Net has yet to prove its value

New research reveals that European businesses are still unsure about what the function of the Internet is. An integrated communications strategy is what is needed, argues John Shannon. John Shannon is president of Grey International

As the stampede to set up Websites continues, those companies without a clear long-term new media strategy are looking increasingly rudderless as they search for ways to capitalise on their investment.

A recent survey by Gallup and The Wall Street Journal of 603 board-level executives in France, Germany and the UK has revealed that Europe’s businesses continue to embrace the Internet on the somewhat vague grounds that it is in the interests of their “competitiveness”. Yet they remain unsure about how, specifically, to use the medium for generating profits in the longer term. As a result, many say they will not be injecting additional resources into their existing Internet programmes.

Broadly, the survey found that those who have taken up Internet technology are using it primarily for information gathering. Its secondary role is that of customer communication – but, worryingly, few companies are doing business with their customers using the Internet. Instead, the medium is being used as little more than an expensive way to enhance corporate image.

With Websites apparently generating so little financial return, one might be tempted to wonder why so many companies spent so freely to establish them in the first place. In answer, The Wall Street Journal quotes De Vere Hotels chief executive Paul Dermody: “Right now, the rush to get on the Internet is totally competition driven.”

In other words, the Website bandwagon is driven as much by fear of being left behind as by genuine recognition of the Internet’s potential as a tool for commerce.

Against such a background it is not surprising that managements increasingly regard Websites as luxuries, good for satisfying the corporate ego but little else. This is the reason they are increasingly reluctant to allocate further time and money to Website development when they believe resources can be used more profitably in other, more traditional, ways.

The notable exception to this growing sense of disillusionment has been the financial services sector. Here, according to Gallup, many businesses have been quick to spot the opportunities for using the Internet to do business. As a result, financial services companies tend to be the most satisfied with their Internet investment.

In other sectors, initial investment in technology and design has failed to produce the instant returns so many had expected. Many of Europe’s companies are asking themselves where their Internet future lies. Some, it seems, have already decided to freeze resources. But for those whose faith remains un-shaken by their experience so far, the generation of profits using the Internet will be achieved only when projects are developed and integrated within the context of a broader communications strategy for business growth or for direct selling purposes.

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