The Internet ... The Great Marketing Leveller. Get Online Make Profits or Lose Market Share Without Even Knowing It

Arthur Goldstuck published his "Online Retail In South Africa, 2004" report late in June and I bought it for the simple reason I wanted to get a completely independent view of the state of the Internet in South Africa.

In the report mention is made of the fact that some 8 companies totally dominate the online retail sales market albeit that this is tiny fraction of where it should be. These companies include well known retailers like Pick ' Pay, Woolworths, Netflorist, Kalahari.net and Streetcar.com. Other well known retail companies with internet presence and mentioned in the report include Makro, and McCarthy Call-A-Car.

After I read the report I went to Ananzi and did a few SA Web searches and I was not surprised by the results I found.

The Difference Between A Directory Search and A True Web Search

Ananzi has 3 ways of searching from its site ...

Search the South African Web ... this is the one that is most useful to a South African consumer looking to find a South African product or information and is the default search at Ananzi
Search the South African Directory
Search the International Web

In doing the searches referred to I used the SA Search option and not the SA Directory option. The results are very different depending upon mechanism used and terms searched for. Heres what was found ...

Woolworths was not number 1 in fact not even on page 1 or 2 for "ladies fashions" or even "Woolworths groceries" on Ananzi?
Pick 'n Pay was not able to be found on Ananzi for "low cost groceries". In fact they cannot be found for anything described as "low cost". Moreover they cannot even be found on the first 3 pages of Ananzi search results for "Pick 'N Pay" (if the directory search was used then Pick 'N Pay are first as would be expected but only for the term Pick 'N Pay)

I said to myself why can I not find Makro when I search for any of the following: "digital cameras", pool tables" or "cordless drills" yet these were the front page specials on their home page this week.

When I went to Ananzi and typed "Buy A Used Car" I expected to find McCarthy since they claim on-line success over many years. I could not find them either.
And for "Books, DVDs and CDs" I found Kalahari.net on page 3 of Ananzi's results ... very few people actually go as far as page 3 on any search engine.
Why is Netflorist NOT number 1 in fact not even on page 1, 2 or 3 of Ananzi when I search for "flowers special occasions"? Yet there is no doubt this is a leading online retailer who has done an excellent job and specialises in supplying flowers for special occasions.
Why could I not find Streetcar.com for "gift vouchers" on the first 3 pages of Ananzi? This company has a great product yet it is almost unknown in South Africa and still cannot be found on the most important South African search site for applicable and important and relevant key phrases.

The way the websites of the above companies have been designed has precluded them from being found on almost any search engine for the terms real people are typing into the search engines.

A fundamental instinctive trait of human nature and one that is particularly important to recognise to be even remotely successful in internet marketing is the "What's In It For Me?" approach.

Consumers looking for products to buy for example do not search for Woolworths or Pick 'N Pay or Makro .... they look for "low cost groceries", "ladies spring fashions", "clothing accessories", Sony DSCV1 digital cameras". "pool table special prices" etc.

It is therefore of no surprise to experienced internet marketers that Woolworths and Pick 'N Pay and Makro will never be found for these search terms when even the very basic requirements of website on-page design factors are taken into account. What is sad is that these companies have spent fortunes on websites and missed the important points those designed to attract customers.

Of course competitors of these companies or at least some know only too well the website design problems of these majors and use this weakness against them and take away market share. Truworths and Spar are far more accessible than any of the above sites.

The Internet Truly Is DIFFERENT ..... Company or Ego-centric Marketing Cannot Work on The Internet And Past Success Stands For Nothing

There is no doubt whatsoever that Woolworths, Pick 'N Pay and Makro are excellent companies. The obvious and ongoing high level of success in the real bricks and mortar world these above companies enjoy and have done for many years testify to this.

However on the Internet this kind of success is almost a disadvantage and it actually counts for almost nothing on the Web. Deep pockets are not a pre-requisite for Internet success. Real world business as distinct from Internet business has not prepared senior executives for the challenge offered by Internet marketing. The quicker Woolworths, Pick 'N Pay and Makro and so many other companies understand that searchers do not go and look for them by name the more successful they will become.

We have adopted a phrase found on the Internet to describe this syndrome .... "Radio WII-FM" .... or in other words all of us must listen to the "What's In It For Me" broadcast put out by all customers.

This means we have to research what people are really doing on the internet and then design the website based upon sound Internet marketing techniques. Our job as Internet marketers is to satisfy the immediate needs of searchers by being found before the competitors.

Web Designers and IT Departments Are Not Equipped To Lead Internet Strategies ... Web Design Is A Top Marketing and Strategic Responsibility

Arthur Goldstuck in his report interviewed very senior executives responsible for the online activities of the numerous leading online companies including those responsible for Pick 'N Pay, Woolworths and McCarthy. Each had very interesting extremely open and frank stories to tell .... yet not a single one referred to the critical importance of search engine results in any Internet marketing strategy ... be these organic search results or PPC (pay per click) search campaigns. I was staggered ... it was as though search engines did not exist in the minds of these Key Executives and their marketing strategies. Yet it is generally accepted that in excess of 50% of all website visitors arrive at a website by starting at a search engine.

Of the 200,000 monthly visitors to my own websites I know without a doubt that 50% come directly via a search engine (and I know exactly how many from each search engine every day) and a large chunk (unknown amount) of the other 50% found the websites indirectly via search engines. Without the search engine visitors my profits would be halved at least. My websites are first and foremost designed to appeal to search engines and then they are designed to appeal to the visitors that find the sites.

Succeeding On The Internet Is Not A High Cost Investment For Most And Is The Only Opportunity I am Aware Of To Make Massive ROI And Have Total Personal Control Every Day

The 200,000 monthly visitors to my websites of which I have quite a number cost me the princely sum of R4,500 per month including all Telkom charges, all hosting fees, all e-commerce fees, and domain fees. From these 200,000 monthly visitors a net profit in excess of R500,000 per year is made from the efforts of a single individual with no corporate backing or outside assistance . Me.I am not a web designer, I am not a computer programmer and know no HTML. It is not necessary ... although large parts of the market would prefer that individuals and business do no know this.

The reason for this article is to attempt to make this clear ... the internet is the greatest profit-making opportunity that has ever been available to individuals and business. All that is required is to embrace it intelligently and use the resources available at low or in many cases no cost.

For the very first time in business history ..... What you know counts more than who you know. The little guy can comfortably compete with large corporations in selected niche markets. These niche markets happen to be the most profitable, less capital intensive, least logistically difficult areas to compete in. In this way costs build up in tradional business while sales volumes and margins decline. This is not imagination ... this is happening but only because of the Internet being a great leveler. Even business stars like Richard Ackermann are out of their depth on the Internet.

The Tyranny of Website Hits

HITS is an Internet term that is meaningless to most of us yet bandied around with enthusiasm and pride unfortunately it has no bearing upon the success or otherwise of a website. Now talking about visitors and page views is a completely different matter.

Let me explain what a HIT is by providing an example of a web page with 10 pictures on it and 10 link images then every time this page is seen by a single visitor 21 HITS are recorded. A HIT refers to a file being downloaded to your browser and every image is a file. The page itself is also a file hence 21 HITS

Making The Internet Work For South Africa

Let me be up front ... I have a personal stake in wanting the internet to grow rapidly in our country and I will not see this happen so long as business continues to berate Telkom instead of getting on with the job of growing the Internet market here (as a proportion of total retail sales in South Africa only 0.14% is done online according to the Goldstuk report ... in the USA it was 1.9% in Q1 2004 compared to only 1.4% a year earlier). The blame for this cannot be all pushed onto Telkom.

The article is designed to remove the hype, mystery, plain untruths and bad mistakes made even by large companies in their efforts to make the Internet work ... ie make profits. By doing this I play a small role in sharing the knowledge I have learned from others who have been successful before me.

By far the easiest part of any internet marketing program is the actual website creation (with the exception of the e-commerce component) ... it can be done by anybody as I discovered about 4 years ago.

The point of these statements ... you do not need deep pockets, you do not need to spend vast sums on web site design or hosting and as much as Telkom have a lot to answer for in holding back the growth of user numbers they cannot be blamed for holding back business investment in the internet in South Africa.

In fact Telkom is too often used as an excuse to do nothing in my personal opinion. There is also no doubt that many other South African companies are hiding beneath the skirts of Telkom to make exorbitant profits from domain registration and hosting in particular. There is absolutely no reason why the vast majority of companies or individuals should pay more than R60 per month for world class website hosting and R60 per year for the registration of a domain name.

Anybody can go 24 hrs per day to a website called www.godaddy.com and register a .com website for $8.95 (R60). This company is superb in terms of service and of giving absolute control of the website domain to the purchaser ... unlike most registrars. In my opinion there is also no good reason for registering a .co.za but there are many disadvantages to having a .co.za domain name.

In fact the importance of the domain name is minor once the "Radio WII-FM" principle is understood.

In general the Executives interviewed by Arthur Goldstuck for his report believed the internet had an important role to play in the future economy of the country but they were also less than expansive in their growth predications.

For anyone with basic internet marketing skills a quick glance at each of the above companies' websites would reveal the reasons why these leaders were not able to be found for the actual terms people were using to locate products or services or just information. The reason will also apply to the future. Later in the article I will identify one fundamental error they are making ... it just so happens that the error is so simple yet so great an error that whoever designed the websites concerned will have a lot of explaining to do.

Because of the growing and widespread use of the internet and search engines in particular the ability for small business and individuals to make large amounts of money for tiny investments has been made possible. Traditional business is losing market share in virtually all fields to low key individuals adopting affiliate marketing strategies. Such strategies are few and far between in South Africa but they are available. In fact one of the latest from an UK company is really exciting and able to be accessed by virtually anybody with a website capability.

A large part of Netflorist's success is based upon its affiliate or partnership programs. You do not need to be a florist to sell flowers and make money online.

It is worth repeating such is the importance of this on the Internet ...... The absolute fundamental key to success relies on getting visitors to the website using a wide variety of systems and approaches including search engines, PPC campaigns, linking strategies, affiliate and JV strategies, offline promotion and so on. It is a fact that conversion rates to sale are low on the Internet making the need for large volumes of visitors essential. Without a doubt priority number 1 for any online business is getting visitors to at least find the website ... a potential purchase may follow but without the visitor no purchase is possible (it would have been taken by a competitor who has been found before you).

So How Can Woolworth's Website Be Dramatically Improved At No Cost and How A Search Engine Works?

My intention is not to "pick on" Woolworths. I think it is a superb company, a great shopping experience and a place I am happy to buy from. The reason I use this website is that it a significant player in the South African Internet arena, it has been online for a long time and has pioneered many good things in terms of online shopping and of course everyone knows Woolworths. In fact I hope they see the criticism as positive ... it certainly will help them enormously in their own Internet endeavors. The comments apply to very many websites and not just to Woolworths.

In this explanation of how a search engine works I will refer to Google which is by far and away the most resected search engine (by the way there are only 3 true search engines not 3000 that reference is often made to). The challenge every webmaster faces it to get the website found on page 1 of Google when a consumer searches for a related and relevant search ... eg "spring ladies fashions on sale". All search engines use a similar approach.

Google has in its database some 4 billion web pages (not websites ... Google searches for web pages not websites. This is important to understand). Google is continuously looking to update these pages and find new ones and add them to its database. When Google returns search results in response to an individual search term there are only 10 on the front page so the challenge any website owner faces is to discover as far as it is possible how Google determines which web page is best, second best and so on and then to try and match those requirements to the design of each web page. Outside of Google nobody knows exactly how the ranking process works but it is well known that the first thing any search engine looks at to make an initial judgment as to what the web page may be about is called the TITLE.

Most readers will not understand what is meant by TITLE since it is part of the HTML design and not exposed to the casual web surfer. It is nevertheless shown for every web page ... you will find it in the top left hand corner of any web page in white letters on a blue background in most cases. The website designer is in control of the TITLE but in general terms this designer does not understand the importance because he knows nothing about Internet marketing. As I said earlier the easy bit is website creation.

If you were now to go and type www.woolworths.co.za into any web browser the Woolworths website Home Page would come up. The TITLE would be seen as Woolworths. Click on any link on this Home Page to go to any other web page and you will see the TITLE does not change it stays as Woolworths. Every page on the Woolworth's site is called Woolworths. This is a disaster in Internet marketing terms.

In very simplified terms this has a profound and serious meaning and impact upon Woolworths ever being found on Google search engine for any term other than Woolworths .... Google will only ever consider any web page throughout the Woolworths website as talking about Woolworths itself. Google does not know and has no means of even guessing accurately that Woolworths are involved in ladies fashions, mens clothing, babies wear, groceries, fresh fruit salad or whatever.

To put it simply EVERY page of the site MUST have a different TITLE and this TITLE must relate to what that particular page is about. Otherwise the chances of being found for important real search queries on any search engine including Ananzi are virtually zero. Any website designer or webmaster who does not know this should be fired ... or at least sent for training urgently.

Now take a look at www.makroshop.co.za; there is a link to a web page about electrical small appliances ... you will find the web page TITLE for "electrical small appliances" web page is .... yes you've guessed it .... Makro.

Now go to Ananzi and search for "electrical small appliances". Be amazed because there are only 2 results and Makro is not one of them. If this page on the Makro website just had its TITLE changed to electrical small appliances it would be guaranteed to be at least on number 3 on page 1 of Ananzi for that search term. I also happen to know that almost 4,000 searches are carried out every year on Google for the term "electrical small appliances"

On Google about 148 searches a day are carried our for "spring fashions" ... Ananzi returns only 55 results. Woolworths in my opinion after 5 minutes work maximum could probably get found for spring fashions on page 1 on Ananzi ... instead of nowhere.

Of course there is a lot more to Internet marketing and being found on search engines than the TITLE but the point remains .... get the TITLE wrong and you are destined to be forever lost on the search engines for a particular search term that is not referred to by your TITLE.

Just in case people wonder I also did not know this when I started my own website work in 2002 and it took about 3 months of wasted effort before "this penny dropped"

A Market On The Internet Is Not What You Think It Is

Unless you participate in any market it is difficult to understand the size of that market and the intensity of competition within it. Sure research help to identify this but the research still needs to be interpreted using tools like experience and knowledge.

On the Internet to a large extent it is made easy to discover size and competition of any market. And the cost is miniscule and the time frame is hours not weeks or months... when you know how of course. Before discovering this information it is important to understand what a market is in Internet terms.

It is a bit difficult to explain this vital concept so bear with me ... in the real world you or I go into a green grocer's store and look at the offerings. We see green apples, red apples and Golden Delicious apples. We instinctively are given a choice and can see the red apples look better than the green ones but the Golden Delicious look best so we buy the Golden Delicious. The choices were available and to all intents a purposes this happened within a single market(place).

On the internet a market for red apples is COMPLETELY different from the one for green apples which is also COMPLETELY different from the Golden Delicious market. On the Internet to find what you want you have to be specific ... to stand a chance of finding what you want eg Golden Delicious Apples it is useless to search in the fruit (market) or even in green apples (market). The market for Golden Delicious is maybe buried somewhere in the clutter but if you rally want to participate in the Golden Delicious market then make sure your web page is about Golden Delicious to stand a chance of people visiting your website.

Internet searchers have learned that single word searches return junk most of the time. In fact the average number of words per search reported by Looksmart in 2003 was 2.4 words per search.

If you are a marketing company dealing in Golden Delicious apples then your website must be heavily geared to being found on the search engines for Golden Delicious and related terms .... eg large Golden Delicious, or boxes of Golden Delicious. For all intents and purposes these are different markets and the word market in this context can be replaced by a very common Internet marketing word referred to as KEYWORDS or KEYPHRASES.

This means any person can explore any Internet market in terms of size and competition extremely easily and quickly on the internet. All that person has to discover is how many people are searching the actual keyword or keyphrase and then take a look at how many competing websites there are. With the low cost tools available and some are even free this can be done in minutes and confirmed with extreme accuracy within about 48 hours. It is akin to a marketer living in paradise.

This approach to marketing is completely foreign to so many traditional companies and marketers ... hence the TITLE problem at Makro, Pick 'N Pay (to a slightly lesser extent but still a major problem) and Woolworths.

Coming back to Makro ... if they sell 10,000 different products then to realy get found on the Web they need many different web pages each one geared to a specific market or search term since people are looking for products at that level .... typing digital cameras even returns too great a choice so searchers have learned they have to look for specific items or concepts even model numbers. This has major implications for all retailers anywhere in the world. Let me give a very specific example using my own real personal experience ...

I know nothing about digital cameras but last year I decided to buy one. Initially I read a couple of magazine reviews on line which pointed to the Sony DSC V1 as being top of its class in the range I was interested in. Here's exactly what I did and this is being done in ever increasing numbers every day and yes even in South Africa but wait till it really catches on.

I searched Ananzi and found I could buy it in South Africa online for about $1,000 (more if I used a credit card, can you believe the cheek)

Then I searched www.shopping.com (if you have never seen this site do yourself a favour and discover what the Internet is all about and where there is a massive opportunity for a South African company with resource). In actual fact this search was done today because I could not remember exact numbers from last year but the point is just the same ... This site gives me a choice (all in a single place) to buy this camera from any one of 54 stores and the price ranges from $378.00 to $508.78

Having confirmed what the real price was I took a trip to Eastgate and spoke to a couple of stores and checked out the weight, feel and other features of the Sony DSC V1 and got verbal confirmation that this was a good camera.

Then I bought it from USA and saved myself about $500. This is staggering.

In the pre-Christmas sales period in 2003 in the USA online sales increased year on year by about 50% ... but what was really exciting (or scary ... depends where you sit) was that some 40% of all online purchases were first of all researched in a real shopping mall. The person then went home and bought considerably cheaper online.

Now this does not yet happen in South Africa except by people who understand what is available. But it will ... this year, next year I don't know. The South African retail industry is in for a major shake-up and margins will remain under extreme pressure ... this is why the better companies like Woolworths, Pick 'N Pay and others have made their forays into the Internet marketing arena. They know that business has changed for ever and their very future is to be challenged. They have and still are prepared to invest in order to learn and remain dominant.

But ... they need help that is for sure.

You Do Not Need Your Own Product To Make Large Profits Online

No I am not mad (not in the generally accepted sense of the word). This is a fact and exploited by tens of thousands of individuals and companies ... even by Pick 'N Pay, Makro and others individuals just like me. In fact you do not even need a website but that's another story.

This mechanism to make profit also depends very heavily upon getting traffic to your web site. Without the traffic you cannot make the money ... end of story. It is called affiliate marketing, joint venture marketing or other similar names. The essence is to create a link on a web site that once clicked goes to the actual web site where the sale is made.

Let me use an example from one of my websites. I have a JV partner in the USA and two general affiliate partners also in the US. My field of expertise is water gardening and pond keeping. Through the supply of lots of useful information on my websites pond keepers worldwide have come to trust my advice and when I make a recommendation about a particular piece of equipment or a company my advice is respected and taken up by a fairly large percentage of my websites' visitors. If a visitor then decides to buy something from any one of these 3 partners I get 15% of the sales value of the transaction paid monthly in US Dollars to my South African bank account.

This single mechanism alone will earn me this year US$15,000 (all done while I sleep). Just as a matter of interest and to further exemplify the affiliate opportunities and the fact that what I do can be done by anybody else, big or small, if they are prepared to just do it. Consider this . I know nothing about insurance but using my basic Internet marketing knowledge I now compete with all the big short term insurance companies in South Africa. In doing so I make an ROI exceeding 1,000% and my insurance site is on page 1 of Ananzi when you search for "insurance".

How is it possible that an individual like me can take market share away from the large insurance companies?

Well point 1 is they don't know I am taking market share away and if they did they have NO mechanism to prevent me. I have become another competitor with no infrastructure, no reps, no office, no paperwork, no stock .... in fact virtually no expenses.

Once again this is exciting or scary depending where you are sitting. Youll find the following point even more scary or exciting . Thousands of people like me have these skills already and are able to make split second decisions in which markets to compete in. A friend of mine is about to start competing with major credit card companies in South Africa on behalf of another UK company.

On this basis how can any commercial organisation ... even the very smallest complain at the cost of the wonderful once-in-a-lifetime prospect of joining the largest, fastest growing, most dynamic marketing opportunity ever experienced by the world. Why does South African commercial leadership not realise this and jump on board with enthusiasm and commitment?

To Sum It Up As I See It

Why does the South Africa media hardly ever comment on the Internet except when a virus appears or some guy in Cape Town has his credit card number stolen? Why is there such an enormous level of ignorance about the Internet in our country?

The simple answer is that companies, the media and individuals just do not know what what can be done and how very easy it is to do the work ... that Internet marketing opportunities are easily and quickly researched, that the best can be identified by those in the know and that it is low cost, simple in concept and practice. It just takes hard work and commitment. Oh. I almost forgot about R120 to get going.

No large (or small for that matter) company Key Executive can afford to ignore what is happening and delegate an awesome responsibility namely the future of the company to a web designer or a guy in the IT department.

The protection of market share, the increase in profitability and basic survival of any company is Real Business ... and needs attention from the very top.

Many companies' Key Executives may like to see themselves as business leaders and without doubt they are in their comfortable traditional fields.... as soon as they acknowledge that on the Internet they most certainly are not then the South African Internet sales values and volumes will take off. The Internet is a great leveller .... many highly competent traditional leaders are like fish out of water as far as the Internet is concerned. The traditional business approach does not work on the internet. All those years of experience count for little when faced with the brains, enthusiasm, drive and commitment of individuals "in the know" and blessed with real empowerment, like having access to a computer with an Internet connection.

Large retailers worldwide are losing market share without even knowing it to lots of individuals with no need for massive budgets.

How can I make these statements?

Some 5 years ago I started to teach myself about the internet after having a website designed for me by a young designer who still does occasional work for me. The website itself was well designed in terms of the standards at the time and certainly based upon my limited knowledge of the web was good.

However it did not work .....

1. I could not change it to keep up with the dynamics of my own requirements and also those of the internet itself. The internet changes by the minute not every year around budget time.

2. The designer did not work for me so was rarely available to do the changes that I wanted when I wanted and any changes were expensive to make. There had to be a better way was my thinking and of course there was and still is .....

3. Most importantly it did not bring me any customers

4. I started to understand that a website was the end point of a process not the beginning of my on-line Internet ambition.

5. I started to learn how to understand what an Internet market really is and then to discover how big and competitive it is? This approach was "discovered" from the teaching of others. I learned that the markets on the Internet are almost infinite in number and so is the competition in many of these. Equally I learned how to avoid real competition and pick the eyes out of large markets.

6. So yes I learned, made lots of mistakes and developed until success was achieved and then more and then even more success ... it is self perpetuating this Internet success.

I just wish I was 30 years younger ... if a 60 year old can do this then imagine what my 14 year old son is up to.

Pick 'N Pay, Makro, Woolworths look out .