Germany's Old Economy Ready to Join the Web

HAMBURG, Germany — The Internet is well on its way to conquering Germany's “old economy” now that the first shakeout of dot-com start-ups has run its course.

“What's happening,” said Andreas Lehr, co-founder of Lehr & Brose, one of Germany's first online agencies and a Pan-European specialist in dialog marketing, “is that brick and mortars are undergoing competitive and information pressures.”

They are meeting these pressures, Lehr said, by investing more and more in measures to lower costs and increase customer loyalty and are doing so on the Web, largely because of its rapid and strong development.

He cited the newsmagazine Der Spiegel, which reported in a recent issue that the number of Germans online has risen from 10 million to 20 million in just one year.

(Numbers in Germany are suspect, as they are in most regions. The newspaper Die Welt put the number of Germans online at just over 10 million in mid-July.)

More important than the numbers, Lehr said, was the Internet’s impact on all aspects of German life.

The shift in attitude is clearest among agency clients.

“A few years ago, a company's mere presence on the Web was deemed enough,” he said. “Today, more and more businesses realized that the Internet is more than just having your own URL.

“Design has achieved high standards, and other factors are increasingly being taken into account — for example, functionality and customer ability to administer their own sites.”

That is offset, Lehr said, by continued client need for permanent customer care for all interactive endeavors, despite today's far more sophisticated grasp of the Web. This attitude is largely a factor of the speed of change on the Internet markets.

Agency customers come from across the economic spectrum, Lehr said, with greatest emphasis on financial services, telecommunication, automotive, publishing, nonprofits and Internet start-ups.

Lehr sees Germany well positioned in the Internet technology race, though he conceded that the country has some catching up to do before it reaches parity with the US. But he pointed to a number of German innovations, such as the MP3 music format developed at the Fraunhofer Institute.

The latest wireless technology will be available in Germany by the end of the year, promising modem quality without cable. But the technology will not affect the work being done by German interactive agencies, he said.

Everybody talks about wireless application protocol, and almost all new cellular phones are capable of offering it. However, WAP services are not used much in Germany because neither the phones nor the service is good enough to give consumers any real advantage. Lehr expects that to change.

But more important than these technological changes, Lehr said, is greater flexibility in the Web's content and function, perhaps through content management systems, so that they can work across all media.

Competition among agencies, he said, is fierce, especially on the CRM market, which can be evaluated only by people with an exact and profound knowledge of local conditions.

Finally, Lehr said he believed Europe was about to make up the US lead, especially now that the German government, among others, has recognized the Web's enormous market potential and is ready to offer economic incentives to speed Internet growth.

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