The Internet makes equals of us all. It enables small and medium-sized enterprises (SMEs) to compete with multinational corporations and helps consumers to see products and services for what they are worth.
But to be a successful SME on the Internet, you have be noticed. This is no mean feat and certainly is not cheap. Recent research from Shop.org suggests that while established bricks-and-mortar firms spend £14 attracting a new customer, an online start-up, whether created by a bricks-and-mortar firm or not, must spend £68.
This is because the number of companies with an Internet presence is beginning to outnumber customers with Net access worldwide. The sheer size of the global online marketplace means you must spend big money to grab people's attention.
That is what the first wave of dotcoms had to do to make their mark. The high visibility of such brands as Boo.com would not have been achieved if it had behaved like other retailers. By spending vast sums the dotcoms became a newsworthy phenomenon. But they failed to extend their brands throughout their businesses.
Most SMEs understand that they need a recognisable brand online to help provide differentiation and to capitalise on first-mover advantage. However, they tend to choose a quick-fix brand solution rather than a more considered brand strategy early in the process, effectively doing too little too late, according to Richard Gold, head of new media at global branding consultancy Wolff Olins.
"Brands online are not the same as online brands," he says. "They need to work offline as well as online. It is not enough any more that a dotcom brand operates well simply on the Internet. The product or service needs to be able to exist across multiple platforms. There should be a fulfilment system in place that allows the brand to easily transpose to the high street."
Gold points out that most Internet brands differentiate themselves mainly by their advantages over older or slower ways of doing things. Few companies understand that you can use an online brand to create online communities of interest in your marketplace, strengthening your attraction to customers and so ostracising your competitors. This is particularly relevant, given that interactivity increases the possibility of creating communities.
Effective branding on the Internet is key because of the intangibility of the medium. In the absence of a physical product or service, a brand can help create an emotional relationship between the provider and customer. The speed at which most Web sites operate often means that culture and vision is lost. A brand can ensure that these factors are communicated to a global audience.
"The brand is the conduit through which communication with this disparate audience can be made," says Gold. "At present Web sites focus too much on technology. Branding in Web site design should be about more than logos and colours. It should be about behaviour."
SMEs should resist the temptation to try and create a cool dotcom brand and strive instead to create a good business model that can successfully deliver the promise of the brand. Such a model would consist of a big and simple break-through idea, able to be delivered in a compelling, visual fashion and supported by best-of-breed technology. A good example of a good - not cool - brand is Priceline.com.
Diane VandenBurg, marketing director of Multimap.com, a provider of Internet-based maps and one of the top 10 most visited sites in the UK with more than two million visitors a month, agrees that throwing money at branding online will not build a brand on its own. "Building an online brand is not about how much you spend, but how well you define and deliver the service and how effectively you communicate the proposition," she says. "You cannot brand an online business unless the business offers a real benefit for its audience and a demonstrable point of difference. In this respect, conventional marketing principles apply."
She adds, "Our difference is the simplicity and ubiquity of maps. They are delivered more efficiently via the Internet than any other medium. We have deliberately set out to ensure offline and online advertising and our public relations reflects this; we have used humour and warmth rather than gimmicks to convey our message. We have concentrated on a very tightly-defined audience of Internet users to make the most effective use of our marketing investment."
Wolff Olins believes that only 5% of dotcom brands fulfil the criteria at present. The company is advising a couple of start-ups that have delayed their launch because the three fundamental elements of a good business - technology, delivery and brand - are not in place.
VandenBurg warns that the biggest pitfall for most dotcoms is to promise more than they can deliver.
"Customer expectations of service business are justifiably very high," she says. "If marketing activity sets higher expectations than you can deliver, inevitably you will fail, particularly as few companies have been in the business long enough to build up the same levels of trust and confidence as leading real-world brands. We need to ensure that our customers think more positively of our site after they have visited it."
Clearly, the company that carries its promise - its brand value - right through its business will gain trust and emotional identification with consumers.
"Dotcom brands need to be end-to-end," says Josh Pert, business development manager with Nucleus, an e-consultancy on branding, whose clients include Cable & Wireless, Priority Telecom, VanPeterson.com and Superdrug. "The dotcoms must examine how they can support that which is now expected of them [low prices] with other value-added service features, such as customer service, delivery speed and one-to-one marketing."
For established offline brands, a minefield awaits as they go online - one that can, at first glance, appear to be paved with gold. Choosing a new name for your online presence made sense in the heady days of the dotcom revolution, when association with the old seemed to remove the shine from the new strategy. But in the cold light of the Internet shake-out, this does not look like such a hot idea.
"All of a sudden, being connected with a 'good old' brand looks very attractive as companies realise that the trust built up by physical operations - where lifespans can often be measured in decades or centuries rather than months - insures them against many of the whims of investors as well as consumer worries about security and reliability," says Pert.
If you have a good offline brand, however small your company is, it pays to use it for your online presence. Just make sure that your dotcom business is not driven by brand alone but by its ability to deliver on its promises. If you can do that then the brand will take care of itself.
Travelstore.com's tips for brand success
The keys to success for branding any business include having a solid, clear proposition and knowing and targeting your audience precisely. Online business travel expert Travelstore.com is at the stage where first-mover advantage has become first-mover competence, since it has refined its business model and has considerable operational experience.
Bill McFarlane, the company's president and chief executive, says, "The technology capability that the Web offers is at best a short-term competitive advantage - choice, cost and service is what it is all about. We have a mature and qualified management team with considerable experience in applying technology to complex processes in travel distribution," says McFarlane.
McFarlane attributes much of Travelstore.com's success to carrying the same brand throughout its clicks-and-mortar operations.
"We ran a highly targeted national advertising campaign this year, using the Travelstore.com goose as a symbol of the most frequent flyer, and communicating with business travellers in their own environment - in airports, at mainline railway stations and on taxis," he says. "This ensured that our brand values were maintained."
How to build an online brand
Source: Paul Stobart, chief operating officer, Sage Group
Urbia.co.uk keeps the family in focus
Urbia.co.uk is a pan-European family portal which went live in the UK in May 2000. Hugely successful in Germany where it was first launched, the site now also has a following in France. Urbia is aimed at families and provides everything from discussion forums to online clubs for people with shared interests.
"The most important thing for a dotcom is to keep its brand values uppermost in its mind and ensure that these are not lost in its marketing, advertising and PR campaigns," says Michael Stephanblome, managing director of Urbia.co.uk. "Too many dotcoms have fallen into the trap of creating strong brand awareness without truly communicating what it is they do. For example, Boo.com - we all know the name, but how many of us associate the brand with fashion? Too much money is ploughed into expensive 'clever' advertising which does nothing to communicate the real value of the brand.
"Urbia's approach has been to use advertising to create awareness and rely on PR to convert this awareness into real understanding. Our top priority in advertising - for example, in baby changing rooms - has always been to communicate our key message in clear and certain terms, which is that 'Urbia is family'. That way people can be in no doubt about what we do."
He adds, "Logos should not be extravagant or complicated but simple and easy to remember. Urbia's logo is two-dimensional and can easily be recognised whether replicated in colour or black and white. That is not to say there is no room for fun, innovative ideas in the dotcom world - far from it - but the idea of clarity and simplicity in branding must be carried through to your logo."