Tag Archives: e-business

Yahoo’s Mixed Finances

Right, so Yahoo beat the analyst expectations (GOOD!), but still posted a fourth quarter loss of some £212m (BAD!).

That’s a lot of money to lose, especially considering Google contiues to lead the pack – Last week they also defied analyst predictions, but still made a profits of £266m. Impressive amounts, but rather worringly for them, it’s a drop of 68% year-on-year.

Returning to Yahoo though, it’s even more depressing. Profits fell by 34% compared to the same period last year. Although they’ve got a new CEO at the helm, (Carol Bartz), who I’m sure actually do a great job in turning the company around, I’m not entirely convinced that her $19m YEARLY salary is going to help improve the revenue streams of the business.

Pizza Topping…

Ok, so last year saw the domain name “Pizza.com” sell for $2.6m – and it seems that the cheesy-topped meal is worth even more dough online…

Dominos Pizza is literally raking it in, as the recession continues and UK consumers stay at home. According to the pizza chain’s latest full year results, while in-shop sales have grown 10% year-on-year, its web sales have jumped by 74%.

During the whole of 2008, Domino’s generated £58m in online sales – a massive increase on 2007’s figure of £32.2m.

The year was also a record breaking one for the takeaway kings – they reported a number of weekends breaking the £1m barrier for web sales. Seems that they really are topping the online takeaway stakes.

Apocalyptical Confusion

Ok, there seems to have been some confusion over my opinion that the digital industry will flourish as the economy takes a down-turn.

My original comments related to online marketing.

Alongside my otimistic agency views, I’m also of the opinion that other internet-functioning businesses could be hit pretty hard. Examples:

E-Bay issued a stark warning that profits could be down this christmas – this last quarter saw revenue rise by 12% ($2.12bn) which was lower than analyst predictions. A quick recalculation later and the number-monkeys expect total 2008 revenue to be between $8.53 – $8.68bn (still more money than most people will ever see). 

To be more competitive, Amazon has slashed it’s free delivery qualification costs from £15 to £5. This means that over 90% of their products will be delivered for free. I personally think this is just common sense – leading industry experts have long-advised companies to play around more with free delivery.

Google’s market-share has dipped a teeny-tiny bit. My cynical side says that this explains why they’ve suddenly backtracked on their long-standing policy not to allow gambling advertisements. Now, potentially generating £millions more with this hypocritical move, as we have already seen a quarterly increase on profit this year. I’m sure we’ll see Google beginning to strangle the competition again.

Social networks are struggling to generate viable income. Which is no big secret. Sadly though, this is directly affecting people working in the industry, as they become statistics in the economic downturn. The most recent victim is Hi5, the third largest global network, where it was announced this week that around 10-15% of the workforce would be laid off. Other companies being affected include start-ups and software; again, the most recent casualty being Jive.

When the whole world is suffering economic crisis, it’s obviously going to affect the world-wide-web. But to reiterate my original point; some parts of the digital industry will do well from the misfortune of others. Yes, it will get increasingly competitive, but with decent strategy and user-confidence, those who succeed will be very apparent. Whilst we’re seeing companies collapse every day, I hardly think this is the end of the internet.

Economic Highs, Not Lows

The wonderful thing about the digital world is that everything can be recorded. Inevitably, the usual privacy/infringement issues arise, but for marketing-men (and women) , this is brilliant. By recording user information, patterns, online data etc. almost instantly, advertisers can see if a campaign is working or not. Following the entire process from start to finish in such detail, they can indentify where users become disinterested or excited, they can tell how users react to specific offers, products, services and websites, they can collect and assess and conclude data like you wouldn’t believe.

Actually, that’s the theory. I’ve seen quite a lot of poorly-run campaigns over time (I’m not the only one); doesn’t matter what they are: PPC, Affiliate, SEO, Display… You could have the best campaign idea ever, but if the strategy isn’t right, I can assure you that it won’t achieve it’s full potential. Digital is about quick response – in this sense, it’s direct marketing at it’s finest: Ads targeted at relevent users, responses that can be traced and assessed, strategies that can be tweaked and fine-tuned for maximum effect. Because of this, it’s a total no-brainer that whilst the economy is down, digital is on the up.

From a marketing perspective, digital is inexpensive, trackable, changeable and direct. Far cheaper than TV, Radio, Press or Outdoor, in the current economic climate, it will practically guarantee money well-spent and yeild a return on investment. (Providing any campaign is well-run). It even enables SME’s to successfully compete with bigger players (all the more important right now). From a user’s perspective, the internet can provide more services, information and products than they would find offline – usually at cheap, comparable prices.

It’s a win-win situation for everyone and, with the slump we’re seeing offline, where people are opting to try and save money, it’s no suprise that the digital world has grown enormously these past few months. I’m seeing it everyday and I imagine that it’ll soon be pretty apparent to even the most digital-shy technophobes.

As an addendum, I found this. It pretty much proves my point.

E-confusion

I find it quite surprising the number of people who still get their E-terminologies mixed up. I’m talking here about the difference between E-business, E-commerce and E-marketing. Three very different things.  

Yet despite this, I meet people every day of the week who either genuinely don’t know the difference, or pretend that they do, use it in an incorrect way whilst talking to me and then get exceedingly embarrassed when I correct them. The latter often irrates me, because I’m very much of the opinion that unless you understand what you’re saying, most of the time you shouldn’t be trying to say it… It’s like watching some politicians trying to seem intelligent. There’s no shame in not understanding an increasingly complex area, which is why specialist agencies, consultants and companies successfully exist, actively helping to place businesses and the commerical world in general into cyberspace. That in itself is a seperate issue, so to return to the basis of my rant; to define some of the big “E’s” of the internet world:

E-commerce
Generally seen by most to be the term related to selling a product or service online. This includes online banking and online shopping – although some view the term to encompass online transactions; eg. user’s responses to an online equiry (or a search) that results in either an online or offline sale. E-commerce does NOT include any aspect of online marketing or administration/usabilty processes.

E-business
Exactly like the dictionary definition of “Business”, except in an online sense. The term encompasses all aspects of business processes, from purchasing stock to producing a service. It covers a vast range of business fundamentals: sales, marketing, distibution, logistics, customer service etc. E-business defines the entire platform needed to run a business online and uses E-commerce and E-marketing within it’s structure.

E-marketing
This is at the very heart of any successful E-business. It is about being closer to the user and understanding them, as well as understanding how a product or service sits within the marketplace and the best means to successfully sell online. As a whole, E-marketing can easily add value to a company by boosting sales and widening distribution channels. It is constantly evolving, as technology advances and user-trends shift; profitable online companies or agencies recognise this and quickly adapt their strategies to meet these challenges.

Great, hopefully no more confusion. (Except possibly from people who aren’t reading this blog).