Unilever launched its teenage website Wowgo in June with a fanfare and closed it last week with a brief and abrupt statement: “In the current market conditions, the company has been unable to raise further funding to continue deve lopment of Wowgo’s operations,” (MW November 16).
This week, Procter & Gamble’s teen site, Swizzle.co.uk, closed its chat rooms after coming under fire for failing to curtail sexually explicit conversations. The format of the site is under redevelopment.
The world’s biggest marketing corporations, Unilever and P&G, are finding out the hard way that success on the Web is even more difficult to achieve than success in their traditional packaged goods markets.
The City might have viewed Unilever and P&G’s investment in sites like Wowgo and Swizzle as harmless experimentation backed up by relatively low budgets. But investors’ patience is beginning to wear thin, as Wowgo found when it was unable to secure the further funding it needed “to continue as an independent entity”.
The difficulties Unilever and P&G are facing on the Web reflect both the companies’ struggle to connect with consumers in the 21st century and investors’ new realism about the value of the Internet.
The speed with which Unilever moved to close Wowgo calls into question just how serious the company is about its online strategy.
A Unilever spokesman says the online teen-girl market remains of great interest to Unilever, but he refused to divulge any other activities the company was exploring for that market.
P&G, too, has had its fingers burnt. After facing a barrage of consumer criticism that swizzle’s chat rooms and bulletin boards were too sexually explicit, it has been forced to close them.
A P&G spokeswoman says the company has terminated its contract with Internet portal Excite, which developed the site’s chat and bulletin components.
“After working with Excite on the development of swizzle.co.uk, the contract between P&G and Excite has come to an end. The community areas of the site were an area of expertise which Excite brought to the site during the launch phase. Because the ownership of the site will now rest predominantly with P&G, a decision was made to close the chat and bulletin boards,” explains the spokeswoman.
Internet chat rooms have also landed BSkyB and Freeserve-backed teen-girl portal Mykindaplace.com in hot water. The site faced condemnation from children’s charity NCH and Internet safety group Childnet International for an advertising campaign designed to attract male users to its chat rooms (MW November 16).
But, undaunted, Mykindplace founder and commercial & marketing director Charlie Redmayne says the company is in negotiations with Wowgo, possibly as a buyer.
Redmayne says the criticism of Mykindaplace as “irresponsible” is unjustified and points out that the chat rooms are constantly monitored: “We take the safety issues in chat rooms extremely seriously and understand they need to be carefully managed to maintain a fun and safe environment.”
Maintaining the “fun and safe” environment is where P&G was unable to hit the right note with its audience, according to Redmayne: “P&G didn’t want to be seen as the people who prevented teenagers talking about the things they wanted, but they didn’t want to be associ
ated with the types of discussions going through the site.”
Redmayne says: “People have to realise online businesses have to abide by the same principles as any off-line business.”
He believes Wowgo had three main problems: building an enormous site without technical back-up; building the business from a database when teenagers and parents are concerned about giving out personal information online; and raising the necessary finance.
In the online arena, the world’s biggest marketers are encountering the same kind of problems that beset unknown brands and small start-ups.
Internet brand consultancy Brandnet’s planning director and partner, Ed Hebblethwaite, says Unilever and P&G have strong standalone brands, but the relationship between consumers and the brands has been eroded by the retailer over the past 15 to 20 years.
“Consumers have a limited capacity for brand names. There is a proliferation of brands and consumers don’t know what they all stand for,” he says.
Hebblethwaite adds that because of the time it takes to establish a brand in the bricks-and-mortar market, consumers are confused if an online brand name differs from that used off-line. He cites Boots as an example. It has a very strong retail brand but its online presence manifests itself through the seemingly unrelated Handbag.com.
He says that while brands take time to establish themselves, websites launch and vanish from the Internet within months: “Consumers are not being given a rational reason to go to these sites. If you want to create a relationship with the consumer why not access someone who already has a relationship.”
He believes Unilever and P&G are taking the Internet seriously, but believes they need to team up with teen brands which have an established “lifestyle” relationship with the consumer, such as the EMAP magazine J-17.
William de Broe consumer product analyst David Hallam believes Unilever and P&G are using these sites as test beds, and thinks that the connection to transient Internet sites does not hurt the parent brand.
Hallam says: “Investors want to see companies doing these things, but I doubt if the City puts any real value on projects like this.”
The money invested in these projects tend to be small compared with the overall marketing budget: “The odd million here and there is not going to be missed,” he says.
But there is consensus among analysts that Unilever and P&G have been naive and that they need to either attach themselves to well-known teenage brands or give their newly-created sites time to develop.
The big marketing companies are finding it more and more difficult to reach their target teen audience through traditional advertising. But they are also discovering that taking pot-shots at consumers through the Internet is not a sure-fire way of hitting home.