not, but perhaps I would scan a QR code whilst visiting a trade event or exhibition, or one on a business card at a networking event. But if I did, I’d expect a mobile friendly site, rather than a standard corporate one which would need expanding and reducing to navigate or read.

There’s no doubt that the 25% of UK adults statistic alone, makes mobile a consideration for inclusion within your overall ‘e-strategy’ even for classic b2b businesses. It’s important not to think about mobile in isolation, as a recent article in The Chartered Institute of Marketing’s magazine, ‘The Marketer’ observes “it’s not a separate channel; it’s what people use when they visit other channels. The difference between the internet and mobile will soon be invisible.”

If you’d like to discuss your business’s e-strategy and what role mobile could play in it, please contact will@bd2.co.uk.

Wigan Expo 2011

Last Friday saw the second Wigan Business Expo, and [whilst the word 'Expo' still suggests to me something that sounds like the kind of thing they hold in Brussels, Rome, Tokyo or Montreal] the event is growing into its title and also in terms of exhibitors, attendees and length. Having relocated from one stadia to another – from DW Sports to Leigh Sports Village – the new venue accommodated more exhibitors and a full day’s programme of speakers in two presentation rooms. Although actually getting to the venue wasn’t that easy though with some ill-timed roadworks causing tailbacks onto the ever-expanding Leigh Sports Village site, shortly to be added to by a large Morrisons. Unfortunately both the event and the roadworks were organised by the Council, I guess it’s a case of the left and right hand?

Despite this glitch, hats must go off to the Council for supporting local businesses and encouraging inward investment in the Borough across both public and private sectors. As last year, the event had a very positive buzz, with exhibitors and attendees networking in the various rooms and corridors of the stadium. The presentations were inevitably mixed, given that there must have been a dozen in each room through the day, both in terms of quality and attendance but there were some worthwhile ones amongst them. I’d like to think that my efforts to explain the importance of developing an ‘e-strategy’ within your business, to compliment traditional marketing and business plans, were well received and I seemed to have a reasonable audience. There was no heckling or throwing of objects at least, which is always a positive.

Given that this year’s event was bigger and better than last year, I’d hope that the Council will continue to support it, even in what are clearly difficult times for Local Authorities and their budgets. There does at least seem be a growing recognition of the importance of local business to the survival and growth of the local economy.

Thanks must go to Claire Walsh and Keith Molloy at the Council for the hard work they’ve clearly put into making the event happen.

I suppose it’s another indicator of his extraordinary impact over the last 20 odd years, that the life of Steve Jobs – much reminisced by presidents and prime ministers; the subject of reams of column inches and hours of media comment; no doubt greatly missed by family and friends; and much lamented by colleagues and customers alike – should spark a debate in the pub last night which overtook the customary dissection of another one of England’s tortuous performances.

Was he a genius, a visionary, uber geek or a brilliant business man?

Like most graphic designers, I suppose I feel I have a personal relationship with Apple having bought my first Apple over twenty years ago. I was still at Uni and ploughed every penny I’d earned from freelance work into the purchase of a Mac LC – the pizza box one. I made quite a few instant friends as, back then, I think the Uni only had 2 Macs so just getting to use one involved hours of queuing only to feel like an isolated wildebeast being watched by a tree full of salivating vultures.

Since that LC I think I’ve bought pretty much every type of Apple product for business or leisure: Powermacs, G3s, G4s, G5s, PowerBooks, Mac books, Mac book Pros, Mac Pros, Cinema displays, all versions of the iMacs, iPods of most generations, all the iPhones and I’m (almost inevitably) typing this on an iPad. I’m obviously biased here but few products bring such joy or garner such loyalty. This may sound slightly sad, but I’m relieved to be not alone: how many other brands engender such emotions? How many other consumer products drive punters to sleep outside the stores just so they can be first to get their hands on one? Or indeed, how many Company Chairman or industrialists would receive the same kind of emotional and respectful out-pouring that has greeted Jobs’s passing?

Despite being Apple’s co-founder, and his name being synonymous with the company, Jobs wasn’t actually at the helm when I bought that LC as he’d been forced out. Leaving aside for a moment the question of genius or visionary, he was undoubtedly an incredibly talented businessman. I find it amazing that when ousted from Apple he then bought Pixar for effectively $5 Million which also turned out to be a fairly successful venture with films such as Toy Story, Finding Nemo, Monsters Inc and more. It was sold for a staggering $7.4 Billion  to Disney, which was taken in stock, making Jobs Disney’s largest shareholder. His other business, the high-end computer developer, ‘neXT’ was deemed by some as a failure, but was bought by Apple for a paltry (?) $429 Million in 1996 bringing him back into the Company, along with a raft of technologies Apple then adopted.

Apple was really struggling when Jobs returned, having found itself on the fringes of the computing world and under real risk of disappearing alogether, but Jobs, in conjunction with now legendary product designer Jonathan Ives, launched a new integrated PC the iMac which began to turn the business’s fortunes around. Then, new innovative products such as the iPod, iPhone and iPad have ultimately turned it into the world’s most valuable technology business. In point of fact the second most valuable business in the world after Exxon Mobil. There’s an endless array of numbers that signify this success, but the one I find most amazing is their cash pile, a staggering $75 Billion – that’s more than the US Government’s operating balance.

There’s been so much comment since Jobs died, so many words and articles written that it’d be impossible to read them all, but of the ones I have read, I think Cliff Kuang seems to get to the root of the answer of what was Jobs was [although I've just watched an interview with Apple's co-founder Wozniak who said 'marketing was his greatest strength']:

“Jobs was ahead of his time: he saw usability as way more important than speed and tech specs. Jobs may not be the greatest technologist or engineer of his generation. But he is perhaps the greatest user of technology to ever live, . Those computers that Ive and Jobs worked on became, of course, the iMac – a piece of hardware designed with an unprecedented user focus, all the way to the handle on top. That single moment in the basement with Ive says a great deal about what made Jobs the most influential innovator of our time. It shows an ability to see a company from the outside, rather than inside as a line manager. He didn’t see the proto iMac as a liability or a curiosity. He saw something that was simply better than what had preceded it, and he was willing to bet on that instinct. That required an ability to think first and foremost as someone who lives with technology rather than produces it… People often say that Jobs is a great explainer of technology – a charismatic, plainspoken salesman who is able to bend those around him into a “reality distortion field.” But his plainspokenness had force because he always talked about how wondrous it would be to use something, to actually live with it and hold it in your hands. If you listen to Jobs’s presentations over the years, he comes across not as the creator of a product so much as its very first fan – the first person to digest its possibilities. He blossomed into a user-experience savant. A reporter who asked Jobs about the market research that went into the iPad was famously told, “None. It’s not the consumers’ job to know what they want.” It’s not that Jobs doesn’t think like a consumer – he just thinks like one standing in the near future, not in the recent past. He is a focus group of one, the ideal Apple customer, two years out. As he told Inc. magazine in 1989, “You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new.”

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