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What it's like being an Internet Marketer in Europe, in a market
2-4 years behind the acceptance level of the Internet in North
America? What opportunities and challenges should we be aware of
when using the Internet for our marketing?
Europeans are just now becoming aware of the Internet as a
business tool. There is still the early reticence that came with
Personal Computers in the early 1980's. I saw it then when I
helped launch Compaq in France, and had many French businesspeople
tell me to go back to America with this portable computer, that
they don't work like Americans and would not consider using a
computer in their work. It is the same reaction now when one
mentions the Internet, which many non-English Europeans consider
"all in English", hence uninteresting.
There are only some 13 million Europeans on the Internet (compared
to some 25 million Americans), according to a recent Dataquest
study. Half of these are in the U.K., Ireland and Scandinavia.
Actually Scandinavia has a higher density of wired population than
the U.S., especially Finland. There is most definitely a market
in Europe to sell to.
Just to get a perspective on what the European market is, in
figures. The Europe Union's population is 286 million, and
Eastern Europe is another 269 million. Together, that's half of
China, with a purchasing power per capita often greater than in the
U.S. Which languages are understood in Europe, to use in Web sites?
Hold on to your seat: Russian is the most widely understood: 35%.
English is next with 28%, German 20% and French 17%. (Figures
from "The European", 4 July, 1996, p. 7). But those of the
offline populations; what about the *online* populations? Where
should one start to localize one's Web site to attract all those
72% of the total 555 million people who do *not* understand English?
It is extremely difficult to get figures about online populations
in non-English languages, but clearly we are going towards a world
in the year 2000, I have read this week, when the U.S. will
represent only 20% of the entire online population worldwide. So
we had better get prepared for the Internet as it transforms from
a principally North American phenomenon into a truly world media.
This being said, these are the best figures that I can come up
with at the present, after talking with top Internet marketing
people in each country around Europe:
email Web Comments or date of stat
England 3 to 6 M 1 M (2/96)
French 0.7 M 0.25 M (7/96)
German 2.5 M 0.5 M to which one much
add many German-speakers in
S. America
Dutch 0.6 M 0.1 M
Scandinavia 4 M 1 M (of which Sweden represents
400 K and Finland 500 K) (2/96)
Spain/Port. 0.3 M (to which should be added around
1 million Spanish speakers in
the Americas
Italian 0.3 M 0.2 M (7/96) - to which one much
add many Italian-speakers in
S. America
_____________________________________________
Europe 13 M* 4-5 M
USA 29 M** 11 M** (6/96)
World 45 M 24 M (1/96) - figure from
Netscape press conf. 1/96
* Dataquest-Europe (London, quoted in "European" bus. section
Feb. 26, art. on email)
** Nielsen survey
The "email" column means simply that this is the number of people
who are online in that country; they can communicate by email.
These figures give pause for thought, don't they? There's a huge
market outside of N. America, and communicating with them costs
the same as communicating in a local market, through email. To
get an idea about exactly what is on the Internet in Europe, turn
your Web browser to the European Business Centre, at
http://www.euromktg.com/euromktg/eurobus.html
---- ----- ---- ---- ---- ---- ----
--How Europeans see "the Web as a marketing and business tool"--
First of all, the Web is slow after 8 am and interminably slow
after the East Coast wakes up (2-3 pm here). It isn't a matter
of not having a fast modem (or ISDN), or of the U.S. sites being
saturated: it's the trans-Atlantic cable being saturated. There
are several 2 MBps lines between Europe and the U.S., and if you
are in North America and have compared morning and evening when
you try European sites, you'll notice the same thing. It's a lot
easier for Americans to work European sites when it is evening in
North America. It is hard to know if and when this situation
will get better, as there is no mention of new trans-Atlantic
cables in the press. The only solution for any self-respecting
Web master is to have a mirror site in Europe. Server space
costs more in Europe than in the U.S. (some $5-10 per MB for
small sites), as data traffic costs more too. But if
non-Europeans want Europeans to look at their sites, they will
really need a European mirror site. (Feel free to ask me for
ideas of who I'd recommend.)
Then there is the matter of the cost for Europeans to access the
Internet. Most Americans do not realize that a local call in
Europe costs $2.50-4.00 per hour during business hours
($1.00-1.50 per hour at night), and this hampers many
individuals in getting an Internet connection (which is about the
same price as in the U.S.).
The next hurdle in doing business in a fragmented market such as
Europe is the product delivery mechanism. UPS and FedEx are out of
the question to send to another country in Europe, as they might even
cost 30-50% of product cost.
Payment mechanism is another issue. Cybercash and First Virtual
are fine for American corporations, but not available for European
companies. GC Tech is launching a service this summer similar to
Cybercash (with more detail in the audit trail), and they are
French. (www.gctec.com and www.gctech.fr)
Internet marketing in Europe? Most companies leave this up to the
company who designs their Web site, but as the North American
experience shows, these are two distinct businesses. Try looking
for Internet marketing in European countries in Yahoo or other
search engines. Not much (pretty blank, in fact): one nearly gets
the impression that Europeans consider making a Web site to be
Internet marketing. Whereas the real work of an Internet marketer
is to make a site extremely visible and profitable in its own
right. Which is why my company has decided to go in the direction
of Internet marketing, catering to the European marketplace.
And what about selling to one's local market (geographically)?
This is starting to represent a nice chunck of the U.S. online
market, but outside of London, there is nowhere in Europe where
there is much of a market in the same city. The online population
in France is about the same as that of the Bay Area.
Food for thought.
So who is using the Internet for marketing in Europe? Large
companies. Entrepreneurship is just now starting to be regarded
in a positive light in Europe, but there is much less venture
capital here than in North America. The image of the Internet is
that it is expensive to use for marketing purposes, as most
Internet services companies multiply N. American prices by
3 to 5. This keeps small and medium companies away too. But at
the same time the local press is doing a wonderful job of keeping
the Internet under everyone's noses, even during this vacation
season, so that we should really experience an online explosion
in Europe this fall. I would guess that the online population
will grow by 40-50% in the last two quarters of this year.
"Inc." Magazine did a study of European countries, to see where
they sold. Most all countries address their home markets, and do
not export that much (Germany being the exception, as the leading
export country in the world). One could say that a U.S. company
generally "puts off" international market development until late
in its growth (usually around the $50-100 M stage), whereas there
are some wonderful opportunities for $3-5 M companies, if they
would just take the trouble.
Taking the trouble to address the international market is
precisely what we help our clients do. And language is the key.
You can really get people's attention to put yourself in a
position to sell to them when you approach them in their own
language. This doesn't mean *you* have to speak all those
languages. Your Web site can do it for you. And once they're
"hooked", usually there will be someone in their company who
speaks English to follow through with for the order.
Yes, European marketing is definitely worth consideration. Despite
its difficulties, when properly addressed, Europe can represent
the same turnover as North America (and usually better margins
than N. America).
Bill Dunlap 10 July, 1996
Managing Director
Euro-Marketing Associates
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Last revised on 21 March 1997
URL: http://www.euromktg.com/eng/ed/rep-eur1.html