Internet is not the quick share profit solution

Many observers have been noting the effect of Internet initiatives on a company’s share price. Dixons’ stunning and deserved success with Freeserve is the most quoted example.

It’s a great story, and testimony to the speed with which the Internet is being accepted. Yet this is not an excuse to rush at Net initiatives purely in an attempt to massage a rocky share price. Some are actively talking this up as a route.

Why not? you might ask. Isn’t shareholder value what this is all about? But shareholder value only comes from the long-term consistent delivery of customer value at a profitable rate of return.

The Internet is not a short-term investment, although it is very fast moving. The winners in the digital arena will be those who think through their strategy with care, and then deliver a compelling user experience which attracts customers again and again.

These will also be the companies which understand how the Internet can change whole business models through the considered and creative application of design and technology to interactions between all kinds of stakeholders – staff; customers; partners; suppliers; distribution channels; and, yes, shareholders too.

A useful way to escape this mindset is to consider funding the Internet, not out of marketing and investor relations budgets, but to see it for what it is – a capital investment. If you are setting up an online retail service you are opening a new shop. You wouldn’t consider developing a shop from an annual marketing budget, so why imagine you can online? If it was a capital investment, then it really would add value to the company and hence the share price.

Quick wins, of the kind some people seem to think exist on the Net, are by their digital nature eminently open to being copied. That, plus the sheer speed to market of the digital era, make competitive advantage on the Web very hard to sustain.

It is quite probable that in the future only three things will really mark out an organisation – constant innovation, its core culture, and its network of relationships. How these will be experienced by the end user is the key problem to solve, not how to boost the company’s share price. If a company gets the user experience right, the rest will follow.

Latest from Marketing Week

NOT REGISTERED? IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now

THE BEST CONTENT

Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3711 or email subscriptions@marketingweek.com

If you are looking for our Jobs site, please click here