It’s budget season, a time when visions of sugarplums dance in the minds of every manager in cyberspace. It’s a time of wants, needs and fantasies, when nice-to-haves become need-to-haves, and when you can have as many people and as many toys as you want — until reality strikes and the bean counters insist on 19 plan revisions.
To give you hope and a view above the department level, here are some of the main issues that are keeping planners at many agencies up at night.
If you haven’t noticed, there is a shortage of technical talent at all levels. Companies at every level and in every market are beating the bushes for talent. From coders to software developers and from information architects to chief information officers, these guys are scarce, know their market value and often respond to stimuli that marketers and managers rarely get.
The game will go to those that can retain their best tech layers and recruit new ones. Even well-known firms are jockeying for position to line up allies. Every small tech house has 10 suitors. And these guys are becoming picky about the kind of work they want to do and the conditions or timing under which they will do it. As you might imagine, prima donna techies don’t really solve problems of speed and scale.
The pipeline to India, Israel and other offshore sources of talent is also clogged. Every firm in the space has its own immigration lawyer madly working either to bring techies over or farm work out. Bottom line: Budget for high-tech recruiting costs.
Tech turf turns.
The nature and use of technology on the Web are changing — so much so that the rules of thumb for designing and using sites and orchestrating technical components are radically changing. As users demand greater simplicity of use and ease of navigation, the complexity of design, the number of functional components and the need for systems integration grow exponentially. You will need higher-order technology integrated with more and different systems to make things simple.
We are way beyond “plain vanilla” Web sites. The technical needs look much more like systems integration than the HTML or Java coding most site developers are used to doing. A number of developments will shape the direction of this trend. Understanding these developments will shape the way you analyze and deploy your technology assets. Bottom line: Budget for middleware and people who understand it.
The battle shifts to middleware.
As sites become more complex and seek to better mirror reality, the need shifts from the graphically appealing presentation layer and the hardworking back end to the technology that links the two. As more off-the-shelf software gets used in basic site architecture, marrying the user interface to the heavy-lifting software becomes more of an art and less of a science. As a result, custom code for connections or easily customized middleware will determine what your site really can do.
The Web finesses legacy systems.
More big firms are using the Web to get around large-scale legacy systems and as a vehicle to aggregate information from different sources. Many firms are burdened with separate systems or data sources owned, operated and jealously guarded by separate business units. Many intranets and extranets extract information from discrete sources and display data on a neutral Internet platform in ways that facilitate analysis or sales.
Think about a mega corporation that can pull all the data together from across the globe on a simple page to get an immediate snapshot of business activity. Imagine an HMO that uses the Web to pull together information from doctors, hospitals, labs, insurance companies and vendors. By extracting data from many places and putting it together graphically on the Web, they net a macro picture of systemic productivity or a micro picture of your recent surgery — its timing, costs, performance, recovery rate, reimbursement and how it compares with others in your age or demographic cohort.
Application service providers change site architecture.
ASPs are changing the way we think about and design Web sites. Rather than licensing and integrating component applications into a single Web site, ASPs sell access to software on an a la carte basis. You sign up with them and link their applications to your site. Users then will travel from your site to theirs to make use of discrete functionality. The upside is lower costs for software and easier upgrades. The downside is that users must transit between sites, with the prospect of a disconnect or a signal loss, or the possibility that they could be snared away from you and your content while registering or filling their shopping cart on an ASP’s site.
There is also a movement to better synchronize component technology, navigational conventions and processing sequences across the Web. Led by Microsoft, it promises to level the technical playing field by making many more applications and programs into “plug-and-play” modules that site designers and developers can mix and match.
On the development side, this promises broader access to emerging software solutions at lower costs. It also implies the emergence of best-of-breed objects that can be widely shared across the Web to maximize site performance and interoperability. This, in theory, could fuel all kinds of joint ventures and bind together cooperating companies by deploying more seamless operating systems.
For consumers, imagine if most e-tail sites used similar global navigation conventions (e.g., tabs at top) or the same checkout sequence and the same credit card processing tool. In theory, the more things look and feel the same to consumers across sites, the better they will feel, with fewer anxieties and inhibitions to slow or impede the buying process. From a marketing perspective, there is no downside to making consumers feel more confident and more empowered online. The trick will be getting a broad consensus on how and by whom these “open systems” are built, and which component functionalities get the one-for-all treatment.
The Web wanders.
Prepare yourselves for the ubiquitous Web, a personalized tool that goes everywhere you do and facilitates communication, research and transactions along the way. Wireless connectivity will change the Web from a destination to a utility. Messaging will be highly customized, much of it cued by data resident in intelligent networks. And while screen sizes, protocols, bandwidth and software will take awhile to shake out, you will be astounded at how quickly new services get traction and how fiercely users of these new services rely on them.
Forget about delivering carefully timed advertisements to busy executives on the go. Focus on putting powerful, branded tools in the hands of opinion leaders and market makers. With acceptance of international technical standards and strong penetration of Global System for Mobile Communications devices, even in the United States, this will be a global play within a year. If people isolated in Finland are rallying to these new applications, will people in Fresno, CA, or Philadelphia be far behind?
Bottom line: Invest in understanding wireless technology and applications, or align yourself with somebody actually doing it.
Channel mix changes.
The bloom is off the Web as a stand-alone medium. And while some pure-play dot-coms will succeed, the majority of players will rationalize the role and their investment in Web technology in relationship to a multichannel strategy. The big question will be which channel (or which combination of channels at which expense levels) is best for acquisition, retention, usage stimulation, field communications, commerce, customer management, collaboration, bill payment, document access, publishing, wholesale automation, etc. The tougher guys will ask, “What does the Web do better, faster or cheaper than other media?” The answers will drive budget allocations. Yet the answers depend on the skills of marketers or trends in the marketplace.
For example, everyone has adopted HTML e-mail as the response vehicle of the moment. Relatively cheap to create and send, but harder to target well, HTML e-mail is returning double-digit click throughs in many categories. But savvy marketers know that like banner ads, as the novelty of e-mail marketing wears off, the response curves go south. If the e-mail glide path is anything like banners, this messaging tactic will go from first to worst in 18 months or less, despite experiments with rich media or XML.
Also consider marketing in a broader context where e-care, customer relationship management, live chat functionality and e-mail responders are in the mix. The Web is being integrated into overall messaging and communications strategies. This necessitates a channel-neutral contact strategy applied against segmented customer and prospect profiles. If you are not doing this kind of math, you are way behind the pack and probably are wasting more of your budget than you know.
Bottom line: Budget Web building and marketing expenses in the context of a larger multichannel strategy.
• Danny Flamberg is senior vice president, managing director at Digitas Inc., New York. His opinions are his alone. Reach him at [email protected]