Category: the web


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.

“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’.

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.

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This isn’t the first time I’ve mentioned the mind-blowing valuations attached to online businesses which highlight the ever growing significance of all things web. Although these numbers also raise the question of whether we might be living in another dotcom bubble. It was only in May that the business social media site Linkedin listed at $45 dollars a share. On Monday they topped $100, valuing the business at over 8 Billiion Dollars. And online gaming business Zynga, whose main success is ‘Farmville’, is set to follow suit with a flotation that is expected to value it at a staggering 20 Billion Dollars [despite business revenues of less than 600 Million in 2010]. All these numbers should be read out loud in the style of  Dr Evil from the Austen Powers films.

Notwithstanding the bubble question, the numbers only serve to further underline the ever increasing impact of the internet in all aspects of all our lives, from buying online to sharing with friends. The digital shift is also changing advertising, with a move away from the traditional print media of newspapers and magazines to online. This trend is global and it’s expected that we’ll see online advertising spend exceed newspapers and magazine advertising for the first time in 2012 – this year marketers will spend $4 Billion more on newsprint but next year it will be reversed to $2.9 Billion more online. This change is being driven by increasingly sophisticated and efficient targeting tools. Have you ever noticed that if you look at a product within an e-commerce site, then go to say an information site such as a newspaper, that the ads are for the same product? Then there’s some less subtle drivers – Zynga gives bonuses to their players who click onto the ads in their sites, which puts pressure on all players to do the same. “These types of integrations will get smarter eventually and you will start seeing real world coupons, discounts and deals being based on virtual achievements in the games.” [Julius Harper, social networking consultant]. Zynga proves the trend of advertisers moving away from traditional print media to online as they’re reporting significant increases in the advertising revenues within their sites, up over 400% year on year.

It’s also anticipated that video ads will play a growing role in supporting brand awareness for products that aren’t even sold online, such as cars. Videos provide familiarity and comfort as they feel similar to TV ads, there are no longer download issues or delays with faster broadband and they are easily shared through sites like Youtube and Vimeo.  Which, in turn, links into the social media phenomenon as large sites like Facebook carry ads, often from local companies, benefiting from specific geographic and demographic targeting. Concepts such as Groupon have taken this principle into the mobile arena with offers and ads based on location and individual preference.

If the UK’s internet economy were a separate sector, it would be its 5th largest at 7.2% of GDP. That’s bigger than construction, education or transport and only 2% smaller than financial services [Boston Consulting Group Report 'The connected Kingdom' October 2010]. A fact not lost on the Government who seem keen to further encourage the dotcom generation with business breaks like capital gains tax and venture capital trusts incentives as they attempt to drive Britain forwards as the leading tech economy in Europe. At an event for 100 internet entrepreneurs in Downing Street on June 1st, David Cameron stressed that Britain is relying on the dotcom generation to generate employment not just to preserve it. And e-commerce luminaries, such as Natalie Massenet of Net-a-Porter fame, believe that Europe is addressing the gap between it and the US with Britain at the helm – although it’s safe to say that the big players like Google, Facebook, Linkedin, and Groupon are all Silicon Valley based. “There is a need and an opportunity for Europe to narrow the gap with Silicon Valley, where there is a huge start-up community,” said Niklas Zennstrom who co-founded Skype one of Europe’s big internet successes. He sold Skype in 2005 for $2.6 Billion but it has just been bought by Microsoft for $8.5 Billion demonstrating, yet again, the phenomenal growth in values of e-businesses. Similarly Linkedin, the business social media vehicle, went public on the 19th May at $45 a share which rose to over $90 a share by the end of the first day, valuing the business at over $9 Billion. Such mind-blowing numbers further fuel fears of a second internet crash, but whether it’s dotcoms or bubbles, the future’s definitely round.

Double Bubble?

Having lived through the ‘Dotcom’ bubble of 2000 and survived, just, it’s fascinating to witness the current deals and valuations, albeit with a creeping sense of deja vu. Back in the late 90s, any business with a dotcom suffix seemed able to apply virtually any ratios to its valuation regardless of silly old fashioned measures, such as ‘profit and loss’ or ‘turnover’. These valuations were fed by the gold rush mentality of institutional and private investors desperate not to miss out on all the potential of e-commerce and the internet. By way of illustration, French mediahouse Canalplus was in negotiations to buy Sportal.com, a sporting infotainment site, in May 2001 eventually offering some £275 Million which was rejected by the owners who attached an even higher value. As we all know, the dotcom bubble burst in dramatic fashion and, by way of further illustration and harsh lesson learnt, Sportal was sold in November that same year for just £1.

In retrospect, both pre and post dotcom bubble burst scenarios were extreme – with over the top valuations and an equally over the top reaction leading to the crash – which is evident in the rapid return to normality. However, some recent activity stretches anyone’s definition of normality, at the moment Google and Facebook are fighting with each other to buy loss making Twitter which will turnover something in the region of $150 Million this year, and the price? We’re up to $10 Billion. Online games firm Zynga, whose games include Cityville and Farmville in which groups of players build virtual farms or cities and buy virtual assets, has just raised investment that values it at $10 Billion. And the all conquering Facebook’s shares are trading at a level that value it at a mind blowing $50 Billion. Even in the UK, supermarket chain Morrisons has just acquired online retailer Kiddicare, which made a profit of less than £3 Million last year, for £70 Million primarily for its technology and knowledge platform.

Since 2000 the spread of broadband and ever increasing adoption of the internet across all aspects of our business and personal lives – social and consumer – has changed the landscape and made investing much less speculative. Then again, global markets are far less buoyant now which has to be factored in. From our perspective, we’re designing, developing and promoting websites for predominantly bricks and mortar businesses who are seeing real and rapid returns on their investments in web. This is being achieved either by reduced costs of sale, added efficiencies in order process or provision of data, increased market reach or a combination of all three. Whether or not there will be another rationalisation – especially of dotcom enterprises – is anyone’s guess, but these tangible benefits will inevitably keep driving up the value of online businesses.

By it’s very nature, the online world is a fast moving one. New technologies and techniques are constantly emerging and then evolving. Some of these are shaped by users into dominant forces while others fade away or are usurped by the next big thing. Understanding the relevance of these developments to your business places a huge emphasis on devising an overall strategy, underpinned by research, to consider the appropriateness of each area to your business activities, market and objectives.

Organisations that publish a website and put a big tick in the ‘done’ box on their to-do list, will quickly see its relevance and value diluted. It may even be that a single website isn’t appropriate for your business; corporate information doesn’t always sit comfortably alongside products and may confuse users who just want to place orders. Similarly, e-commerce isn’t applicable to every business but it does offer enormous opportunities and efficiencies to those businesses that can offer products or services online. Or it may be that just the provision of information saves valuable man hours by linking a website to your internal systems giving secure access to, for example, customer accounts or stock. Dependent upon the type of organisation and sector – and it’s all very much a question of relevance – brand or market sector microsites might be appropriate to deliver specific information to specific audiences, or to provide general information and become the voice of your industry online. Manufacturers and distributors can provide data feeds to their resellers controlling data integrity and strengthening relationships.

Websites need to be search engine friendly, otherwise it’s a bit like getting a phone line and not giving out the number; you want to make it easy to find. There are various techniques to achieve high ranking but success is affected by how competitive your sector is, which needs to be ascertained through research, before developing a strategy and action plan. It shouldn’t be forgotten that optimisation is an ongoing activity that requires constant attention to ensure that ranking is maintained or improved as Google specifically, is constantly refining its algorithms so affecting how well a site ranks. Relying on search alone though can be very dangerous as dips in performance or aggressive tactics by competitors can affect traffic and consequently sales. The instant and direct nature of email, which has become a fixture of daily business communication, can also help drive traffic to a site. A well designed and properly distributed email campaign is a very cost-effective way to inform prospects or customers and bring visitors via click-throughs. Emails can be tracked with comprehensive reports on numbers  sent, opened and ‘bouncebacks’. In a business to business scenario, given a good quality database, we’re typically seeing around 20% of emails opened, compared to around a 2% average response in conventional direct mail.

The exponential growth of social media, which has seen Facebook overtake Google as the world’s most visited site, increasingly presents opportunities for business and, if managed as part of an ongoing strategy, can be very beneficial. There is a natural concern amongst businesses, of being too open or of losing control. However, whilst social media does fit more naturally for certain types of business than others, that doesn’t mean any business shouldn’t have a presence, it may just take more time to find its place in your overall marketing communications. Various social media platforms, including blogs, LinkedIn, Facebook and Twitter, can be used to listen to what people are talking about in your industry, then to engage with them and establish relationships. In turn, social media can help build brand reputation, consumer trust and generate referrals through direct dialogue with the audience. Social media platforms can enable businesses to be proactive in their response and establish themselves as a genuine voice. Any social media activities should align with the overall business and marketing strategy working to a clear set of measurable goals and be undertaken with a level of discipline.

Viral campaigns often raise similar concerns regarding relevance, especially in the b2b scenario, but the issue of appropriateness is again key. It should be borne in mind that successful viral campaigns can see the biggest return on investment – if videos, games, competitions or opt-in schemes are popular they spread like, well like a virus, because the promotion is mostly carried out by users. The online game we developed for retailer American Golf some years ago ultimately gained over 90,000 registered players, all golf enthusiasts, all potential customers, through a simple ‘challenge a friend’ prompt when finishing the game.

The evolution of mobile technologies such as smartphones, netbooks and ipads, coupled with 3G connectivity and the spread of WIFI brings internet access virtually everywhere. Your customers now want, and expect, to be able to access information on these devices creating a need to provide correctly formatted websites or even deliver functionality through apps.

One of the key benefits of e-marketing, in contrast to many conventional channels, is the ability to accurately measure performance. The analysis of this almost limitless and detailed data – numbers of visitors, locations, time spent on site, pages visited, exit points, click-throughs and ultimately orders and enquiries – should feed back into the ongoing process. The emphasis has to be on devising and refining an effective and coordinated ‘e-strategy’ that’s fully aligned with your business objectives, overall marketing strategies and brand. Most importantly, it has to consider, and research as required, each potential activity in relation to the specific target audience and ensure that it is always appropriate.

ready, steady…

Our new rapid order entry site for longstanding client Ralawise, branded by ourselves as ‘RalawiseGO’, looks set to change the online experience for their business customers and possibly the industry’s approach to e-commerce. Ralawise are one of the biggest distribution companies of promotional clothing & leisurewear in Europe supplying business customers predominantly in the garment decoration industry – screenprinters and embroiderers. Speed of order is critical to these customers but with a huge range of over 2000 products from 68 brands and over 48,000 SKUs, navigating through them efficiently to firstly find, and then to order selections, places enormous emphasis on effective design. The rapid shop interface delivers the entire catalogue on one page enabling users to select from main categories, such as ‘tee shirts’; which then brings up a list of sub-categories, such as ‘crew neck’ or ‘fitted’; once selected, a simple list of the products is provided which can be filtered by brand; then, on clicking a product, all its specifications are displayed along with an image. This single page with columns approach allows users to ‘jump around’ from any category, sub-category or product without the many typically frustrating ‘back’ clicks. Once the logged-in user has found the product they want, they click ‘select’ to bring up a matrix of all colours and sizes available, along with prices, in a modal window. This further speeds the ordering process as the user can place any number of size and colour combinations in one go. On submission, the order disappears into the shopping basket leaving the user with the main interface. Users can choose to change the column structure to navigate by brand rather than product type as they prefer or, if they know the actual prodcut code, there is a quick search which incorporates predictive field-fill taking them straight to the relevant product matrix.

The site revolutionises the often cumbersome catalogue approach with it’s many layers and clicks back and forth which can be frustrating for the typical b2b customer who knows what they want and hasn’t got time to browse. The site has been developed as part of a phased approach to completely redeveloping Ralawise’s online presence. It has been designed and built entirely inhouse by bd2 andintegrates with Ralawise’s Sage ERP solution for seamless e-commerce. The site has been developed in less than 3 months including extensive testing and has now been soft-launched to selected Ralawise customers prior to an imminent full launch.

bd2 has designed and developed a new website for Wigan Council’s ‘Way to Work’ initiative. The site is designed to make it easier for local people and businesses to access work, training, education or volunteering opportunities, and business support. These services are delivered by a number of different agencies, schemes and providers across the Borough and the site aims to bring all this information together in one place and make it easier to access. To help users find their way through the wealth of information available, we have developed a ‘pathway’ device that leads people to relevant advice and information through a quick series of simple questions that relate to their circumstance or query. Behind this sits a large directory housing information from all the service providers and their contact details and on support such as grants or training which can also be accessed directly. Users can register to the site to store information and retrieve it at a later date.

The site incorporates a full content management system which allows the Council to update the directory and other sections such as news and events. Additionally we have developed an extranet which is accessed by the Council and its partners to share information and files remotely, helping with internal communications and collaboration which has often proven difficult with so many agencies in different locations. The extranet incorporates an internal diary, internal contacts database and internal news and events. Further phases are planned to enhance the site’s functionality and content.

www.way-to-work.co.uk

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