Procurement specialists set for advertising battle

David Bicknell

Not satisfied with having created demand for marketplaces from every sector from financial services to aircraft parts, from steel...

David Bicknell

Not satisfied with having created demand for marketplaces from every sector from financial services to aircraft parts, from steel to paper, a string of procurement specialists are preparing to gear up for an advertising campaign next month.

According to US reports, the triumvirate of IBM, i2 and Ariba, which is now competing directly with Oracle and SAP/Commerce One, is planning an advertising campaign worth $90m (£60m) to define a market leadership position in the marketplace arena.

IBM says the alliance now has more than 200 electronic marketplaces up-and-running worldwide, and is targeting what it calls "C-level executives" - chief executives, chief financial officers, and the like.

Chances are if IBM-i2-Ariba is going to launch such as campaign, Oracle and SAP/Commerce One are soon to follow. At least there is one consolation: the IBM ads are only expected to be in print media, and not TV, because they take too long to make.

The serious point here is that although 800 marketplaces have been set up this year, possibly handling some $3,000bn in sales by 2004, and generating $3bn-$4bn in revenue for the infrastructure providers, so far none of these marketplaces is really being used in anger.

There have been a few claims for cost savings, but most of them are so new that the mechanics of how they will operate have yet to be tested. The only concrete things that have come out so far are that they tend to have implementation timescales of about six months, and that a number of antitrust worries have been raised.

So far, the big players in some sectors, such as GE and Wal-Mart, have been able to shun working with competitors, rightly saying that as they are close enough to their customers, why should they let anyone else get in the way.

Instead, GE this week set up a B2B marketplace for 100,000 of its partners who need to get online to do business with GE, with GE providing the hosting.

Apparently, the later ads in the campaign will include "real world vignettes" of companies which are already using the alliance to operate their e-commerce activities. Since the alliance only originated in March, it's probably going to be a race against time between getting the marketplaces delivering real benefits and the ads going to print.

The reality is that if you are reading this because of an interest in e-business, you won't need to see the ads to know whether joining a marketplace is right for your business. You'll already have considered what your business model is, who your customers are, and then considered what your e-business strategy should be.

Advertising? For marketplaces? For the savvy company, I think not!

One of the more interesting link-ups over the next few months is going to be the partnership between digital consultancy Viant and former Netscape technology guru Marc Andreessen's LoudCloud.

LoudCloud will provide much of the infrastructure services for Viant-built sites including hosting, maintaining, monitoring and scaling of digital businesses.

The reason for this link-up? Viant has found that a number of the users for whom it has built sites still need their hands holding for the early life of those online businesses. From the early days of site development, companies like Viant have encouraged users to create heads of content and community for their online efforts - sound advice that was promptly ignored.

You can bet, however, that the idea of "digital growth services" is unlikely to remain Viant's property for too long. Get ready for a string of "me too" claims.

Read more on E-commerce technology