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Thursday, 10 February, 2000, 11:35 GMT
Rich+famous.com: More than word of mouse

Lifting yourself above the noise Press ads and site personality help


The internet is a crowded place. And for young start-ups, it's a difficult crowd to stand out from.

The annual cost of running and pushing a young web firm has risen fourfold in the last year, according to figures from the research unit of Initiative Europe.

The average new commercial UK site backed by a venture capitalist now spends 4.1m as it gets online and tries to establish a well-known, successful and trusted brand.


Top ten audited UK sites
Yahoo
BBC News Online
BBC (General)
Sports.Com
iii
Line One
Virgin Net
PA Sporting Life
PA News Centre
Dotmusic
(Source: ABC Electronic. Audits by monthly page impressions)
The industry rule-of-thumb has been to spend 50-70% of a dotcom budget on marketing - but many are now spending even more.

Candice Hodgson, head of marketing at Interactive Investor International (iii), said marketing was crucial.

"It's increasingly important to differentiate yourself as the market becomes more crowded, and as more and more people come onto the internet," she said.

"You have to invest in your marketing... and communicate your message in a way that keeps people enticed and excited."

The iii business is spending 33m on adverts and brand awareness when it rolls out in France and Germany - three times its spend on the technical side.

And its strategy would appear to be successful - the business is expected to be valued at between 196m and 245m when it floats on Nasdaq and in London later this month.

'Is it hot in here or is it just you?'

The biggest way to raise yourself above the noise is by advertising.

The industry spent 50m online and 7bn on TV, press, radio and other "offline" advertising last year.


Marketing is becoming more niche
Caroline Sceats, an analyst at Fletcher Research, says offline advertising is extremely effective - because it is familiar to the consumer and appeals to those who were just getting, or thinking about getting, connected.

She picks out Freeserve, AOL and Egg as companies doing particularly well from highly visible TV and national print campaigns in recent months.

Tom Jessiman of Sports.Com - which launched in the UK in July and was registering 31m page impressions a month by October - says marketing, including adverts on Virgin Radio, has been critical to the business.

"Chris Evans gives us a lift every morning," he says.

His site had since achieved audited page impressions twice the size of the unaudited traffic of its nearest competitor, he says.


Online ad split in 1999
Total: 50m
Portals and search sites 26% (esp Yahoo, Excite and UK Plus)
22% news and reference sites
23% entertainment sites
10% financial service sites
7% computing sites
source: Fletcher research

Of course, as advertising proliferates, the adverts themselves must become more clever, or more targeted, to gain attention.

DoBeDo, a Swedish company which recently launched its virtual cafe aimed at teenagers and 20-somethings in the UK, steered clear of the mass market with its offline advertising.

Instead, it spent 2m cultivating an "underground" feel with cryptic flyposters, showing young people with a mask over their face and slogans such as: "I've lost my virginity. Can I have yours?"

Within about five months it was claiming 100,000 signed-up members from its target audience.

What you see...

Luckily, one of the keys to brand success comes fairly cheaply - your domain name.


jungle.com web page Jungle had a 7.5m marketing budget
Part of the success of Lastminute.Com - due to float at up to 700m, after being online for a mere 15 months - is often put down to its domain name.

It is international, and yet customers know exactly what they are getting. Such straightforward names also benefit from people "trying out" a URL to see if it works.

On the other hand, Amazon and Jungle are examples of successful URLs which bear no obvious relation to their product, but enable them to expand into different areas whenever they wish.

Have a heart

Many of the most successful sites are ones which are perceived by their users to have a personality, or at least provide a sense of community.


Lastminute founder Martha Lane Fox Martha Lane Fox: Lastminute has netted her millions
Even financial service sites such as iii try to make use of brands and mottoes to create a "heart".

But of course, clever marketing counts for nought if your content is not up to standard, or if your servers cannot cope with the demand you receive. Users can be unforgiving in a market where competitors are just a click away.

Tom Jessiman says many sites are hampered by being unable to build content "from the ground up" before they get to market.

He says his site had been lucky, with massive resources from its US parent company Sportsline funding the content.

Others may have to attract funds from business incubators and venture capitalists.

And that means impressing them with more than just a good idea for some adverts.

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See also:
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The $7.5m net address
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Cybersquatting part 2: Giving it a good name
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Cybersquatting: Get off my URL
03 Oct 99 |  The Economy
UK Net millionaires boom
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New chapter for online bookstores
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Britannica.crash.com

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